Capital Commercial Properties, Inc. v. Montgomery County Planning Board

⁹¹ RODOWSKY, Judge. These cross-appeals concern a preliminary plan approval in Montgomery County. CBS Associates Limited Partnership (CBS), one of the appellees, is the fee owner of the land comprising Stoneymill Square Shopping Center (Stoneymill). CBS seeks to enlarge the retail area of Stoneymill by erecting a freestanding building.

In pursuit of that purpose, CBS filed preliminary plan 1-02006 (the Plan) with appellee and cross-appellant, the Montgomery County Planning Board of the Maryland-National Capital Park and Planning Commission (the Board). The Plan proposes creating a new lot by combining the whole of one, and part of another, existing lot. Capital Commercial Properties, Inc. (CCP), the appellant and cross-appellee, is the ground lessee of part of Stoneymill. Fearing that the CBS project adversely will affect parking for its patrons, CCP opposes the project.

The Board approved the Plan, subject to conditions, and the Circuit Court for Montgomery County affirmed the Board in an action for judicial review. CCP appealed to this Court and presents the following issues for our review. “1. Whether the circuit court erred by holding that [the Board] properly exercised its authority when it failed to make the finding required by Section 50-29(c) of the subdivision regulations, that the lot width and depth of the subject property are adequate to accommodate the off-street parking requirements and minimum setbacks prescribed by the zoning ordinance. “II. Whether the decision of the [Board], affirmed by the circuit court, was supported by substantial evidence of record. “HI.

Whether the decision of [the Board], affirmed by the circuit court, violated, as a matter of law, appellantf’s] protected rights to property in which it holds a recorded 99-year leasehold interest. “IV. Whether the circuit court erred in holding that the record plat approval process is separate and distinct from the preliminary plan approval process. ⁹² “V. Whether the circuit court erred in admitting appel-lees’ supplementary exhibit at oral argument before the court.” In its cross-appeal, the Board raises these additional issues: “V. Whether the circuit court erred in limiting the purpose for admitting the ... Board’s and CBS’ supplementary exhibit. “VI. Whether the circuit court erred in admitting the ground lease between appellant and CBS as appellant’s supplementary exhibit.” Stoneymill, located in the Kensington-Wheaton Policy Area, is bounded on its southwestern side by Viers Mill Road, on its northeasterly side by Randolph Road, and on its north side by Colie Drive.

As shopping centers go, Stoneymill is old, having been built in the 1950s or 1960s. It contains 12.5 acres, including 123,000 square feet of retail uses. The proposed newly configured lot, Parcel P, consists of 5.5 acres. The new, freestanding building intended to be constructed thereon is planned to add 12,425 square feet of retail usage.

Parcel P is zoned C-l, as to 4.8 acres, and R-60, as to .7 acre. By a special exception, granted by the Board of Appeals in October 1961, 1.0246 acres of residentially zoned land along the south side of Colie Drive was permitted to be used for parking in conjunction with the shopping center. The setback requirements, if any, in effect at the time parking areas were laid out along Colie Drive, were not as restrictive as those currently in effect. In November 1960, CCP’s predecessor in interest entered into a ninety-nine year ground lease with CBS’s predecessor in interest of 325,281 square feet, or 7.467 acres, of Stoneymill.

The ground lease includes a former Ames Department store, adjacent to Parcel P, and all of Parcel L, which lies within Parcel P along the south side of Colie Drive. Under the lease, CCP claims parking and access rights, in common with others, in Parcel P. The Plan would use part of Parcel L in conjunction with parking. ⁹³ The Agency Record CCP contended before the Board that the Plan violated Montgomery County Code (1984), Chapter 50, “Subdivision of Land,” § 50-29(c). 1 Specifically, CCP asserted that the width and depth of Parcel P were inadequate to accommodate the off-street parking and minimum setback requirements mandated by the Zoning Ordinance. 2 Section 50-29(c) provides: “(c) Nonresidential lots. Depth and width of lots reserved or laid out for commercial and industrial purposes shall be adequate for the off-street service and parking requirements needed by the type of use and development proposed.” The minimum parking required for the enlarged center, at the ratio of five spaces for each 1,000 square feet of retail usage, would be 268 spaces. The Plan projected 293 spaces.

