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State Center opponents score a major victory

Opponents of the State Center project in Bolton Hill scored a major victory today when a judge voided the development agreements between the state and a private developer.

Baltimore City Circuit Court Judge Althea M. Handy ruled that the process by which the developer was chosen in 2009 was not competitive and therefore violated state procurement laws.

While resting on rather narrow legal arguments, today’s decision has major negative implications for the long-stalled plan to turn the aging State Center on West Preston Street into a “transit-oriented development” with 1.1 million square feet of office space, more than a half million square feet of retail, and 3,200 new residences.

Hatched in 2005 by then-Gov. Bob Ehrlich, the project was vigorously pursued by Gov. Martin O’Malley and Mayor Stephanie Rawlings-Blake. It spurred an equally vigorous backlash from landlord and business interests who said the project would siphon business from the downtown and depend on subsidies, including $80 million in tax increment financing (TIF). A group of businessmen filed a lawsuit in December 2010 to block the development, claiming the state violated procurement laws.

Judge Handy agreed with the plaintiffs, writing in today’s decision, “The Court finds . . . that Defendants [state of Maryland] did not comply with the procedures required in the code, therefore, the Master Development Agreement, the First Amendment to the Master Development Agreement, and the Ground Leases are void.”

The judge also ordered the state to pay the plaintiffs’ court costs.

Original Developers Dropped Out

The Master Development Agreement placed the project in the hands of State Center LLC, a group headed by Caroline G. Moore, who had been a top lieutenant at Struever Bros. Eccles & Rouse.

The Struever group was designated to be the original developer but ran into financial troubles and transferred its ownership to Moore’s company.

The other developer was Doracon Development, whose owner, Ronald Lipscomb, dropped out of the project after he became ensnarled in a corruption investigation that led to the conviction and resignation of Mayor Sheila Dixon in 2010.

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  • MarylandEsquire

    This is the second major victory in the last couple of months in favor of the party that challenged the State for failing to follow the procurement procedures.  The other matter is at the Maryland State Board of Contract Appeals and involves the inmate pharmacy contract, which was discussed at the last Board of Public Works meeting.

  • richard chambers

    This is probably for the best. The project was always a boondoggle. A better idea would be for the state to invest its time and resources in restoring and rejuvenating some of the historic commercial structures in the downtown core. Why not have state agencies in the grand old Bank of America skyscraper at 10 Light Street? Or maybe apartments in the fine art deco tower at 301 North Charles Street? There are plenty of underutilized or empty historic buildings downtown that could be renovated for far less than what the State Center redevelopment would cost taxpayers.

  • ushanellore

    Judge Handy gave a handy slap to the corrupt procurement practice and handily did the plaintiffs win a crowing victory over nepotism, an entrenched condition in Baltimore.

  • PatBoltonHill

    As a Bolton Hill home owner, I consider this a major victory.  Let’s hope it stays dead.

  • Gerald Neily

    Richard, I totally agree with you, except the two historic downtown buildings you cite are far too good for state government. State Center is often reflexively and derisively described as “aging” and “50s era”, but most of State Center was built in the late 60s and 70s, and it is only the corrosive impact of government that has led to its deterioration. They’d trash the irreplaceable old deco masterpiece at Ten Light Street too.

    The state should occupy buildings that no one else can or will, perhaps the huge Metro West complex at the end of the “Highway to Nowhere” that the Social Security Administration is getting ready to abandon. State Center also suits them fine just the way it is. Let them keep hyping it as “Transit Oriented Development”. They’ve never even bothered to get crosswalks painted from the Howard Street light rail station to the sidewalk leading to the subway entrance.

    • Barnadine_the_Pirate

      I’m curious about the “corrosive impact of government” on the buildings it occupies.  Any actual data to show that government offices are worse tenants than private companies?

      Given the government’s reflexive impulse to do everything on the cheap, it would not surprise me if maintenance got short shrift in government offices; we get the government we pay for, after all.  But is there any actual data to support this?

      (I also wonder at the effects on morale and productivity of (a) sticking government employees in sh|tty buildings and (b) repeatedly telling them they don’t deserve nicer spaces, amenities, training budgets, raises, their salaries, or their pensions.)

      • Gerald Neily

        Bernadine, I think you get the idea. It’s probably all those things. Like a public school system that has been allowed to get so run down that it needs $2.6B worth of renovation. The private sector would fold its tent rather than ever let it get to that point. The WOW factor still seems to mean something in the private sector, which is a reason Exelon wanted to be in a “statement” building at Harbor Point. No data, just observation.

