Relating to Real Estate

In Costco Wholesale Corp. v. Montgomery County, No. 2450, Sept. Term, 2015, 2018 WL 1747920 (Md. Ct. Spec. App. April 11, 2018), the Court of Special Appeals affirmed the denial of a petition for a special exception for Costco Warehouse Corporation to construct a 16-pump gasoline station in the parking lot of Westfield Wheaton Mall because it would cause adverse health effects and would not be in harmony with the surrounding neighborhood. 

Westfield Wheaton Mall covers 75 acres and includes a Costco warehouse store.  Costco proposed to construct a gas station on a 36,800 square foot parcel adjacent to the store.  The nearest residence is 118 feet south of the site.  Kenmont Swim and Tennis Club is 375 feet to the northwest, and Stephen Knolls School for developmentally disabled children is 874 feet to the southeast. 

Costco filed its petition on November 13, 2012.  The technical staff of the Maryland-National Capital Park and Planning Commission recommended denying the petition on February 20, 2013.  On February 28, 2013, the Montgomery County Planning Board voted 3-2 to recommend denial of the special exception, but this was based on its determination that the proposed station would not comply with the area master plan.  Costco appealed to the Montgomery County Board of Appeals, which referred the case to a hearing examiner.  The hearing on the special exception lasted for 37 days over a 17-month period.  It produced 9,500 pages of hearing transcripts and led to a 262 page opinion by the Hearing Examiner, who recommended denial because of potential health impacts and “traffic congestion, parking congestion and additional physical activity.”  The Hearing Examiner found that Costco had not proven by a preponderance of the evidence that the application would satisfy all of the requirements to receive the special exception.

Costco filed a petition for judicial review in the Circuit Court, at which point Montgomery County intervened as a party in the proceedings.  The Circuit Court affirmed, and Costco appealed to the Court of Special Appeals.

The Court of Special Appeals observed that its role was to evaluate whether there was substantial evidence in the record, as a whole, to support the agency’s findings and conclusions.  The court noted that Costco, as the applicant, had the burden of proof to show that the proposed use satisfied all general and specific standards defined in the Zoning Ordinance.  Costco needed to establish that the use under the special exception would not produce a detriment to the public health and would be in harmony with the neighborhood.  Further, the court noted that even if Costco complied with all of the criteria stated in the Montgomery County Code, that would not be sufficient to require that a special exception be granted; the special exception may still be denied because the use may not be compatible with neighboring properties.  After review of the record, the court found that the Hearing Examiner’s study reflected the proper analysis and that both of these issues were “fairly debatable.”  Therefore the court affirmed the decision of the Montgomery County Board of Appeals because, as the court stated, it is not the function of an appellate court to second-guess the fact finder and perform an independent de novo review of the record. 

For questions, please contact Ed Levin (410) 576-1900.