Before the Board, CCP presented evidence directed to showing that only 222 spaces could be achieved. The premise of CCP’s analysis was that the Plan would have to comply with setback requirements adopted in 1984, because the added retail space was a new, freestanding building and not an expansion of an existing building. Consequently, CCP submitted, the Plan principally would lose parking spaces along Colie Drive, due to the twenty-five foot setback that is currently required because the land on the north side of Colie Drive, a seventy-five foot right-of-way, is zoned R-60. CCP argued that § 50-29(c) obligated the Board to apply the current setbacks in its consideration of the Plan.

Accordingly, CCP concluded, the depth and width of the lot laid out was not adequate for off-street parking, and the Plan should be rejected. Anticipating CCP’s position, counsel for the Board, on the record at the hearing, advised the Board that the issue of parking spaces was for the Department of Permitting Services ⁹⁴ (DPS) to decide when considering the parking facilities plan (PFP) — advice that the Board accepted. In a written opinion approving the Plan, with conditions, the Board found that “the depth and width of the proposed lot are adequate for the off-street service and parking needed for the proposed use[.]” Among the conditions to which the approval was subject was the following: “Prior to issuance of building permit, [CBS] to comply with the provisions under Article 59-E of the Montgomery County Zoning Ordinance and submit a parking facilities plan to DPS for review and approval.” (Emphasis added). In view of this condition, the Board concluded that the parking requirements of § 50-29(c) were satisfied.

CCP also pointed out to the Board that, under the ground lease, CCP had possession of Parcel L for another sixty-six years. The lessee questioned how, without its consent, CBS could include Parcel L in proposed Parcel P. The Board, however, held that its decision must be based on ownership. Circuit Court Judicial Review In the Circuit Court for Montgomery County, CCP’s memorandum of law in support of its petition for judicial review raised only the following two issues: “I. Whether the Planning Board’s refusal to review the parking plan submitted with the preliminary plan was erroneous as a matter of law, in violation of the requirements of Section 50-29(c) for adequate lot width and depth to accommodate required parking and minimum setbacks prescribed by the zoning ordinance. “II. Whether the Planning Board, when approving a Preliminary Plan subject to conditions, must find that the plan as amended by the Board’s conditions must comply with all requirements of the Subdivision Regulations and applicable provisions of the Zoning Ordinance, including requirements for recordation, pursuant to the holding in Lee v. Maryland-National Capital Park and Planning Commission.” ⁹⁵ Attached to this memorandum were exhibits that the Board moved be stricken from the record because they were not before the Board when it made its decision.

The exhibits were two leases between the predecessors in interest of OOP and CBS and a preliminary plan drawing. The Board’s motion to strike was denied. When the Board and CBS filed their answering memoranda, they attached exhibits, including the PFP for the project. Over CCP’s objection, the court admitted the PFP for the limited purpose of showing the date of its approval by DPS.

Standard Of Review Our review of the decision of an administrative agency is limited. “When reviewing a decision of an administrative agency, this Court’s role is ‘precisely the same as that of the circuit court.’ ‘Judicial review of administrative agency action is narrow. The court’s task on review is not to “substitute its judgment for the expertise of those persons who constitute the administrative agency.” ’ ” “Rather, ‘[t]o the extent the issues on appeal turn on the correctness of an agency’s findings of fact, such findings must be reviewed under the substantial evidence test.’ The reviewing court’s task is to determine ‘whether there was substantial evidence before the administrative agency on the record as a whole to support its conclusions.’ The court cannot substitute its judgment for that of the agency, but instead must exercise a ‘restrained and disciplined judicial judgment so as not to interfere with the agency’s factual conclusions.’ ” Stover v. Prince George’s County, 132 Md.App. 373, 380-81 , 752 A.2d 686, 690 (2000) (citations omitted). In this case, in contrast to factual challenges, the principal issue is the construction of § 50-29 as it applies to the basically undisputed facts of the instant matter. Under these circumstances ⁹⁶ “the substituted judgment standard is used with respect to a claim that the agency erred as a matter of law.

