Planning Commission Memo
MEETING DATE: February 26, 2025
REPORT DATE: February 19, 2025
RESPONSIBLE STAFF: Manisha Tewari
SUBJECT:
title
Annexation Petition ANX2023-00147, for Review of the Preliminary Annexation Plan for the Washington Metropolitan Area Transit Agency (WMATA)-owned Shady Grove Metro Station Properties and a Portion of the CSX Transportation, Inc. Property; and to Set the Planning Commission Public Hearing Date; Mayor and Council of Rockville, Applicants
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BACKGROUND:
The proposal is a city-initiated annexation of the Shady Grove Metro station property that will enlarge the corporate boundary by approximately 107.9 acres of land. The Mayor and Council introduced the resolution for the annexation at their meeting on October 23, 2023, thus initiating the process for annexation. As described in the annexation resolution (Attachment 1), the total annexation area is approximately 107.9 acres.
If approved, the annexation area would be incorporated within the city’s corporate limits and be subject to the Charter, laws, ordinances, and regulations of the City of Rockville. Staff recommends Rockville’s Mixed-Use Transit District (MXTD) zoning for the property upon annexation.
Rockville 2040 Comprehensive Plan
Rockville’s 2040 Comprehensive Plan was adopted in Aug 2021. The Municipal Growth Element (MGE) is an individual element of the comprehensive plan. Per State law, the MGE should identify future growth area outside the existing corporate limits and define the limits of municipal growth, also called the maximum expansion limits (MEL).
The MGE also recommended an annexation strategy within the MEL, identifying areas where the city should conduct a proactive approach towards annexations, where annexation is possible in the near-term and the potential annexation is likely to be beneficial to the city.
Since the City cannot annex an area that is not included in the MGE, Mayor and Council carefully considered and identified its expansion limits during the development of the MGE. The inclusion of a property or properties in the MGE does not mean that the city must annex that area, but it does communicate to its residents, the county, and other stakeholders that certain areas have the potential to be annexed.
The MGE included an annexation strategy for the city and has defined areas where the city can conduct a proactive approach towards annexation. Some of the guiding principles for proactive annexations were to consider properties that are logical and feasible with respect to being adjacent and contiguous as required by the State law; and those that provide inherent advantages to both the City and property owners with the annexation; and to consider each annexation on its own merits on a case-by-case basis.
Maryland State Law
Annexation is defined as the legal process by which land is added to the corporate city limits. Under State Law, Rockville may annex contiguous and adjoining unincorporated properties that are within the City’s Maximum Expansion Limits (MEL), as adopted through the Municipal Growth Element of the Comprehensive Plan.
The annexation process is outlined in Title 4, Subtitle 4 of the Local Government Article of the Annotated Code of Maryland (LG Article). In Maryland, an annexation can be initiated by a petition signed by at least 25% of the registered voters who are residents in the area to be annexed and the owners of at least 25% of the assessed valuation of the real property in the area to be annexed. Alternatively, a municipality’s legislative body may initiate an annexation. To do so, State law requires that the municipality’s legislative body obtain consent from: (1) at least 25% of the registered voters who are residents in the area to be annexed; and (2) the owners of at least 25% of the assessed valuation of the real property in the area to be annexed. A public hearing is required as part of the annexation process.
One important exception to the above-mentioned requirements relates to tax-exempt properties. The Maryland Court of Appeals (now the Maryland Supreme Court) has ruled that a municipal corporation’s legislative body may introduce a resolution to annex tax-exempt land without obtaining the consent of the owners of such land. Since public records show that the WMATA property as proposed for annexation has a tax-exempt status, and because there are no registered resident voters within the property, per the Maryland Court of Appeals ruling, Mayor and Council is not required to secure the consent of owners of the WMATA properties before initiating the annexation of such properties.
In addition to the WMATA property, the proposed annexation includes a portion of land owned by CSX Transportation, Inc. in between the east and west side of the WMATA property that serves as the railroad right-of-way. Under Section 6-103 of the Maryland Tax Property Article, the operating property of a railroad is subject to property tax.
Since the CSX property is subject to a property tax and does not have a tax-exempt status, owner consent is required to introduce the annexation resolution. City staff reached out to the appropriate CSX staff and was able to obtain a consent letter that states that CSX will not object to the City of Rockville’s proposed annexation. The letter, included as Attachment 2, meets the State law requirement that the municipality’s legislative body obtain consent from the owners of at least 25% of the assessed valuation of the real property in the area to be annexed. Since the CSX property under consideration is a railroad right-of-way, there are no residents in the area to be annexed, whose consent may be required for an annexation per the State Law.
Both the WMATA and the CSX properties are within the City’s adopted MEL and meet the contiguity and adjacency requirements.
Five Year Zoning Rule
Under Section 4-416 (b) of the LG Article, the following may not be permitted by a City for five years following an annexation without express approval of the County Council:
• Uses substantially different than allowed by the County’s Zoning Ordinance at the time of annexation.
• A density that is higher than an additional 50% of the allowable density as established in the County’s Zoning Ordinance at the time of the annexation.
