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C. Fraser Smith: State Center smackdown

It’s called the State Center project. It’s a TOD. These monikers make it vaguely bureaucratic in keeping with its state government origins.

So it may not be on the radar screen of anyone you know.

Unless, that is, you’re a principal in what could turn into a headline-grabbing day in court for the people who do care about it.

Among these are Gov. Martin O’Malley, Orioles principal owner Peter Angelos, businesses fretting about a failing downtown Baltimore, developers and, of course, lawyers for both sides.

What it is is a $1.5 billion plan to redo the complex of state office buildings adjacent to the northernmost reaches of Martin Luther King Jr. Boulevard and the light rail line on Howard Street.

New offices, private retail space and some residential development is planned — along with an attempt to make sense of what is regarded as an underused confluence of transportation systems — hence the aforementioned TOD, or Transit-Oriented Development.

Opponents — speaking unofficially for Angelos, who has a stake in the wellbeing of downtown — say there are 2 million square feet of vacant office space in a disturbingly declining city center.

Angelos’ representatives call it a scandal, a project running forward without due process and greased for someone (they don’t say who) at the expense of the taxpayers. They’ve gone to court to stop it.

Dark allusions

Proponents say the lawsuit is totally without merit. They call it an anti-competitive ploy.

“It’s not competitive with them but they perceive it as competitive,” says Christopher Patusky, the Maryland Department of Transportation’s lead administrator on the project. He says the state will be sensitive to the impact of moving any offices to the new center.

The opponents, represented in the lawsuit by Alan M. Rifkin, say the project has violated the state’s procurement rules from start to finish. The process, they say, has been far less than transparent. They make dark allusions to procurement scandals of the past — much to the unhappiness of Governor O’Malley.

Patusky says the intimations and allegations are scurrilous and false. He says the Board of Public Works approved the project five times at various stages. And there were 25 briefings.

The opponents maintain in their suit that the State Center development combine was formed illegally. When it had to be reconfigured for financial reasons, a new team of developers was put in place without the required competitive bidding, the suit alleges.

Patusky says the replacement developers were chosen, as provided by law, upon the recommendation of the departing developers, who had the right to sell part of their investment to other developers. The state then did its analysis of the new parties and found them acceptable, Patusky says.

The opponents argue as well that the state has gone too far in making the project attractive, offering overly generous incentives on rental prices, on the financing of a parking garage and exempting new lessees from various expenses.

Also not so, Patusky says.

“It’s not a sweetheart deal,” he says, offering a translation of the charge.

Philosophical differences?

Finally, the opponents refer to a finding by auditors at the Department of Legislative Services, a highly regarded team of analysts who often look at projects of this sort. They found the state’s involvement ill-advised and predicted it would have a deleterious effect on businesses in the center city.

The report is dismissed in some quarters as the result of philosophical differences.

The issues raised by this project are common in consideration of public-private partnerships.

Some observers will conclude the state or city or town has been taken advantage of by developers. Government will disagree or insist at the same time that a public purpose has been served, justifying the expense.

“The benefits are enormous,” says Patusky. A desperately needed new office building will go up. A neighborhood will be renewed. An underused transportation system will coalesce.

The damage to the process, say the opponents, is also enormous. If the state fails to follow its own procedures, money will be wasted and favors granted to the undeserving and politically connected.

Now it’s for the courts to decide. Proceedings are scheduled to begin May 9.

C. Fraser Smith is senior news analyst at WYPR-FM. His column appears Fridays in The Daily Record. His e-mail address is fsmith@wypr.org.