City Of Bowie v. Mie Properties, Inc.

398 Md. 657, 922 A.2d 509 (2007)

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Nature of the Case

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Facts

The corporate limits of P were expanded as a result of the annexation of the Property. The process was initiated in 1985 by the application of the then - owners of the Property, Carley Capital Group and the University of Maryland Foundation, Inc. ('the Developers'). In consideration for the annexation of the Property, P agreed to extend roadways, water, and stormwater management, and other public facilities to the Property at a cost of $1 million to D and $3 million worth of Tax Increment Financing bonds to be recouped by P through a special taxing district planned for the Property. The Developers were to 'develop,' and P to 'fully support [] the development' of, the Property as 'a science and technology, research and office park.' The Developers executed the Covenants in favor of P, establishing a list of permitted uses for the Property (mostly office buildings and support facilities that go with them). The Covenants were duly recorded. Ownership of the Property changed several times since 1985; however, the terms of both instruments remained undisturbed in the main. Around 2000, D and its related entities became the owners of the remaining portions of the Property and began developing part of it with 150,000 square feet of 'flex-space' buildings to accommodate various tenants. P leased a portion of this space to C & C Dance Studio, which P contended was in violation of the Covenants. P commenced this litigation to prevent the Dance Studio's further use of its leased space. The Circuit Court reasoned that there had been 'no radical change to the character of the neighborhood [of the Property] so as to defeat the purpose [] embodied in the Covenants and the Annexation Agreement.' Further, the development of a science and research technology park was found not to be dependent on the participation of the University of Maryland. Thus, the University's withdrawal from the project was 'not a deal breaker,' vitiating the purpose of the Covenant. D appealed. In those further proceedings, the Circuit Court ordered the court to revisit the question of the Covenants' validity vis-a-vis their purpose in light of a different standard than that applied originally by the Circuit Court. The Court of Special Appeals concluded that the continuing vitality of a restrictive covenant is determined by the reasonable probability that the parties will be able to achieve the goals of the Covenants within a reasonable period of time. P petitioned us for a writ of certiorari on the question of whether the Court of Special Appeals identified an incorrect standard for determining the continuing validity of the Covenants. D also appealed requesting a review of the remaining issues decided against it by the Court of Special Appeals.