  • http://twitter.com/jedweeks Jed Weeks

    I’d love for traffic calming and real development around State Center. This project probably wasn’t it though. Anyway, to Richard–both of those buildings are being renovated into apartments.

    http://articles.baltimoresun.com/2012-12-03/business/bs-re-10-light-street-to-be-converted-to-apartments-20121203_1_light-street-transamerica-tower-apartments

    http://www.bizjournals.com/baltimore/news/2012/11/13/pmc-closes-on-301-n-charles-purchase.html?page=all

  • http://profiles.google.com/jamiehunt344 James Hunt

    Gerald Neily wrote: ” … The state should occupy buildings that no one else can or will, perhaps the huge Metro West complex at the end of the “Highway to Nowhere” that the Social Security Administration is getting ready to abandon.  State Center also suits them fine just the way it is … ”
     
    ++++++++++++++++++++++++++++++++++++++++++
     
    Most of the buildings in State Center are, physically, pretty crapped out. It’s time to adopt the BaltiMorphosis plan (http://www.baltimorphosis.com) for the Franklin-Mulberry corridor and move the state offices there. Level State Center and focus on connecting Bolton Hill and Mt. Vernon with residential and retail.
     
     

  • Gerald Neily

    Copy that, James. The theme now is “Downtown as a neighborhood”. That should include “neighborhoods as neighborhoods”, like at State Center. The immediate giveaway that the plan was a boondoggle physically (not just fiscally, politically and legally) was that the first phase was supposed to be a large costly underground parking garage. Underground parking should be a red flag anywhere in Baltimore. Its an immediate sign they’re overvaluating the land to create an illusion of “Transit Oriented Development”. Of course, similar illusions are now commonly created using development as a thin veneer around huge parking garages, as in the nearby Fitzgerald. But at least its much cheaper that way, and more clever than just baring the parking garage to the streets as in the even-closer Symphony Center, which demonstrates how TOD has already been a major failure in the State Center area.

    Oh and thanks, James, for your plug of http://www.Baltimorphosis.com . The Social Security Complex component of that plan can be seen with a link to a Brew article on my blog at http://baltimoreinnerspace.blogspot.com/2011/04/franklin-mulberry-gateway.html

  • krrush

    I think it’s a pity. The State Center area is an eyesore, much of the space is wasted, and the intersections near MLK are extremely dangerous to pedestrians, to name but some of the issues that the redevelopment team had plans to address. Many residents (myself included) spent a lot of time in meetings with the planners and with people from nearby communities–all for nothing, it turns out. What I remember from these meetings is that many people from Bolton Hill worried about the plans for affordable housing and feared low-end retail. All those class issues are hidden now under other justifications to oppose the plan.

    Regarding the current tenants: unlike the private sector, the public sector can’t simply “fold their tent,” and they can’t simply work the market to make the money they would need to afford lovely offices. If you want the state to maintain their buildings better, shouldn’t you be proposing higher taxes so they can actually afford to do so? 

  • cwals99

    People must notice that the only reason this deal was stopped was one developer sued against another developer.  It wasn’t the residents protests against the project, it wasn’t the public decrying the use of state property and taxpayer money, and it wasn’t the illegality of it that had our Attorney General protecting the public’s rights.

    It happened because one developer was about to lose money to another.  This is sickening and it has nothing to do with democracy.

  • Archphips

    Whoever thinks that sinking the State Center project is a great victory for downtown or for democracy is wrong. It is a victory of naysayers who believe in zero sum, don’t value public participation and don’t care that the current state of State Center is a sad weight around the neck of all surrounding communities.There just is no way to structure a complex public private partnership (P3) like this in a competitive bid process. The plus was that the communities negotiated the outcome they wanted. By contrast, a standard bid process gives affected communities much less a say in the program and design. 
    Nobody can claim that the current State Center is performing at a level that should be expected from a pivotal place like this. The whole point of the State Center project was to transform the area into an actual community with lots more activity and benefits for the city at large. The point of P3 is that it makes something possible where the government alone can’t do it and the private sector alone wouldn’t. Downtown isn’t one iota better off without a better State Center just as it wouldn’t be better off without Harbor East. Why would we repeat that whole Harbor East debate here after we have seen how good that development has been for Baltimore?

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