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The Department of Natural Resources has nixed a plan to build a three-story home on the edge of the Sullivan's Cove marsh, but the would-be developers want to make a federal case out of it.

Citing likelydamage the project would cause to the Severn's "only significant tidal brackish water marsh," the DNR's Coastal Zone Consistency Unit filed its objection to the construction Sept. 13. Only one environmentalagency needs to object to block construction in the Chesapeake Bay critical areas, said Charles Wheeler, DNR's Director of Wetlands Programs.

But co-developer Joseph Rushton said yesterday that he will appeal for protection of his property rights to the National Oceanic and Atmospheric Administration. The NOAA regulates wetlands and is overseen by U.S. Secretary of Commerce Robert Mosbacher. It is the only agency that can overturn the DNR decision.

"This is a case where a state bureaucracy has targeted a little guy. We are exploring all legal options," said Rushton.

He and Francis L. Codd have applied to theArmy Corps of Engineers for permission to build a three-story house on 8-foot piles75 feet from the banks of Sullivan's Cove.

Opponents of the construction, which would have filled 1,100 feet of non-tidal wetlands, had been rejoicing all week -- until they heard about theappeal. The process could take years to resolve, Rushton said.

"You just burst my bubble with this news about the appeal, but we've been celebrating our defense of the marsh at Severn," said Jim Hoage, ahistory teacher who led a spirited drive among Severn School students in opposition of the development.

More than 200 students signed a petition in May, criticizing the project and the grandfather clausein the county's critical areas laws that allows development in subdivisions laid down before the legislation went into effect.

The students cried foul, saying the project endangered American black ducks,marsh wrens, Virginia and Sara rails and swamp and seaside sparrows.

But now, it's Rushton's turn to cry. He says "at least one personat DNR was prejudiced" and predisposed to rejecting his house project. He also said the department missed a federally mandated deadline for filing its objections.

If he can't get the federal government to reverse the decision,Rushton said, he will sue the state to reimburse him for the value of the property, which he estimates at $250,000.

Wheeler said he was not aware of anyone in his office who was prejudiced. He said the decision to block development was made to preserve a special "Habitat Protection Area."

Patricia Pudelkewicz, the DNR's Chief of Critical Areas Program Implementation, said grandfathered building lots such as Rushton and Codd's are exempt from criticalareas legislation but are "definitely" not exempt from Habitat Protection Area laws.

"These are the most critical resources that we have and we try extra hard to protect them," she said.

About one-third of the 30-acre Sullivan's Cove marsh is owned by the county and preserved as a natural area.

In addition to the birds, several "botanically noteworthy" plants are located in the marsh, including one ofthe Chesapeake's only stands of Atlantic white cedar, the DNR reportsaid.

"Run-off and sedimentation from construction could impinge upon the marshlands quality and jeopardize the scenic and wildlife values of the area," the report said.

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