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To Cheryl Lewis and lots of her neighbors in this Eastern Shore town, the developer’s proposal sounded like the proverbial offer they couldn’t refuse.

Trappe, a cluster of about 450 houses alongside busy U.S. 50, could welcome a 900-acre planned community of perhaps 2,000 new houses and a host of commercial properties. Or the town could stand pat, watching as tourist and real estate dollars keep flowing into well-heeled Easton and St. Michaels, or into up-and-coming Cambridge.

“If we had the wealth and the waterfront of some of these other places, I don’t think we would be talking about growth,” says Lewis, the Trappe commission president. But development, she says, “is the key to our survival as a town.”

Small towns across the Shore are embracing growth as developers mark off big parcels of flat farmland, some far from the beaches that have long drawn newcomers to the region.

“This is growth that doesn’t threaten our sense of place,” says Mayor Russell Brinsfield. “We need about 1,000 people to sustain a pharmacy, a grocery, another restaurant. We are poised to handle growth we knew was coming to Vienna, growth that people here see as an improvement to the quality of life.”

Conservationists and others worry that large-scale developments could change the nature of these small communities, ushering in a wave of national retailers, worsening traffic congestion and increasing environmental pressure on the Chesapeake Bay and its tributaries.

“The scale of it all is so out of control it can’t rightly be called Smart Growth,” says Thomas T. Alspach, an Easton attorney who heads the Talbot Preservation Alliance. “The development community has very cleverly attached itself to Smart Growth, but people seem to be ignoring the issue of scale in these small towns.”

Analysts who track trends on the still-largely rural Delmarva Peninsula say that pushing development near municipalities is consistent with the Smart Growth land-preservation model that has guided the state’s planning in recent years. The approach will help stave off the loss of more farmland and other open space, supporters say.

“In a weird way, this makes sense from a Smart Growth perspective,” says Memo S. Diriker, an economist who heads the Business Economic and Community Outreach Network at Salisbury University.

Such growth is also inevitable, in his view. “Anyone who thinks something can be done to reverse these trends is just naive at best,” he says.

Developers, including some of the nation’s largest builders, have begun forming partnerships with local companies, hoping that annexations will provide ready land for projects that might keep them in work for 15 to 20 years.

George Maurer, senior planner for the Chesapeake Bay Foundation, says Smart Growth provides a blueprint for development heading for the Shore. But he cautions that growth could come with sacrifices.

“It does seem like the model, but Smart Growth can be a double-edged sword,” Maurer says. “What people fear is that they’ll wind up with both high-density growth in town and still get low-density sprawl out in the rural areas. The growth has to happen in a way that’s compatible with the towns.”

Development, municipal leaders say, is largely being fueled by increasing numbers of young retirees and those who are buying second homes in hopes of retiring on the Shore.

In Crisfield, Maryland’s southernmost town, officials are calling their community the next big thing in the waterfront retirement or second-home market.

“Clearly, we’re attracting more early retirees, Baby Boom-era people. And right now, 420 units are in the works,” says John K. Phoebus, an attorney with an office near the waterfront. “We’re lucky in that everybody seems to be in love with all of it. We’re replacing decrepit industrial-type properties with upscale residential.”

Princess Anne, home of the University of Maryland Eastern Shore, has been experiencing a different kind of boom. Although the town has seen its share of retirees, developers are rapidly gobbling up land on the outskirts for more modest homes for younger residents.

Along with attracting first-time home buyers with houses selling for less than $130,000, Princess Anne is courting commercial projects along the new UMES Boulevard and is seeing new businesses in its long-depressed downtown. The town, many say, is fast becoming a bedroom community for Salisbury, 15 miles to the north.

The trick, Princess Anne officials say, is making sure that revenue keeps up with demand for services.

“Our tax base has been growing, and we’re able to have a really professional town staff,” says Town Commissioner Frank White. “We’ve got a police force with starting salary and take-home cars that are drawing people from larger police departments in the area. I think we have four people in the department with graduate degrees. It just seems that everything is coming together right now for people who want to live in a small town like ours.”

Easton developer Robert Rauch, who heads the partnership in Trappe, is also building a 1,500-acre community in Bridgeville, Del., and looking at a huge parcel outside Denton. A veteran of bitter battles with slow-growth advocates in Easton, he has little patience for those he calls “the anti’s” — environmentalists and others who are urging caution in Trappe and elsewhere.

Rauch says the company’s projects are aimed at an expanding group of “active adults,” aging baby boomers who are eschewing Sun Belt retirement destinations in favor of living close to their families and their old neighborhoods in the Baltimore-Washington area.

“For years, the mantra has been `Smart Growth,’ and that’s what we’re trying to do,” says Rauch.

Alspach, the lawyer who heads the preservation alliance, wonders whether Trappe and other small towns will reap the benefits of public infrastructure improvements and other amenities promised by developers. He says towns could quickly be dwarfed by the development local officials have sought.

Richard Clinch, an economist at the University of Baltimore, says the surge of development is unlikely to subside, at least for the next 10 to 20 years.

“There are issues with retirees, with a decline in available land on the Western Shore, with Salisbury becoming more of an employment center for the Lower Eastern Shore and with more families willing to live in the northern part of the Shore and commute,” Clinch says. “I don’t see any reversal of these factors. Real estate is a limited resource, and that’s what the Eastern Shore has.”