Handley v. Ocean Downs, LLC

ADKINS, J. This appeal arises from the approval of a special use permit authorizing an off-track betting (“OTB”) facility in Cambridge. In October 2001, Ocean Downs, LLC, appellee, filed an application for a special use permit with the Board of Zoning ⁶²¹ Appeals of the City of Cambridge (“the Board”), seeking permission to operate an OTB facility in the Cambridge Plaza Shopping Center, off U.S. Route 50. After holding a public meeting, the Board approved the special use permit. Mary Handley, Cheryl Michael, Barry Miller, and George Wheatley, Jr., appellants, all attended the Board hearing on the OTB proposal.

Appellants filed a petition for judicial review of the Board’s decision in the Circuit Court for Dor-chester County, arguing, inter alia, that the Board and the Planning and Zoning Commission (“the Commission”) did not follow proper procedure in reviewing and granting the permit. The circuit court affirmed the Board’s determination. In challenging the circuit court’s judgment, appellants present the following issues for our review: I. Did the Commission fail to satisfy its legal obligation to undertake a study of, and to issue a report concerning, the likely effect of the proposed special use permit?

II

Did the Commission and the Board violate Maryland’s Open Meetings Act, and did the circuit court err in failing to address this issue?

III

Regarding the merits of the Board’s decision, A. Did the Board disregard its statutory obligation to consider whether conditions or safeguards should have been imposed upon the special use permit? B. Did the Board make sufficient findings to support its decision? C. Was the Board’s decision supported by substantial evidence in the record? We hold that the circuit court erred in failing to consider appellants’ Open Meetings Act claims set forth in Issue II.

Accordingly, we remand this case for the circuit court to consider whether such violations occurred and, if so, the appropriate remedy. We hold the circuit court ruled correctly on Issues I and III. ⁶²² FACTS AND LEGAL PROCEEDINGS In early October, Ocean Downs filed its application for a special use permit authorizing the OTB facility. Thereafter, on October 18, the application was referred to the Commission for study and report. The Commission held a public hearing on the same day, notice of which was posted sometime that day in City Hall.

The Commission considered two applications at the 40 minute meeting, one of which was Ocean Downs’ application. The minutes of this meeting reveal that a Department of Planning and Zoning staff member opened the discussion by explaining the location of the proposed OTB facility, its hours of operation and proposed area, and its anticipated number of employees. The staff member reported that “[a]ll necessary utilities [were] on site,” and sufficient parking facilities were already in existence. One of the Commission members questioned whether the remainder of the shopping center would be attractive to future tenants if an OTB facility was located there.

Another Commission member responded that the facility would likely attract more people to Cambridge and that “he could not see where an [OTB facility] would cause another business to be run down.” The Commission members also discussed the fact that the OTB facility would have to rely on outside business to be successful, .and that it could not survive on local patronage alone. They commented that the City should be encouraging new businesses to establish themselves in Cambridge. The Cambridge Mayor, who was in attendance, reported that Ocean Downs had already talked with a number of businesses about moving into the shopping center. The Commission member who ultimately voted against the proposal expressed his concern that “the project looked too good to be true and ... compared it to a ‘dangling carrot’ and jumping at it too fast.” An audience member commented that the Commission should consider that “the majority of the existing businesses [were] not in favor of the project,” out of a concern regarding ⁶²³ the impact of the OTB facility on their businesses.

He feared that the OTB facility would “completely change the lifestyle of the community.” At the conclusion of the October 18 hearing, the Commission, by a 4 to 1 margin, recommended approval of Ocean Downs’ application. On October 23, 2001, the Board convened a public hearing on Ocean Downs’ application. 1 At the hearing, the City Planner described the proposed special use. He reported that the OTB facility would consist of 10,000 square feet of space, including a restaurant. Ocean Downs also requested pre-approval of a future expansion to 17,000 square feet.

The facility would be open from 11:00 a.m. to 11:00 p.m., and would employ 28 people. The City Planner also submitted to the Board the minutes of the October 18 Commission meeting, and a Department of Planning and Zoning Staff Report, which described the property. 2 He announced that the Commission had recommended approval of the special use permit by a 4 to 1 margin. The hearing then was opened for comments, beginning with the applicant’s representatives. Ocean Downs’ attorney questioned William Rickman, the president of Ocean Downs, regarding the impact of the proposed OTB facility.