A challenge as to a regulatory interpretation is, of course, a legal issue. Upon appellate review, however, courts give special weight to an agency’s interpretation of its own regulations. As this Court explained: “ ‘[Cjourts bestow special favor on an agency’s interpretation of its own regulation. Recognizing an agency’s superior ability to understand its own rules and regulations, a “court should not substitute its judgment for the expertise of those persons who constitute the administrative agency from which the appeal is taken.” ’ ” Department of Health & Mental Hygiene v. Riverview Nursing Centre, Inc., 104 Md.App. 593, 602-03 , 657 A.2d 372, 376-77 , c ert. denied, 340 Md. 215 , 665 A.2d 1058 (1995) (citations and attribution omitted).

Judge Eldridge, writing for the Court of Appeals in Board of Physician Quality Assurance v. Banks, 354 Md. 59 , 729 A.2d 376 (1999), expressed the concept in the following fashion: “Even with regard to some legal issues, a degree of deference should often be accorded the position of the administrative agency. Thus, an administrative agency’s interpretation and application of the statute which the agency administers should ordinarily be given considerable weight by reviewing courts.” Id. at 69 , 729 A.2d at 381 . The Board also asserts that certain of CCP’s issues in this Court are not preserved for our review because they were not raised before the administrative agency. Under settled Maryland law, appellate review of administrative decisions is limited to those issues and concerns raised before the administrative agency.

Mayor & City Council of Rockville v. Woodmont Country Club, 348 Md. 572 , 582 n. 3, 705 A.2d 301 , 305 n. 3 (1998). As the Court of Appeals has explained: “ ‘A reviewing court usurps the agency’s function when it sets aside the administrative determination upon a ground ⁹⁷ not theretofore presented and deprives the [agency] of an opportunity to consider the matter, make its ruling, and state the reasons for its action.’ We do not allow issues to be raised for the first time in actions for judicial review of administrative agency orders entered in contested cases because to do so would allow the court to resolve matters ab initio that have been committed to the jurisdiction and expertise of the agency.” Delmarva Power & Light Co. v. Public Service Comm’n of Md., 370 Md. 1, 32 , 803 A.2d 460, 478 (2002) (citations omitted). I. Compliance with § 50-29(c) There is no disagreement between the parties that this project requires a PFP and that, because it does not require site plan approval, the PFP “must be submitted to the Director [of DPS] for review and approval at the time of application for a building permit.” See § 59-E-4.1. 3 Thus, the issue here is whether § 50-29(c) requires that the Board itself interpret and apply the setback provisions of the Zoning Code to determine whether the depth and width of 5.5 acre Parcel P, with the new 12,425 square foot building, are adequate for the off-street parking requirements of the proposed use, or whether the condition requiring DPS approval of the site’s PFP satisfies § 50-29(c). CCP argues that the Board cannot ⁹⁸ approve a preliminary plan for a building lot that shows the proposed building encroaching into setback areas, and CCP submits that the instant matter is no different.

The appellees, to the contrary, submit that adequacy of parking is much less rigid a concept, and more complex a land use analysis in the instant matter, than CCP’s analogy to siting a building on a lot. Section 59-E-4.4 sets forth the contents required of a PFP as follows: “The parking facility [sic] plan shall show the location and design of entrances and exits to public roads; the location and size of all buildings and structures; the location of parking spaces, directional markings, traffic-control devices and signs; walls and fences; landscape areas; slopes or berms; change of grades; planting materials, including the type and names of the materials to be planted; and such other information as required by either the director or the planning board. The parking facility [sic] plan shall be prepared with careful regard to the objectives for parking facilities enumerated in section 59-E-4.2 and the relationship between the parking facility and surrounding commercial,