U.S. House passes bill on Eminent Domain

In 2005, the U.S. Supreme Court ruled in Kelo v. City of New London that local government could take over private property of several homeowners for the purpose of converting the property commercial use. The case was unique in that eminent domain had traditionally been used for public works projects - such as highways or public facilities. The Court held that "The city’s determination that the area at issue was sufficiently distressed to justify a program of economic rejuvenation is entitled to deference"; essentially, local governments were best suited to determine what public use was locally under the takings clause of the Fifth Amendment. Kelo drew much backfire, and in response many state governments enacted laws limiting eminent domains takings to very specific uses.

On February 28, 2012, the US House of Representatives passed a bill seeking to limit the Kelo ruling. The bill, H.R. 1433 (known as the Private Property Rights Protection Act) is co-sponsored by James Sensenbrenner, R-Wisconsin, and Maxine Waters, D-California. According to the Washington Post, the

"legislation would withhold for two years all federal development aid to states or locales that take private property for economic development. It also bars the federal government from using eminent domain for economic development purposes and gives private property owners the right to take legal action if provisions of the legislation are violated."

The Private Property Rights Protection Act was opposed by John Conyers, D-Michigan, who was concerned that the bill exempted the Keystone XL pipeline from the eminent domain restrictions. The Keystone XL pipeline is a project by a Canadian company which proposes to build a gas pipeline from Canada to Texas. Additionally, Rep. Conyers noted that over 40 states have already enacted legislation in response to Kelo.

It is interesting to note that the property in question in Kelo was taken initially for Pfizer to develop a new location. In 2009, Pfizer abandoned the plans. For more information, see this CBS news article from November, 2009.

Patty Rouse, widow of James Rouse, passes away

From the Baltimore Sun: Patty Rouse, widow of Columbia founder, dies

Along with jobs, Fort Meade growth brings traffic concerns

From the Baltimore Sun: Along with jobs, Fort Meade growth brings traffic concerns

Erosion Prevention in Ellicott City

From the Baltimore Sun: Howard moves to stem erosion, pollution in Ellicott City waterway

Forest Conservation

Gorman Park, September 2011

Recently, there have been a few articles in the local press discussing forest sustainability. The Baltimore Sun wrote about complaints from forest advocates regarding development around Patapsco Valley State Park on both December 6 and December 7. After reading these articles, and driving by the Christmas tree lot set up at our local high school, I decided to look into forest conservation in Howard County.

In 1991, Maryland passed the Maryland Forest Conservation Act, which was followed by the Howard County Forest Conservation Act in 1993. These acts require developers to:  

address forest resources during the planning and review phases of land development. Any project proposing to clear or grade more than 20,000 square feet of forested land must provide a specified acreage of forest retention, reforestation, and/or afforestation relative to the proposed extent of forest clearing or grading.

The developer enters into a Forest Conservation Agreement, which is an easement, with Howard County. The developer must provide a Plat of Forest Conservation Easement (Plat), a Forest Conservation Plan (FCP), and a Deed of Forest Conservation Easement (Deed) before the County approves a final development plan. The Forest Conservation Plan details what actions the developer must take for the property in question . This includes whether the developer is engaging in forest retention or if he is to plant new trees within specific easements, including what species and sizes of trees are to be planted, and what protections are to be provided to the easements before, during, and after development.

In the event that there is no opportunity for forest conservation, the developer must pay a fee assessed per square foot of property to be developed.

The Department of Recreation and Parks (DRP) was granted the power to inspect forest easements by the Department of Planning and Zoning (DPZ) in 2001.

Now Agreements permit DRP staff to access easement areas to complete forest conservation inspections and to investigate possible violations of the Howard County FCA.  DRP staff members are directed by County planners within DPZ when to inspect specific forest conservation projects.  The costs of inspections are funded through fees paid by developers to the County.  Investigations of possible FCA violations are initiated by reports from concerned citizens, through the use of aerial photography or Geographical Information System (GIS) maps, and as a result of County personnel discovering a possible violation during the completion of their day-to-day activities.

Howard County requires a two-year survival and maintenance period for all forest conservation projects. Developers are required to post a bond throughout this period to guarantee compliance. A forest conservation project must pass an initial inspection before the two-year survival and maintenance period commences.  The inspection determines whether easement boundaries are correct, if planting and forest retention match the FCP, that protective signs are in place, that any violations are mitigated, that invasive species are being managed, and that the public is being educated.  A plot survey of reforestation and afforestation areas is completed to determine FCP compliance and tree survival.  A survival rate of 90% or better is required to initiate the two-year survival and maintenance period. A survival rate of 75% or better is required after two years.  Inspections may continue until the developer brings the project into compliance with the FCA.

If the DRP determines that there are encroachments or violations during the two-year survival and maintenance period, the developer must correct these issues. After the two-year survival and maintenance period ends, the DRP enforces FCA regulations. The DRP first tries to correct violations through public education and cooperation. After that, DRP can issue warning notices and civil citations to force compliances. Any collected fines fund DRP's restoration plan for mitigation of the site.

