Political leaders said the steep settlement payment the Board of Public Works authorized Wednesday to the former developer of the abandoned State Center redevelopment project in Baltimore is a worthwhile investment and an opportunity to protect the state from potentially greater damages.
The board, consisting of Gov. Wes Moore (D), State Comptroller Brooke Lierman (D) and state Treasurer Dereck Davis (D), voted unanimously to pay $58.5 million to State Center LLC, ending a complicated and years-long dispute over the fate of the 25-acre state-owned office complex in Midtown Baltimore.
Officials described the settlement as a chance to take a fresh approach to redeveloping the strategically located property and putting to rest a controversy over a stalled project that has vexed four governors.
“This was not simple,” Moore said. “This has been a long-term challenge. I’m excited about what it’s going to mean for the future of Baltimore City. I’m excited about what it’s going to mean for state residents. I’m excited about what it’s going to mean for Maryland.”
The payment — with $40 million to be delivered to the developer next month and another $18.5 million to be doled out by July 1, 2025 — will settle all claims from a 2016 lawsuit against the Board of Public Works (BPW) and several state agencies. The suit was filed when then-Gov. Larry Hogan (R) in 2016 announced the state would go to court to terminate the proposed $1.5 billion redevelopment project. State Center LLC then counter-sued.
The redevelopment plan had been floated and debated since 2005, during the administration of then-Gov. Bob Ehrlich (R), and the BPW first approved the project in 2009, under Gov. Martin O’Malley (D). State Center, which runs parallel to Martin Luther King Jr. Boulevard through the spine of the city, consists of five ugly high-rise office buildings built in the middle of the last century that housed several state agencies.
Addressing the BPW by video Wednesday, Attorney General Anthony Brown (D) said the state could have been on the hook for more than $200 million in damages if the developers’ case against the government had gone to trial — due in part to “changed circumstances” from recent court decisions on other property disputes.
“This is really a risk-benefit assessment, as are all settlements, of course,” Lierman said. “This could be a much, much higher number if we were to litigate and potentially lose — even partially lose.”
Lierman also took a swipe at Hogan, saying “the high-dollar amount [of the settlement] illustrates the wrong-headedness of the previous administration’s approach.”
Davis, the state treasurer, who routinely asks sharp questions about proposed state settlement payments, said he had no hesitation supporting this one, in part because of the state’s potential legal exposure.
“I think I’ve been a pain about most settlements, but in this case, I’m in favor of what’s been done here,” he said.
Mostly, though, officials sought to emphasize how the settlement now frees the city and state to begin shaping a new vision for the parcel, which Lierman, a Baltimore City resident, repeatedly called “prime real estate,” near academic institutions, cultural centers, medical facilities and residential neighborhoods.
Moore said several state and city agencies will begin meeting regularly, to come up with a plan for the property. Hogan originally envisioned turning the land over to the city government, but that transfer was halted by the litigation. Even so, city officials have hired a planning consulting firm to help them develop a mixed-use plan for the land.
“Today is simply just not about a legal matter,” Marvin James, chief of staff to Baltimore Mayor Brandon Scott (D), told the BPW members. “Today is about your commitment to investing in Baltimore City.”
Due to the decaying conditions at the State Center buildings and the expectation that the property would eventually be redeveloped, at least 3,300 state workers have already been moved to offices in downtown Baltimore over the past three years. Fewer than 5,000 government employees remain, spread out over seven state agencies, though they, too, will eventually relocate.
Earlier this month, four State Center office buildings were closed for a few days, and workers told to telework, after elevated levels of legionella, a highly contagious strain of pneumonia, were found in one of the buildings, WBAL-TV reported.
