"ESD to the MEP": Could Your Development Project be Exempt?

Date: September 28, 2010

Earlier this year, the Maryland Department of the Environment issued temporary emergency regulations authorizing local governments to grandfather approved stormwater management plans from the impact of the Stormwater Management Act of 2007 ("SWM 2007"), which required compliance with its provisions by May 4, 2010. On July 26, 2010, MDE made these temporary emergency regulations permanent.

SWM 2007 dramatically changes the way that stormwater management is provided within a development. Prior to the 2007 change, state and local codes allowed the use of large relatively centralized stormwater management ponds that ultimately drain over an extended period of time into a receiving watercourse, such as a stream ,to provide on-site stormwater management. The use of such large facilities came to be criticized on the basis that the discharge from such ponds created adverse environmental impacts that were not previously anticipated or appreciated.

Under SWM 2007, developers are required to provide environmental site design to the maximum extent practicable, "ESD to the MEP", in an effort to minimize the adverse impacts of the discharge from SWM ponds. Environmental Site Design, or ESD, means "using small-scale stormwater management practices, nonstructural techniques, and better site planning to mimic natural hydrologic runoff characteristics and minimize the impact of land development on water resources." Md. Environment ยง 4-201.1. The idea is that such small scale measures create fewer adverse impacts than centralized stormwater management practices and that implementing ESD to the MEP reduces need for and impact from centralized SWM. Once ESD is provided to the maximum extent practicable, other SWM management practices are allowed. This is a vast departure from the way stormwater management traditionally has been provided.

SWM 2007 required compliance by May 4, 2010 for all SWM plans approved after that date; however, the Act was virtually silent on the legal status of SWM plans approved before May 4, 2010, but not yet built. Considering the length of time it takes to process development plans and SWM plans, and in light of the economic recession that started in 2007, the resolution of this question would affect literally thousands of approved but not yet built SWM plans throughout Maryland. Requiring plans that had been approved but not yet built prior to May, 2010 to be redesigned and reapproved with ESD to the MEP would be a tremendous hardship on the developer and probably would put many projects in jeopardy of being shelved permanently. The temporary emergency regulations that became permanent in July addressed this issue.

Under COMAR, local governments may grant an "administrative waiver" for a development from the requirements of SWM 2007, provided certain criteria are met. Specifically, if a development received preliminary project approval prior to May 4, 2010, the project may be exempted from the requirements of SWM 2007 if it receives final project approval by May 4, 2013, and if all construction authorized by the administrative waiver is completed by May 4, 2017.

Under the regulations, preliminary project approval means, at a minimum, approval, as part of a process to review and approve proposed development, of the number of lots or units, project density, size and location of all proposed land uses, proposed drainage patterns, all points of discharge from the site, and the type, location, and size of all SWM measures based on site-specific computations. Typically, this might be referred to as development plan approval, or a similar term.

A developer with a preliminary project approval prior to May 4, 2010, may seek and receive an administrative waiver under the local stormwater management regulations from the requirements of SWM 2007. If granted, the waiver would permit the developer to seek final project approval, i.e., approval of final stormwater management and erosion and sediment control plans, based on the law in effect on May 4, 2009, one year before the effective date of SWM 2007. Final project approval must be obtained by May 4, 2013, and all construction must be completed by May 4, 2017. Certain projects, such as those subject to a Tax Increment Financing approval or an annexation agreement, may be extended past 2017.

Throughout Maryland, local jurisdictions have implemented administrative waivers as authorized by the COMAR provision. For example, Baltimore City and Baltimore County each have amended their county codes to allow the Baltimore City Department of Public Works and the Baltimore County Director of Environmental Protection and Resource Management, respectively, to issue administrative waivers on a case by case basis. On the other hand, Howard County has taken a more broad brush approach, statutorily providing the administrative waiver to all projects that would otherwise qualify under COMAR.

Interestingly, as provided in COMAR and as implemented by jurisdictions like Baltimore City and Baltimore County, the permissive and discretionary "may" is used in the context of the decision to grant the waiver. For example, under the Baltimore County regulation, "the Director may grant an administrative waiver, if the applicant received preliminary project approval before May 4, 2010." Baltimore City has a similar provision. Unfortunately, this puts a developer who for some reason is not granted an administrative waiver on weaker footing than if the nondiscretionary "shall" had been used. It also calls into question the factors the local government may use to deny a request for an administrative waiver. Nonetheless, in the 3 months since such waivers have been available under the temporary and now permanent regulations, this does not seem to have been a problem. By contrast, the across the board manner in which Howard County implemented the administrative waiver is very nondiscretionary.

Although, as we sit here in 2010, it seems that 2013 and 2017 are so far away, and that there is so much time to achieve final project approval and complete construction, we will undoubtedly see issues arise as these dates approach. It will be interesting to see if these dates are further extended.

For more information on ESD to the MEP and whether your project may qualify for an administrative waiver, contact any of the attorneys Whiteford, Taylor & Preston's Real Estate Development, Leasing and Land Use Industry Group.