Howard County provides the following recommendations for project success in regards to forest conservation:

1. Request an extension from DPZ if a project is incomplete.
2. Verify the installation and replacement of forest conservation signs prior to scheduled inspections.
3. Educate the local community of forest conservation objectives and regulations.  It is best to respond to small problems before they become big problems.
4. Routinely monitor easements to assess tree survival and identify site-specific stressors.  Planting the right trees for a site will cost less than repeatedly replacing the wrong trees.  A developer may need to revise an FCP to deal with a problem.
5. Numerous invasive species thrive in Howard County and are capable of overtaking existing and planted trees.  Once again, routine monitoring and management can prevent a small problem from becoming a big problem.

Urban Farming

The ABA has a great article on urban farming and the zoning issues that affect it:

http://www.abajournal.com/magazine/article/plowing_over_can_urban_farming_save_detroit_and_other_declining_cities_will

Banks Giving Away Foreclosures

Earlier in the week, the Washington Post reported that some banks are giving away foreclosed properties rather than trying to maintain and sell homes in blighted areas. The article highlighted the efforts in Cleveland to minimize the damage an abandoned home can do to an already depressed neighborhood. In Cleveland, the Cuyahoga County Land Reutilization Corporation receives properties from banks which donated under an Ohio law passed in 2009 designed to created county land reutilization corporations (LRCs) - which are being referred to as land banks.

Land banking is a traditional method of investing. A purchaser will acquire large tracts of undeveloped land and hold the property until the time it becomes profitable again. In Cleveland, however, the Cuyahoga County Land Reutilization Corporation operates a little differently. The group "is committed to the healthy, sustainable redevelopment of Cuyahoga County. The CCLRC will exhibit this ongoing commitment through efforts such as deconstruction, the appropriate and innovative re-use of vacant land, and the use of energy efficient, green rehabilitation and new construction standards."

Benefit Corporations, Benefit LLCs, and Marketing

In June, Maryland saw the creation of America's first benefit LLC, Clean Currents, a green energy company. Clean Currents was created under the recently passed SB 595, a follow up to the state's benefit corporation law passed last year. SB 595 was sponsored by State Senator Jamie B. Raskin (D-Mont).

Two weeks ago, Governor Martin O'Malley attended the inauguration of Blessed Coffee, a Takoma Park coffee shop. Blessed Coffee is a registered benefit corporation under the law passed last year. The company has pledged to allocate 50% of its net profits from wholesale revenue to social programs in Ethiopia's coffee growing regions, and 50% to community based organizations. O'Malley said of Blessed Coffee that “(i)t's a corporation that looks at not only the bottom line of profit, but also the bottom line of social responsibility.”

The Washington Post article, Takoma Park coffee firm holds 'Blessed' event, in quoting Raskin highlights one of the challenges the state has in encouraging benefit corporations:

“'The law allows community-minded companies to take the high bid,'    Raskin said.

The main benefit of the law, however, is as a branding and marketing tool. The community feels that it's a part of the business, and people are often willing to pay for products when they know the money goes toward groups and causes they support, Raskin said.” (sic)

Cause marketing can be effective. A 2010 study said that 41% of Americans have purchased a product in the past year because the product was associated with either a social or environmental cause. The same study said that 88% of Americans think it is acceptable for a company to involve a cause or issue in its marketing; contrast this to the Millenial Americans, of whom 94% think it is acceptable for a company to involve a cause or issue in its marketing. Additionally, Millenials use a company's support of social or environmental issues to determine other corporate interactions. 87% of Millenials use social and environmental causes as a benchmark to determine where to work. 79% of Millenials use the same benchmark to determine where to invest. As Millenials become more active participants in the marketplace, benefit corporations and benefit LLCs are poised to reap the benefits (pun intended).

B Corps in Maryland

Benefit Corporations (also known as B Corps) are corporations formed with the intent to create a beneficial public good. B Corps are held to a higher standard than traditional corporations in that they must create social, environmental and community benefits. The first official B Corp was created in 2007, when Method, a manufacturer of green cleaning products, amended their corporate documents to reflect their intention of benefitting the public good through their business practices. Maryland became the first state to create a separate legal entity for B Corps in April 2010.

B Labs, is a non-profit which provides certification as a B Corp to qualified business applicants. The goal of B Labs is to prevent corporations from “greenwashing”, by providing a third-party stamp-of-approval for businesses that are actually fulfilling their claims. Certification is a stringent process, which requires passing B Labs B Impact Rating System. Applicants fill out a 220 question survey with questions delving into things such as recycling practices, employee demographics, community involvement, and employment benefits. B Labs compiles the results, and after tallying the points, grants certification to companies that have met the minimum passing rate.

On B Labs website, the organization features highlights of some corporations which have passed certification. Emphasized areas include employee demographics, sustainable environmental practices, and community involvement. For example, B Corporation says Method has “>50% women” as employees, has “>50% facilities LEED certified”, and that “>50% employees participate in company-wide service days”.

B Labs certification is not required for a Maryland company to register as a B Corp, but it certainly helps for the business to prove that the requirements of the Maryland law are being met. Additionally, certified B Corps can obtain discounted goods and services from other certified B Corps.

There are currently no tax incentives for B Corps at either the federal or state level. Philadelphia recently instituted a tax break for B Corps, a move that is expected to inspire other municipalities to offer similar incentives. Additionally, it is not unreasonable to assume that state and federal tax law will eventually be amended to reflect the unique nature of B Corps.

If you have any further questions about how becoming a B Corp can benefit your business, please feel free to contact our office.