After years of setbacks, and despite ongoing litigation, the state is moving forward with plans to tear down the 28-acre State Center office complex and redevelop the parcel near downtown Baltimore, Gov. Larry Hogan announced today.
The Maryland Stadium Authority and Maryland Department of General Services will issue a request for information and request for proposals for redeveloping the site simultaneously, Hogan said, to “expedite an agreement in order to achieve a bold, transformative” project.
The 3,300 state employees and 12 government agencies will relocate to other parts of the city in phases, Hogan said, with the Maryland Department and its 744 workers first to move.
It’s expected the state agencies will eventually lease 1 million square feet of office space in downtown, which the governor called “a dramatic boost to help stabilize” the city’s downtown business district.
A new project in place of aging State Center could also be an amenity, the governor said.
“The proximity of the State Center site to premiere institutions, including the University of Baltimore and MICA, and vibrant communities like Bolton Hill, as well as its accessibility to transit options, make this an ideal and attractive location for redevelopment and investment,” he said. “And we will work closely with the community and the city to ensure the redevelopment of this site addresses the priorities of the local citizens.”
Those features could include affordable housing, a grocery store and other retail.
Plans for transforming the complex have been discussed for more than a decade. Gov. Robert Ehrlich first proposed the idea, and Gov. Martin O’Malley reached an agreement in 2009 to have local developer Ekistics LLC take on a $1.5 billion mixed-use development with apartments, a grocery store, retail and government and commercial offices.
But the deal was met with resistance by a group of 15 business owners, led by lawyer Peter G. Angelos, who sued over a provision that guaranteed long-term, above-market leases with government agencies, arguing it did not follow the state’s competitive bidding requirements. While the lawsuit was eventually thrown out, it stalled the development for years.
In December 2016, the Board of Public Works, comprised of Hogan, Comptroller Peter Franchot and Treasurer Nancy K. Kopp, cancelled the leases with Ekistics and other developers, who operated as State Center, LLC, to find a new developer. Hogan called the plan “totally unworkable,” and said the lease terms were a bad deal for the state.
The Hogan administration preemptively sued the company in early 2017 to end the leases, and the firm countersued.
Speaking today, Hogan said he was told by Attorney General Brian Frosh it was OK to move forward with finding a new developer for the site. He called the original agreement “economically infeasible and legally improper” and said it sought “to extort state taxpayers.”
A representative with Hogan’s office shared the text of Frosh’s opinion with Baltimore Fishbowl. Given the attorney general’s understanding of the developer’s rights, “the State is free to solicit expressions of interest, move employees out of the buildings, and even raze the buildings with little risk of being enjoined from doing so. Although proceeding with redevelopment of the site would involve greater risk, we still believe it is likely that those proceedings would be resolved in our favor.”
Multiple developers came forward last year to express interest in taking on the project, the governor said.
Speaking to The Sun‘s Luke Broadwater, an attorney for State Center, LLC, said Hogan’s decision to move on with the project is illegal, and that the original developer still maintains exclusive contracts with the state.
There is almost an insatiable demand for moderately priced apartments in Baltimore, as the immediate leasing of the new Liberty Street apartments shows. I understand that not requiring parking saves 100,000 per unit, and allows rents to be kept down. The state land can be sold at a moderate price to a developer who will build moderately-priced apartments and neighborhood retail. The Perkins Homes can be demolished and the development extended to that area. There would be a large net gain in moderately priced units accessible to the subway, light rail, and Amtrak. I hope that teh state can come to a quick resolution of the legal issues and is already contacting developers with experience in moderately priced development.