The minority development partnership that has co-headed the $1.8 billion redevelopment in East Baltimore has been barred from doing business in Maryland by the State Department of Assessments and Taxation because of unpaid taxes.
Baltimore City Circuit Court records show that four of the seven members of the Presidential Partners-New East Baltimore Partnership LLC — Ronald H. Lipscomb, Dean S. Harrison, Owen M. Tonkins III and Brian D. Morris — owe a total of $809,582.68 in state and federal taxes.
Those delinquent taxes have resulted in personal and business liens imposed by the Comptroller of Maryland and the Internal Revenue Service beginning in April 2010, records show.
The partners owe a total of $188,256.87 in back taxes to the state, records show. Consequently, the partnership’s Maryland charter was revoked by the Department of Assessments and Taxation on Oct. 1, 2010.
Despite the revocation, the seven members of Presidential Partners-New East Baltimore Partnership LLC are still active under a different name — Forest City-New East Baltimore Partnership LLC — which was formed March 26, 2004 and is overseeing construction of a 20-story, $60 million graduate student housing complex at the 88-acre redevelopment site in East Baltimore.
Forest City Enterprises Inc., a national developer based in Cleveland, is working with East Baltimore Development Inc., a nonprofit, and the Johns Hopkins University on the nation’s largest redevelopment project, north of Johns Hopkins Hospital.
Robert E. Young, acting deputy director of the State Department of Assessments and Taxation, said it is legal for Forest City-New East Baltimore Partnership LLC to operate because it is a separate entity in good standing. The Presidential Partners are allowed to function under that name even though the group’s charter is revoked under the name for delinquent taxes, he said.
However, Presidential Partners-New East Baltimore Partnership LLC would be guilty of a misdemeanor and subject to a $500 fine if it attempted to do business while in forfeiture, he said.
“It’s a function of how you hold yourself out to the public,” Young said, of the LLC’s name, “the written and oral representations that you make under a certain name.”
Joseph H. Shapiro, spokesman for Maryland Comptroller Peter Franchot, said he could not comment on specific tax cases, and he declined to comment directly on Presidential Partners-New East Baltimore Partnership LLC.
However, Shapiro said the comptroller’s office routinely refers delinquent tax cases to the State Department Assessments and Taxation “to pull the LLC” of individuals or companies in default as one way to collect delinquent taxes.
“That is one of the tools we use,” he said. “We would go after every single thing we could.”
Harrison, president and CEO of Harrison Development LLC, and his wife, Vernice, owe $136,082.61 in state taxes, according to a lien filed April 21, 2010.
In addition to the delinquent state taxes, three of the seven members of the partnership — Lipscomb, Tonkins and Morris — owe a total of $621,325.81 in federal taxes, according to IRS liens filed with the land records office in city circuit court.
James Dupree, a spokesman for the IRS in Maryland, said he could not comment on specific outstanding tax liens.
Scott Levitan, senior vice president for Forest City-New East Baltimore Partnership, said Wednesday he did not know about the charter forfeiture or the back taxes owed by some members of Presidential Partners-New East Baltimore Partnership LLC.
“I am unaware of that,” Levitan said. “I don’t have any comment.”
Lipscomb would not be available for comment, his attorney, Gerard P. Martin, said Wednesday.
“He doesn’t speak to the press,” Martin said, adding that Lipscomb is working out his unpaid-tax issues with the state and the IRS.
“I know there’s a number of back taxes out there,” Martin said. “He has been negotiating with the state … he’s in the process of straightening it out.”
Messages left at work and home for Tonkins were not returned Wednesday.
An attempt to reach Morris through Scott Horner, the press representative for ESmith Legacy group, was unsuccessful.
Attempts to reach Harrison for comment were also unsuccessful. The two phone listings for Harrison’s business in Baltimore were “not in service” and the voice mail on his cell phone was full.
Presidential Partners was formed in 2002 and is a joint equity partner with Forest City, master developer of the EBDI project, according to Anthony Ambridge, one of the Presidential Partners.
Some in the partnership have had controversial dealings in other business ventures in the past.
Lipscomb, owner of defunct Doracon Contracting Inc., owes the most in federal taxes, $599,598.43, according to court documents from July, November and December of 2010. He also owes $52,174.26 in state taxes, according to liens placed in April and October 2010.
Lipscomb filed for Chapter 7 bankruptcy protection on Feb. 16 and agreed to liquidate his company’s assets to pay more than $200,000 owed to three creditors who forced the bankruptcy suit. Doracon, once a politically influential local development company, is now listed by the State Department Assessments and Taxation as “forfeited,” and the company’s headquarters in the 3500 block of East Biddle Street is closed.
Doracon’s charter was revoked on Oct. 3, 2008, according to state records. Lipscomb has remained a minority partner in the East Baltimore redevelopment project, his attorney said Wednesday. Martin added he was uncertain of Lipscomb’s current status in the partnership.
Ambridge said Wednesday that Lipscomb is “active” in the partnership’s ongoing business. Seconds later, Ambridge became hesitant to discuss Lipscomb’s involvement any further.
Lipscomb was linked romantically to then-Mayor Sheila A. Dixon during her corruption trial in 2009. The pair had dated while Dixon was president of the City Council. Lipscomb was scheduled to be a star witness in her trial but was never called to testify by the Maryland State Prosecutor’s office.
In June 2009, Lipscomb pleaded guilty to violating state campaign finance laws. He was fined $25,000 and given a suspended sentence a year after he entered his guilty plea.
Lipscomb is also facing non-tax liens, including a $5.4 million lien from Columbia Bank of America filed Aug. 27, 2009 and a $4 million lien from Wilmington Trust FSB filed April 29, 2010, according to Baltimore City Circuit Court records.
Morris, former chairman of the Baltimore City Board of School Commissioners, was forced to resign as head of operations for the school system shortly after he accepted that job in 2009. His resignation came after it was reported that he had been sued several times for bad debts, including unpaid taxes, over a 15-year period. The lawsuits involved his personal finances and business dealings, according to reports in The Baltimore Sun.
Today, Morris is co-founder and president of ESmith Legacy, a development firm with offices in Baltimore, Dallas and Philadelphia. His partner in that venture is Emmitt Smith, an NFL Hall of Fame running back and former All-American at the University of Florida.
Baltimore City Circuit Court records show Morris owes the IRS $10,133.38 in unpaid federal taxes, according to a lien placed on July 14, 2010.
Tonkins is president of ART Enterprises LLC, a local development company. Court records show he owes the IRS $11,594, according to a lien placed on Nov. 3, 2010.
The other members of Presidential Partners, who have no outstanding liens, are Dan Wilkinson, CEO of The Wilkinson Group LLC in Vienna, Va., Kenneth Banks, president of Banks Contracting Co. Inc., and Ambridge, principal of Lambda Development.
Ambridge, a former City Council member and partner with Lipscomb in Lambda, said the Presidential Partners-New East Baltimore Partnership LLC members have not met for “several months” and now correspond through phone calls and e-mails.
Ambridge said he was unaware that the partnership’s charter had been revoked at the request of the state comptroller’s office.
“That’s news to me,” Ambridge said.
He told The Daily Record last month that the partnership has struggled financially over the past few years.
“We’re working out our difficulties,” he said then, describing problems the group has faced as “cash call issues.”
Ambridge said Forest City had not offered loan guarantees to Presidential Partners-New East Baltimore Partnership LLC to help secure funding for projects at the EBDI site.
When asked about the future of the partnership then, Ambridge declined to comment.
“I am not at liberty to discuss that,” he said.