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Update: Ervin Denies that Costco Will Be Exempt from Community Benefits Agreement Bill

Montgomery County Council President Valerie Ervin (D-Dist. 5) denies making such a promise to Westfield about the future Costco in Wheaton.

Update, November 8, 8:30 a.m.: Montgomery County Council President Valerie Ervin (D-Dist. 5) did not return multiple phone calls by Patch asking for comment. However, the Gazette reported yesterday that Ervin denied promising Westfield that the community benefits agreement bill would not affect the Wheaton Costco. 

“I’ve never spoken to those people,” Ervin told the Gazette. “I don’t know what they are talking about.”

November 7, 3 p.m.: Westfield Wheaton and Costco claim they were promised an exemption from a bill that would require large retailers to negotiate community benefits agreements with three civic associations or show that they had acted in “good faith” to do so.

At the Planning, Housing and Economic Development Committee’s morning worksession on November 7, Montgomery County Councilmember George Leventhal (D-At Large) said that Westfield representatives had told him that Council President Valerie Ervin (D-Dist. 5), who is sponsoring the bill, had promised this exemption to Westfield and Costco.

Ervin could not be reached for comment.

Westfield and Costco came up repeatedly in the discussion at the worksession this morning in Rockville, as councilmembers questioned the bill’s drafter, senior legislative attorney Michael Faden.

A community benefits agreement, which would be a legally binding document, could require the business to do the following, according to Bill 33-11:

  • engage in hiring practices and training programs that favor Montgomery County residents,
  • mitigate traffic, security, noise, lighting and environmental impacts on the surrounding area,
  • assist community organizations
  • take action on “any other issue that is relevant to the operation of a large retail store of the community near that store.”

Bill 33-11 would require the retailer--not the developer--to choose three civic associations and negotiate with them--but not necessarily reach an agreement or concede anything, as long as the retailer could show that it had acted in “good faith.”

But Leventhal said that “it’s virtually impossible” under this bill to determine the definition of good faith.

Councilmember Marc Elrich (D-At Large) said that failing to reach an agreement would not be evidence of acting in bad faith.

“I frankly see this bill as relatively toothless,” Elrich said,  “The community has no veto. The fact that they did not get what they wanted is evidence of nothing.”

Leventhal used the case of Costco and Westfield to illustrate the problem that arises when civic associations disagree. Whereas members of the Kemp Mill Civic Association have told him that they are eager for the Costco, Levanthal said, the Kensington Heights Civic Association “has a lot of reservations” about the big-box store moving into Wheaton.

Suppose that Costco chooses to negotiate with both associations--or simply with the one that lines up with Costco’s interests. How, Leventhal asked, does one determine whether good faith bargaining has taken place?

“That is the classic dilemma,” Faden answered, adding that the county’s legal experts must be the ones to define “good faith.”

The Office of the County Attorney had not yet completed its review of the legal terms in the bill in time for the worksession.

Faden, who drafted the bill, confirmed that there are no legal rights for a civic association that has not been selected by the retailer to sit at the negotiating table. Leventhal concluded that therefore the retailer does not have an incentive to choose civic associations that would be unfriendly to the retailer’s goals.

Elrich said that he did not think that it ought to be the retailer that chooses the civic associations. “I think you need a more transparent and credible process,” he said.

Furthermore, nothing in the bill undercuts the authority of the county’s planning board to override the “legally binding” agreement between the retailer and a recognized civic association that has been chosen by the retailer, according to Faden.

“So when we say legally binding, we don’t really mean legally binding,” Leventhal said to Faden. “You’re interpreting that the planning board has the ultimate authority, but the bill doesn’t say so.”

For example, if a civic association wanted a small intersection in front of the big-box store, but the planning board wanted a larger intersection, then the planning board’s decision would win out.

“You shouldn’t imply that people have powers in this bill that they don’t have,” Elrich said.

While Costco would be exempt, the bill would affect the plans for a Wegmans in Germantown. “The bill as written will impede Wegmans from opening” without participating in the community benefits agreement process, Leventhal said. “In terms of general constituent input, certainly Costco has been controversial,” but Leventhal said that he had only heard positive reactions to the coming Wegmans.

Leventhal said that because the committee did not have the county attorney’s opinion, copies of relevant legislation in Prince George’s County and Washington, D.C., or what he deemed the legislative staff’s “best advice on grandfathering,” the committee was not in a position to act on this bill.

And indeed, the committee’s chair, Nancy Floreen (D-At Large), ended the worksession calling for just those things before the committee could meet again. No date has been set at this time for another worksession.

steve November 07, 2011 at 10:28 PM
With the stipulations montgomery county puts on business why would anyone want to come here. When will Costco, walmart or wegamns stop spending the time money or effort to locate in areas where they aren't wanted. The residents of Montgomery County surely don't need the sales tax revenue or the jobs. It is apparent that they would rather pay higher real estate taxes etc or create other revene methods to pay for its programs
Ben Schumin November 08, 2011 at 05:09 PM
I see a Dick's Sporting Goods in that artist's rendering as well as Costco. Is it the case that a Dick's Sporting Goods is coming to Wheaton as well?
Timothy November 08, 2011 at 05:34 PM
Yes, Mr. Schumin; Dick's Sporting Goods is slated to be on the lower level of the new structure, with Costco on the upper level. They will replace the old Hechts building.

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