Rickman stated that the proposed site was surrounded by property predominantly zoned C-2, or commercial. According to Rick-man, there were no churches or schools within a quarter-mile of the site. There was one day care facility nearby, but it was over 1,000 feet from the proposed OTB site. Rickman testified that his plan was to purchase the entire shopping center as a real estate investment, and then re-lease the facility.

At the time of the hearing, the shopping center ⁶²⁴ was only 30 percent leased. In terms of the OTB facility itself, Rickman reported that he planned to include a sit-down restaurant with a 50-person capacity. He had no plans to house slot machines in the facility. Rickman stated that he did not recall his other OTB facilities having any detrimental effect on their respective communities.

When asked by the Board how the proposed OTB facility might “impact and ... benefit the community and the surrounding areas,” Rickman responded that the facility would not “have a tremendous impact or a tremendous benefit ... because it has the impact of a restaurant ... or a sports bar[.]” He stated that the biggest impact would come if he was able to increase occupancy rates in the shopping center as a whole, and bring other new businesses into the area. He described this potential as a “win-win situation for both the community and for [him.]” Rickman stated that he expected local people to make up less than 50 percent of his patrons, but that the business would draw patrons from Salisbury and Easton. He expressed doubt that he would go forward with purchasing the shopping center if the OTB facility was not approved. Rickman then took questions from audience members.

When asked whether he would recommend that the Board impose a condition on its approval of the application “that there not be any other forms of gambling in this whole property,” Rickman responded that he would not object to such a condition if it were imposed county-wide, rather than just on his application. Rickman stated that he felt the OTB facility would help the community by creating jobs. Not only would the facility itself employ 28 people, Rickman contended, many more jobs would be created if he was successful in filling up the surrounding shopping center. Many audience members expressed concern about the detrimental effects of gambling on communities.

Opponents of the OTB facility introduced into the record petitions signed by over 100 county businesses that opposed the proposed OTB facility. Several opponents expressed concern about the im ⁶²⁵ pact of gambling on children, caused by parents gambling away their paychecks. An individual from the local health system expressed concern about patients who had developed “suicidal tendencies ... due to their gambling.” One opponent, a representative of an anti-gambling advocacy group called No Casino, expressed skepticism that the Board had taken enough time to study the proposal. He also characterized OTB facilities as “open[ing] the door to slots” in Cambridge.

He presented to the Board a packet of statistics compiled by the National Coalition Against Legalized Gambling, entitled The A, B, C and Ds of Casino Gambling. He urged the Board to consider the “facts about addictions, bankruptcies, crime, corruption and [the way gambling] devastates families[.]” According to this No Casino representative, “problems associated with addicted gamblers affect the entire community through family abuse, job neglect, embezzlement, fraud, credit card debt, bankruptcy and even suicide.” Another opponent urged the Board to keep “in the back of [its] mind” its ability to impose conditions on Ocean Downs’ application, though he did not specifically propose any such conditions. He also submitted to the Board a two-year study published by the National Gambling Impact Study Commission in 1999. He specifically quoted several recommendations made as a result of that study, and questioned why no economic impact study had been performed on the proposed OTB facility.

Near the conclusion of the comment period, appellant Hand-ley spoke. 3 She essentially summarized the concerns raised earlier in the hearing by opponents to the proposal. Her comments, like the comments of those that preceded her, clearly indicated her opposition to OTB or any gambling facility in Cambridge or Dorchester County, rather than to the specific facility proposed. After the public comment phase of the hearing was closed, the Board had an off-the-record discussion. "When the Board ⁶²⁶ called the meeting back to order, the Board’s attorney explained that, during that discussion, the Board had asked for advice regarding the applicable law governing special use permits.

He announced to the audience the criteria the Board must use in determining whether to approve the application. The Board then resumed its on-the-record deliberations. One Board member commented that it would be difficult to downgrade the area surrounding the OTB site because the shopping center already had a low percentage occupancy. Another Board member concluded that the project should go to referendum vote, due to the potentially large impact it could have on the community.

At the conclusion of the meeting, the Board voted 3 to 1, with one member abstaining, to approve the special use permit. The Board’s written findings, which offered some insight into the reasons for its decision to approve the OTB facility, were filed on November 13, 2001: The Board listened to over three (3) hours of testimony for and against gambling in general and some comments as to off track betting in particular. Unfortunately the bulk of the testimony pertained to gambling in general not the particular proposal before the Board. Great concern was expressed over casino gambling and slot machines, matters not before the Board.