Currently, the County’s zoning permits more density and heights by right that would be permissible by the City’s proposed MXTD zoning on the site. The MXTD zone supports mixed used development as proposed in the Montgomery County’s Shady Grove Master Plan and the County’s CR 2.25 C1.0 R1.75 H-200 Zone. Therefore, the County will not likely object to any change of uses and increased density based on Section 4-416 (b) of the LG Article. Per the State law, if the County governing body expresses an objection to an annexation, the city can still annex the property but cannot increase density as permitted by the County Zoning Ordinance for five years following the annexation. Since the proposed land uses and the City’s MXTD zoning is similar to what is currently permissible in the county, WMATA can proceed with development on the property after annexation without having to wait for five years.
Outreach with WMATA (property owner)
Staff had communicated the City’s interest in annexing the Shady Grove WMATA property with Steven Segerlin, Director of Real Estate and Station Area Planning at WMATA several times in the past and specifically at a staff meeting on April 5, 2023. Staff also notified Mr. Segerlin of the date when the Mayor and Council will be introducing the annexation. Mr. Segerlin noted that WMATA was aware of the City’s intent. Per its government relations policy, WMATA would not provide testimony either way on the annexation. Steven Segerlin is no longer with WMATA, and staff has since been communicating on the topic with Liz Price, Vice President of the Office of Real Estate and Development at WMATA.
In 2022, WMATA published a 10-Year Strategic Plan for Joint Development <https://www.wmata.com/business/real-estate/upload/WMATA-10-Year-Strategic-Plan-for-Joint-Development.pdf> that prioritizes stations based on their: (i) Market Readiness, (ii) Infrastructure Costs, and (iii) Development Potential. In that document, Shady Grove Metro Station is currently placed in Group 4 in WMATA’s strategic plan for joint development.
City staff recently corresponded with Ms. Price (December 17, 2024) with questions related to the property. City staff asked if there were any updates to the Strategic Plan and/or changes to the grouping. Ms. Price responded by noting that the Office of Real Estate & Development is in the process of drafting a Strategic Plan status update. As part of this process, some Metro stations may move up or down a category based on a number of factors including market readiness, policy guidelines, and available resources. As of right now, Metro does not plan to adjust Shady Grove’s category. However, like with other stations in the City of Rockville (Twinbrook and Rockville), strong support of the local jurisdiction is instrumental in addressing feasibility challenges and advancing joint development planning and future development solicitations.
Staff asked if WMATA was currently in the process for conducting studies to determine the potential for development at Shady Grove. In response, Ms. Price told us that Metro conducted a Joint Development Feasibility Study for the Shady Grove Metro Station in 2021. The purpose of the study was to evaluate market readiness, development potential, transit needs, environmental conditions, and site layouts. The study ultimately concluded that the site is not currently feasible to develop given the high cost of replacement transit facilities and other infrastructure. There are no imminent further studies planned at this station.
Staff also asked if WMATA had received any interest for potential development either on the west or the east side of the Shady Grove Metro Station. In response, we were informed that in Summer 2024, a private entity expressed interest in possibly developing the east side of the Metro station for a cricket stadium combined with a mixed-use development. The stadium would require demolition of an existing Metro garage and building a new garage which are cost prohibitive. Metro is also required to competitively bid for most land dispositions, with very few exceptions, which were not met by the cricket stadium proposal.
Staff will continue to coordinate with WMATA staff as this proposed annexation process moves forward.
DISCUSSION:
In accordance with the City Zoning Ordinance, the next step in the annexation process is for the Planning Commission to prepare the State-required Annexation Plan, as a recommendation to the Mayor and Council for its adoption. This report and the discussion on February 26, 2024, begins the Planning Commission portion of this process.
The Annexation Plan and the Planning Commission’s Role
To complete an annexation, the Mayor and Council will be required to adopt the resolution to expand the corporate boundaries. In advance of that adoption, the Mayor and Council must adopt an Annexation Plan, as required by the State of Maryland under Local Government (LG) Article, Section 4-415 of the Annotated Code of Maryland. The Annexation Plan must demonstrate that annexation would be consistent with the Municipal Growth Element of the local government’s Comprehensive Plan. Attachment 3 is an excerpt from the Maryland code that provides requirements relevant to the Annexation Plan.
Rockville's Zoning Ordinance Section 25.02.04 defines the role of the Planning Commission with respect to annexation. Per Section 25.02.04.c.1, the Planning Commission is required to prepare a Preliminary Annexation Plan, hold a public hearing, and then approve an Annexation Plan for recommendation to the Mayor and Council. Per Section 25.02.04.e, the Mayor and Council will then adopt the Annexation Plan as part of its portion of the process to complete the annexation. Attachment 4 is an excerpt from the City’s Zoning Ordinance, showing these provisions.
Thus, the role of the Planning Commission is to provide an Annexation Plan to the Mayor and Council that evaluates the following:
• Whether the Annexation Plan complies with the Municipal Growth Element of the Comprehensive Master Plan;
• The Planning Commission’s recommended zoning; and
• Whether the property proposed for annexation will be served, in general, by the necessary public facilities.
