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The Secret Sauce to Pad Site and Shopping Center Development in Montgomery County

Real Estate Law Update

What do companies like CVS, Starbucks, Chick-fil-A, and Taco Bell have in common? They’ve become adept at developing pad sites and redeveloping land in shopping centers.

But what is the secret sauce? In working with these companies and others, we’ve learned that – among other factors – nimbleness with the Montgomery County Zoning Ordinance and entitlement process is essential to obtaining approvals.

How Did We Get Here?

In 2014, the zoning world changed in Montgomery County for most commercial property owners, particularly shopping center owners and pad site retailers.

That year, virtually all commercial and central business district properties were rezoned to the Commercial Residential (CR) family of zones. The CR zone presents opportunities to develop properties with a mix of commercial and residential uses. It also can present challenges for those shopping center owners looking to redevelop older shopping centers or complete unfinished visions of development. In particular, the pad site retailer proposing a drive-thru has a whole new set of rules to consider when evaluating development opportunities.

Since the County’s adoption of the CR zoning, we have needed to creatively examine the new CR zone principles as we have studied sites and sought zoning approvals.

The Standard Method of Development

Most commercial shopping centers and pad sites are developed under the standard method of development of the CR zone.

Land developed under the standard method is provided no additional bonus density, but also is not required to provide public benefits. In the CR zone, a drive-thru is considered a limited use in certain circumstances, requiring site plan approval by the Planning Board, and a conditional use, which requires a decision by the County’s Office of Zoning & Administrative Hearings.

A CRT (Commercial Residential Town) zone tends to be the most advantageous zone within which to develop a pad site, given lower density and height recommendations, which make the site most economically viable for a retailer. A CRN (Commercial Residential Neighborhood) zone is a more challenging zone, within which to work, given certain setback requirements of a drive-thru to residentially zoned land.

Under the CR family of zones, a building developed under the standard method must be within 20 feet of the right-of-way line, and 70% of the building must be located within such setback. A drive-thru, drive aisle, or queuing area is prohibited between the street and the front of the building (although such may be considered under the conditional use process). Parking is prohibited between the building and the street.

The goal of these standards is to have buildings line and activate streets, and to encourage pedestrian activity. While these standards may work well in more non-auto oriented urban areas, they create challenges in more suburban settings.

Starbucks Succeeds in Burtonsville

The proposal: In 2017, Starbucks wanted to build a new drive-thru in Burtonsville. The shopping center was relatively new, but had been developed under old commercial zoning. It was a traditional shopping center with a ring road on the exterior of the center, buildings facing inward and a sidewalk network, interior to the site that connected the various businesses. Within the shopping center, a pad site had been graded, but had not yet been built. Starbucks proposed to build a drive-thru restaurant on the pad site.

The conflict: In initial discussions, planning staff opined that the new development had to meet all new CR zoning requirements because it did not meet certain grandfathering thresholds. This would have required that the new retail building be pulled within 20 feet of the street, which would have been out of character with the rest of the shopping center. It also would have created a disjointed pedestrian system, disconnected from the remainder of the center. The project would have died under this interpretation.

The creative solution: After digging through and analyzing old shopping center approvals, permit drawings, and statutory legislative history, the County agreed that the pad was grandfathered from new development standards and development could move forward as proposed.

Taco Bell Triumphs in Takoma Park

The proposal: Taco Bell decided it wanted to build a new restaurant within the City of Takoma Park. Company officials were considering a site that was in the parking field of an existing ALDI grocery store along New Hampshire Avenue.

The conflict: Although the CR zone allows drive-thru restaurants, the initial feedback was that a drive-thru was inconsistent with encouraging a pedestrian environment as discussed in planning documents. In this instance, the drive-thru would be located along New Hampshire Avenue – a six lane road that carries thousands of cars each day. While a drive-thru restaurant will serve patrons from their cars, it is not mutually exclusive with engaging a pedestrian environment.

The creative solution: The Taco Bell team engaged in significant community outreach and designed a restaurant that met its needs and also activated the street through an outdoor seating area and pedestrian connections. The City of Takoma Park Council recommended approval of Taco Bell’s drive-thru restaurant and the Planning Board approved its site plan.

Looking Ahead

Retail and pad site development continues to be a very active market in Montgomery County. While the changes in the Montgomery County Zoning Ordinance do result in new hurdles, these challenges can be negotiated and overcome.

Stacy Plotkin Silber is a land use attorney whose practice focuses on land use and zoning issues in Montgomery and Prince George’s counties. She helps clients navigate the complexities of securing approvals for their projects at the local and state levels of government. For more information, contact Stacy at (301) 841-3833 or spsilber@lerchearly.com.

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This content is for your information only and is not intended to constitute legal advice. Please consult your attorney before acting on any information contained here.

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