Developers accuse Montgomery County of 'bureaucratic theft'

The Montgomery County Council is proposing to retroactively exempt numerous commercial developments from a special property levy their owners say was improperly charged and collected, costing them millions of dollars.

"In its worst light," Charles Nulsen, president of Washington Property Co., told the council, "it can be described as bureaucratic theft."

At issue is the add-on property tax paid by commercial landowners within the county's four so-called "parking lot districts" — Bethesda, Silver Spring, Wheaton and Montgomery Hills. The additional revenue collected within parking lot districts, or PLDs, finances the acquisition, construction, operation and maintenance of off-street parking facilities.

The parking lot district law is decades old, as is the provision that exempts developments with off-street parking structures from the special tax. But the law requires the owners proactively apply for the exemption by April 1.

And therein lies the problem. Developers — StonebridgeCarras, Washington Property Co., Home Properties and Southern Management Corp. among them — were shocked to learn they have been paying a tax from which they should have been exempt, they said through their land use attorneys.

Those landowners found out only by a "chance discovery" that they "were not receiving exemptions from PLD taxes that they were each legally entitled," C. Robert Dalrymple and Anne Mead, attorneys with Linowes and Blocher LLP, recently told the council in written testimony.

The lawyers referred to the situation as a "gross injustice," as "inequitable" and "egregious."

"Simply put, the PLD tax is embedded in the property tax imposed by the county in the tax bill without any fair, equitable, or reliable way to determine that the PLD tax is included or there is an opportunity for, and in fact a misplaced burden on, the PLD Property Owner to apply for the entitled tax exemption," the attorneys wrote.

Michael Neibauer covers economic development, chambers of commerce, transportation and politics.