The draft Preliminary Annexation Plan in Attachment 5 outlines the discussion for the Planning Commission.
PUBLIC OUTREACH:
Staff recommends that the Planning Commission schedule the public hearing on the annexation on March 26, 2025. The Mayor and Council will hold its public hearing, tentatively scheduled for July 7, 2025, after adopting the annexation plan.
The public hearings with both the Planning Commission and the Mayor and Council have strict requirements, and staff will ensure that all requirements are followed. For the Planning Commission public hearing, the Rockville Zoning Ordinance requires that the public hearing be advertised in a newspaper of general publication at least fifteen days before the Public Hearing.
In addition to meeting the requirements, staff will use Rockville’s various means of communication to ensure that residents and businesses, including community organizations and nearby property owners, are notified of the proposed annexation and upcoming public hearings.
The Planning Commission will review the comments it receives at the public hearing and during the period when the record is open, and approve the annexation plan with recommendations, if any. The Planning Commission will then transmit the Annexation Plan to the Mayor and Council to be adopted.
After adoption of the Planning Commission approved annexation plan, the Mayor and Council will set a public hearing date. The City Clerk and Director of Council Operations must then transmit copies of the annexation plan to the applicable state, county and regional agencies for the Mayor and Council public hearing. Per the State of Maryland Local Government Article, the City Clerk will advertise the public hearing twice in a newspaper of general circulation.
BOARDS AND COMMISSIONS:
The Mayor and Council introduced the resolution for annexation at their meeting on October 23, 2023.
RECOMMENDATION:
Staff recommends that the Planning Commission review the preliminary annexation plan, including the proposed zoning for the property and set a public hearing date of March 26, 2025.
Annexation of the property presents some of the following potential benefits to the City:
• The annexation provides an opportunity for the city to develop any future mixed-use development consistent with the City’s Comprehensive Plan vision and principles, including additional affordable housing. Currently, the County and City both own streets in and around the WMATA properties. The fragmented ownership often creates conflicts and makes it difficult for the City to enforce its regulations, since the road code, adequacy, and development standards differ from the County to the City.
• Any tax revenue that will be generated by future new development will add to the city’s tax base.
• Adjacent properties to the Shady Grove Metro Station located in the County, are currently developed with low-density single-use development and could benefit from future redevelopment. Once WMATA annexation is complete, the adjacent property owners can be encouraged to annex and incrementally redevelop within the City, resulting in a new mixed-use development pattern and an improved road and pedestrian circulation, and improving the City’s tax base.
• There are non-measurable advantages to consider as well. Annexation of the WMATA Shady Grove Metro station property will significantly improve Rockville’s branding for economic development and enhance Rockville’s prestige as being the only municipality with three metro stations (Twinbrook, Rockville and Shady Grove) within the City limits on WMATA’s red line.
A potential disadvantage of annexing the WMATA property is that development does not take place in the near term, and no revenue is generated since the WMATA properties are in the tax-exempt category. There is also the added cost to the City to provide services to the property, including additional police officers to provide services, once annexed.
NEXT STEPS:
The Land Use Article requires that the municipality prepare and adopt an annexation plan for the area to be annexed. In accordance with the provisions of City Code § 25.02.04, the Planning Commission is required to study the area proposed for annexation and prepare an annexation plan. The purpose of the annexation plan is for the municipality that is proposing to annex an area to affirm that the annexation is consistent with the municipal growth element of the municipality’s comprehensive plan. The city code also requires that the Planning Commission hold a public hearing on a draft of the Annexation Plan.
The annexation plan must be adopted by the jurisdiction in advance of completing the actual annexation.
After the Mayor and Council Public Hearing on the adopted annexation plan and the proposed annexation, the Council may choose to adopt the resolution for annexation. Per §4-407 of the Local Government Article, the annexation resolution does not take effect until at least 45 days after its enactment.
The following proposed schedule lists the review and adoption process for annexation and is consistent with the applicable State law and City Code.
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Actions (ANX2023-00147) |
Proposed Dates |
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Planning Commission studies area proposed for annexation, reviews preliminary Annexation Plan and sets public hearing date. |
February 26, 2025 |
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Planning Commission holds public hearing. Planning Commission reviews public hearing testimony and approves the staff recommended Annexation Plan for transmittal to Mayor and Council. |
March 26, 2025 |
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Mayor and Council holds a Worksession with presentation from NextGen consultants on the Fiscal Impact Analysis. Mayor and Council adopts Annexation Plan. Mayor and Council sets public hearing date. |
April 28, 2025 |
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County Review of Zoning Consistency. |
May-June 2025 |
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Mayor and Council hold annexation public hearing. Mayor and Council adopt the annexation resolution. Mayor and Council introduce the Ordinance(s) to amend zoning map to include annexed property. Adoption of Ordinance(s) to amend the zoning map to include annexed property (if they waive the layover period) |
July 7, 2025 |
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Annexation effective 45 days after enactment of annexation resolution. |
August, 2025 |