The Board finds that the Cambridge Plaza Shopping Center and more particularly the former Rite Aid site at the shopping center is an appropriate location for the [OTB] operation. The shopping center is a commercial area (C-2 zone) and has good access (just off Rt. 50 with four lane divided highway). There is ample parking, being parking for the shopping center. There are no churches, schools, or uses sensitive to the proposed use nearby.

Applicant provided this information and it was not refuted by the opposition. There was mention of a day care operation nearby but no comments directly discussing impact on the day care operation were provided. ⁶²⁷ The only comment that the location would not be appropriate was a quick comment that it shouldn’t be so near the Hyatt. The Board notes that no opposition was presented by the Hyatt therefore it would appear that the issue is not of grave concern to the Hyatt management. The Board finds that the comments by the opposition regarding gambling in general and [off track betting] were not on point for the Board to consider.

However the extensive opposition to gambling and off track betting in general concerned one Board member to the point he abstained from voting and suggested the City Council consider a referendum on the issue. Motion to approve the special use permit as requested.... Passed three to one and one abstention. (Emphasis added.) Displeased with the Board’s decision, appellants filed a petition for judicial review in the Circuit Court for Dorchester County, challenging on several grounds the Board’s authorization of the special use permit.

In their argument to the court, appellants asserted that (1) the Board’s notice of the public hearing was deficient because it was published 14 days, rather than 15 days, before the hearing; (2) the notice of hearing before the Commission was insufficient; (3) the Commission’s recommendation did not comply with the Cambridge City Code because it failed to contain a study and report on the effect of the proposed use on the comprehensive plan and property values; and (4) the Board violated the Open Meetings Act. The circuit court affirmed the Board’s decision. The court ruled that notice was adequate because appellants’ presence at the public hearing demonstrated actual notice. 4 It also ruled that to bring a claim for violation of the Open Meetings Act, appellants needed to file a separate petition, and that to assert such allegations in their petition for judicial review was insuffi- ⁶²⁸ dent. Regarding the adequacy of the Commission’s review, the circuit court ruled that appellants had failed to meet their burden of demonstrating that the proposed special use would have an adverse impact on the community.

The court ultimately held that there was sufficient evidence in the record to support the Board’s decision to approve the special use permit. At the conclusion of the hearing, the court asked appellants’ counsel whether it had addressed each of appellants’ claims. Appellants’ counsel answered in the affirmative. DISCUSSION Before discussing the issues raised by appellants, we pause to consider Ocean Downs’ challenge to appellants’ standing to file this petition for judicial review.

The circuit court assumed, without deciding, that appellants had standing. Without deciding whether Ocean Downs properly may assert a standing challenge before this Court when it failed to file a cross-appeal challenging the denial of its motion to dismiss for lack of standing, we hold that Miller had standing to file a petition challenging the Board’s administrative action. Because Miller had standing, we need not decide whether the remaining three appellants also had standing; even assuming they lacked standing, the viability of the petition is ensured by Miller’s standing. See Bryniarski v. Montgomery County Bd. of Appeals, 247 Md. 137, 145 , 230 A.2d 289 (1967).

We explain. Mere presence at an administrative proceeding, without active participation, is sufficient to establish oneself as a party to the proceeding. See Sugarloaf Citizens’ Ass’n v. Dep’t of Env’t, 344 Md. 271, 287 , 686 A.2d 605 (1996). Ocean Downs concedes that Miller participated in the October 23 Board meeting because his signature appears on the hearing sign-in sheet.

The Cambridge City Code provides that “persons jointly or severally aggrieved by any decision of the Board of Appeals, or any taxpayer ... of the municipality” have standing to seek judicial review of that decision. Cambridge City Code § 20- ⁶²⁹ 22(a). This language mirrors that found in Md.Code (1957, 1998 RepLVol., 2002 Cum.Supp.), Article 66B section 4.08, which governs zoning appeals. As appellants properly assert, the Court of Appeals has interpreted this language to evidence a legislative intent to “give a taxpayer standing to appeal notwithstanding lack of aggrievement.” See Boulden v. Comm’rs of Elkton, 311 Md. 411, 414 , 535 A.2d 477 (1988).

As a Cambridge taxpayer, Miller had standing to petition for judicial review of the Board’s action. See Cambridge City Code § 20-22(a). The record discloses that Miller filed in the circuit court, one day before the circuit court hearing, an affidavit attesting to his taxpayer status. Md. Rule 7-202(c) provides that, as part of the petition for judicial review, the petitioner must “state whether [he or she] was a party to the agency proceeding.

