Normandie Farm owner Cary Prokos has spent nearly two years working to get county approval for a zoning change that will let him build a banquet hall on his restaurant property.
He met with community leaders to hear concerns about lighting and parking and withdrew the application earlier this year to make changes that address those concerns. He expects the final application will win county approval next month, allowing him to expand his business by hosting larger events like banquets and wedding receptions.
Operating a restaurant means complying with strict zoning regulations, liquor control laws and food service standards. Prokos believes he's played by the rules. So it makes him angry that one of his competitors doesn't have to.
Prokos has contacted county leaders and federal legislators to complain about the William F. Bolger Center at the corner of Democracy Boulevard and Newbridge Drive, a United States Postal Service training facility that has opened its food and lodging services to the general public.
"They have come out competing and making their own rules," Prokos said. "These guys have blatant and reckless disregard for all of our laws. They're just doing whatever they want to do there. They need to cease all operations open to the general public immediately. That's my position."
Because the Bolger Center sits on federal land, its operations aren't subject to state and county regulations. That was OK when it was carrying out its stated purpose as a training and conference center for postal employees, Prokos said.
But when the center expanded its operations to draw in business from the general public — it hosts wedding and bar mitzvah receptions, Sunday tea service and other special events open to the public — Prokos said it became an unfair competitor to Montgomery County restaurant owners.
"This is not Russia. I don't believe that things like this happen in the United States. I don't believe that United States government condones a quasi-agency going into a community and not respecting their laws," he said.
Prokos has contacted county officials, U.S. Rep. Chris Van Hollen (D-8th), and U.S. Senators Paul Sarbanes (D) and Barbara Mikulski (D) to call for an investigation, and his inquires have started to generate a response. Last month, the State Department of Assessments and Taxation struck the center's tax-exempt status and the county mailed it a property tax bill for $1.35 million. The number reflects county and state taxes based on an assessment of $27.5 million for the current year and three back years, during which the tax agency argues it has operated for profit. "The county and our agency, we agreed that their taxing status should be changed. They are categorized as a for-profit," said Dan Ercolani, the state's acting supervisor of assessments for Montgomery County. "I have not heard from them since we did that."
"WE'RE CONCERNED," said Scott Reilly, assistant chief administrative officer for Montgomery County. "We don't inspect the kitchens, we haven't licensed them for liquor, [and] we haven't approved a commercial use in the residential zone." The County Executive's office has contacted the County Attorney, Department of Permitting Services, Health Department and other county agencies to chart out a response, Reilly said.
Prokos argues that because it isn't subject to local regulations, Bolger operates on "an uneven playing field." "The United States Postal Service has no business in the business of bar mitzvahs and weddings and hotels," he said. "If they want to generate more revenue, they need to sell more commemorative stamps." But the Postal Service's prerogative to generate revenue through the Bolger Center isn't a clear-cut issue.
Under the Postal Service Reorganization Act of 1970, the Postal Service is a quasi-governmental agency with a Congressional mandate to be revenue-neutral: operating for neither profit nor loss. Under the Act, it lost its status as a federal department and became a corporation with an official monopoly on mail delivery in the United States.
The act does not mention hosting bar mitzvah receptions, but in response to a Nov. 2, 2004 letter from Van Hollen, Postal Service Government Relations Representative Rebecca Sumner cited Title 39 of U.S. Code which gives the Postal Service authority to "hold maintain, less, lease, or otherwise dispose of 'property' and to provide services in connection therewith."
THAT LANGUAGE may be broad, but according to the Postal Service's own 2004 Comprehensive Statement on Postal Operations, it "generates income from real estate assets by maximizing the value of Postal Service property through its highest and best use."
What is clear is that the center is now operating with an eye to public use. In February 2004, the Postal Service brought in a new food and hospitality contractor, Dolce International, to manage the property. Dolce has marketed the center's bar, guest bedrooms, Sunday tea service and special events through advertising in local magazines and newspapers, including the Almanac.
General public customers can reserve hotel rooms through the center's Web site and the rooms also come up on popular travel search engines. Dolce officials said that its public operations are nothing new. Its predecessor, Aramark Corp., also hosted outside events, they said, but Reilly, the county administrator, told a different story.
"The Dolce operation kind of surprised us a little," he said. "They did not make any contact with our Department of Permitting Services. We found out about it when they started advertising."
Dolce representatives stressed that in nearly two years of operation at the site they had not had a single request from the county or complaint from the community until Prokos began his campaign.
"We have had wonderful warm responses from absolutely every single person except him," said Michael Quinn, Dolce's director of sales and marketing at the center. Quinn said that the majority of the center's business is postal-related but that the Postal Service does not have meetings on weekends, so "the Postal Service as a good neighbor has allowed people to use the facility."
According to the 2004 postal operations statement, the Bolger Center "generated almost $6.7 million in revenue in 2004 from non-Postal Service customers." About 17,000 of the center's 38,000 visitors in 2004 — 43 percent — were non-Postal Service customers.
But Paul Dolce, Dolce International's general manager for the Bolger Center, said that those outside customers are not detracting from Prokos' business. "We don't do the same type of events that he does," Dolce said. "We're e a completely different kind of place."
In fact, both Dolce and Quinn said that their company reached out to Prokos to offer him an informal trade agreement. Out-of-town guests to Normandie Farm banquets could stay at the Bolger hotel and Dolce would recommend Normandie Farm to conference attendees who wanted to eat off-site.
"It really was a friendly, neighborly type of deal," Dolce said.
STILL, PROKOS has set off what could turn into a legal fight. He has called on the Maryland Restaurant Association, a trade group, to advocate for him. "If they want to open to the public, fine, but they should have to follow the same local rules and regulations as another restaurant in the area," said Melvin Thompson, the Restaurant Association's vice president for government relations. "No one's trying to close them down." Thompson said that the Association is not currently considering a lawsuit, but does hope to call a meeting including county, state and federal representatives.
County and state officials have so far approached the issue cautiously, not wanting to set off a firefight with the feds that they would likely lose. "While I think this idea of leveling the playing field is something I support and I think makes sense, as a purely legal matter I think — [this] to some extent remain unresolved," said Del. Brian Feldman (D-15), whose district includes the Bolger Center. "The federal government does have the upper hand."
Feldman said that the delicate interplay between federal facilities and local jurisdictions is hardly a new issue. "We've had some issues in Annapolis with the Naval Academy. The ability of states to tax a federal facility is a legal issue. I know that it's come up in other contexts," he said.
But while states and counties have long interacted with federal tenants — the Naval Surface Warfare Center in Potomac and Navy Medical Center in Bethesda are among numerous federal properties in Montgomery County — the Bolger Center's for-profit operation does present unique, and perhaps unprecedented, questions. "I don't think it's ever been tested," said Thompson, a former Congressional staffer. "This could be a bigger deal than people think. This could be the test case of what happens in a situation like this."