If the petitioner was not a party, the petitioner shall state the basis of the petitioner’s standing to seek judicial review. No other allegations are necessary.” In their petition for judicial review, the petitioners, including Miller, stated that they “were not parties to the proceedings, per se, although they offered testimony at the public hearing on [Ocean Downs’ proposal] and as such are interested parties.” Through this statement, the petitioners complied with Md. Rule 7-202(c). Later, when Ocean Downs challenged the petitioners’ standing through a motion to dismiss, Miller filed an affidavit attesting to his status as a Cambridge taxpayer. Thus, we hold that Miller had standing to file the petition for judicial review.

I. The Commission’s Obligation To “Study And Report” On Impact Of Special Use Permit Appellants assert that the Board’s decision to grant the special use permit should be vacated because the Board failed to meet its obligations under section 20-16(b) of the Cambridge City Code. Under that section: ⁶³⁰ (b) Before authorization of any of the special uses listed in subsection (a) of this section, the request therefore shall be referred to the City Planning and Zoning Commission for study and report concerning the effect of the proposed use on the comprehensive plan and on the character and development of the neighborhood. A public hearing shall be held in relation thereto 5 before the [Board] notice and publication of the time and place for which shall conform to the procedure proscribed in section 20-25 for hearings and amendments. (Emphasis added.) Subsection (a)(10) of section 20-16 specifically classifies “[s]at-ellite simulcast betting,” as a special use or special exception use, for which the Board may grant a permit.

See Cambridge City Code § 20-16(a)(“The [B]oard ... may grant a special use permit ... for the following special uses ... which are otherwise prohibited by this chapter, and may impose appropriate conditions and safeguards to protect the comprehensive plan and to conserve and protect property and property values in the neighborhood”). Appellants assert that the Commission never undertook a study of the OTB facility, and never issued the required report. 6 Instead, they assert, the Commission engaged in “brief speculation and conjecture, of no more than a few minutes’ duration, regarding whether the [proposed OTB facility] might or might not succeed.” In addition, appellants argue, no request was made by the Commission to its staff for advice, no effort was made to define the bounds of the ⁶³¹ neighborhoods that might be affected, and no contact was made with the owners of adjacent businesses. Ocean Downs responds that the City Planner submitted a written report at the Commission hearing, describing the proposed use, hours of operation, and zoning, and concluding that the existing infrastructure could support the utility and parking needs of the proposed OTB facility. Ocean Downs additionally points out that appellants attended the Board hearing, but made no objection to the staff report, deliberations, or the form of the Commission’s recommendation.

Furthermore, it asserts, the word “shall” in section 20-16 is “directory, not mandatory.” We reject appellants’ contention of error because we agree with Ocean Downs that the term “shall,” as used in section 20-16 of the Cambridge City Code, is directory only. Thus, even assuming that the Commission failed to fulfill its duty to “study and report,” such deficiency would not invalidate the Board’s subsequent decision to approve the special use permit authorizing the OTB facility. “[I]t is well settled that the use of the words ‘shall’ or ‘may’ [is] not controlling, in determining whether a particular provision is mandatory or directory.... The question of construction turns upon the intention of the Legislature as gathered from the nature of the subject matter and the purposes to be accomplished.” To overcome the presumption that the use of “must” makes an enactment mandatory, courts will also look to whether the enactment provides a sanction for noncompliance. The lack of any sanction in the statute or provision tends to militate towards a finding that the statute or provision is directory.

Columbia Rd. Citizens’ Ass’n v. Montgomery County, 98 Md.App. 695, 701 , 635 A.2d 30 (1994)(emphasis added and citation omitted); see G & M Ross Enters., Inc. v. Bd. of License Comm’rs of Howard County, 111 Md.App. 540, 543-45 , 682 A.2d 1190 (1996)(when the word “shall” is determined to be directory, Accardi doctrine, which provides that agencies ⁶³² “ ‘must scrupulously observe rules, regulations, or procedures which it has established,’ ” does not apply) (citation omitted). In Columbia Rd. Citizens’ Ass’n , a citizen’s association appealed a circuit court judgment affirming the Montgomery County Board of Appeals’ approval of a special exception for a nursing home in a residential area.

One of the association’s arguments was that the Board erred in granting the special exception without obtaining the comments of the Montgomery County Planning Board or its staff, or a statement that no review or comment was necessary, and in doing so violated a provision of the county zoning ordinance. The ordinance provided that, if an applicant wished to amend its petition prior to the hearing, the amendment “must ... be referred to the planning board[.]” The ordinance further provided that, upon transmittal “the planning board or its staff must comment on the amendment or state that no further review and comment are necessary.” Columbia Rd. Citizens’ Ass’n, 98 Md.App. at 698-99 , 635 A.2d 30 (emphasis added). In holding that the word “must” in the ordinance did not make the commenting requirement mandatory, we relied on the absence of any sanction in the ordinance for the failure to submit or consider comments. 7 See id. at 703 , 635 A.2d 30 .

Here, as in Columbia Road Citizens’ Ass’n, the City Code has no sanction for non-compliance with this “study and report” provision governing the Commission. Accordingly, following the reasoning in Columbia Rd. Citizens’ Ass’n , we hold that the “study and report” requirement in section 20-16 is not mandatory, but rather is directory. As such, even if the Commission, an advisory body, failed to “study and report” on the effect of the proposed OTB facility on the character and development of the neighborhood, that would not invalidate the Board’s subsequent decision to approve the special use permit. ⁶³³ II.

Open Meetings Act Violations Maryland’s Open Meetings Act (“the Act”) is codified in Md.Code (1984, 1999 Repl.Vol), section 10-501 et seq. of the State Government Article (“SG”). It applies to “public bodies,” a class to which both the Commission and the Board belong. 8 See SG § 10-502(h). The Act embodies the philosophy that public business should be performed in a public manner, accessible to interested citizens, and that this type of open government is “essential to the maintenance of a democratic society.” SG § 10-501(a). Such open government “ensures the accountability of government to the citizens of the State[,] ... increases the faith of the public in government and enhances the effectiveness of the public in fulfilling its role in a democratic society.” See SG § 10-501(b).

As such, [e]xcept in special and appropriate circumstances when the meetings of public bodies may be closed under this subtitle, it is the public policy of the State that the public be provided with adequate notice of the time and location of meetings of public bodies, which shall be held in places reasonably accessible to individuals who would like to attend these meetings. SG § 10-501(c). The Court of Appeals has commented that this legislative policy “undergirds and pervades the Act and necessarily sets the general direction for its interpretation.” See Wesley Chapel Bluemount Ass’n v. Baltimore County, 347 Md. 125, 128 , 699 A.2d 434 (1997). Alleged Violations Appellants raise a number of challenges based on violations of the Act.

First, appellants assert that, because notice of the ⁶³⁴ Commission hearing was not posted in City Hall until the day of that hearing, the Commission violated SG section 10-506(a), which requires a public body to “give reasonable advance notice of the session” in writing. Second, appellants assert that the Board violated SG section 10-508 in several ways by conferring off-the-record during the October 23 public hearing. SG section 10-508(a) permits public bodies to “meet in closed session or adjourn an open session to a closed session” only to undertake one of 14 specific actions set forth in that subsection. To close a session, the statute requires that “a majority of the members of a public body present and voting vote in favor of closing the session[.]” SG § 10-508(d)(l).

The Act also provides: (2) Before a public body meets in closed session, the presiding officer shall: (i) conduct a recorded vote on the closing of the session; and (ii) make a written statement of the reason for closing the meeting, including a citation of the authority under this section, and a listing of the topics to be discussed. (3) If a person objects to the closing of a session, the public body shall send a copy of the written statement required under paragraph (2) of this subsection to the Board. (4) The written statement shall be a matter of public record. SG § 10-508(d).

Appellants assert that the Board wholly disregarded its obligations under section 10-508 by closing the public hearing without first voting to close it, and by failing to make a written statement explaining its reasons for closing the hearing. They also assert that the Board violated SG section 10-509 by not taking minutes of what was discussed during its off-the-record conference. The trial court did not rule on these alleged violations because it decided that they were not properly raised in the ⁶³⁵ manner required by the Act. 9 Because we disagree with this holding, we shall remand the case to the trial court to consider these alleged violations. We explain below.

Time And Method Of Enforcement Of The Act Section 10-510, entitled “Enforcement,” authorizes an aggrieved party to file a petition in the circuit court alleging Open Meetings Act claims. Although several reported decisions in Maryland interpret the Open Meetings Act and its provisions, none addresses whether the “petition” authorized by section