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Judge dismisses State Center countersuit

A Baltimore City Circuit Court judge Friday dismissed a $100 million countersuit filed by the state Department of General Services against a group of plaintiffs suing to halt the mega State Center development based on charges that the state violated its own procurement laws in hiring the developer.

Judge Althea M. Handy ruled two days after heated arguments.

“The court order [Friday] dismissing the state’s counterclaim is entirely consistent with the First Amendment right to petition government without fear or threat of retribution,” said Alan M. Rifkin, attorney for the plaintiffs

Michael Gaines, assistant secretary for real estate for the Department of General Services, did not respond to a request to comment.

“Given the late release of today’s ruling, we will be discussing our next steps in the coming days,” said Alan Brody, spokesman for the attorney general’s office.

Rifkin argued Wednesday the state’s lawsuit was “basically as unconstitutional as any action the state can take” because it sought to silence those seeking to derail the State Center project and would have limited the ability of citizens to challenge the actions of the government.

“Plaintiffs and people in the future may believe the awesome power of the government may be turned on them as it has been turned on my clients,” he said, arguing the motion to dismiss the countersuit.

Lawyers for the state claimed the opponents of State Center were not protected by the First Amendment because they had fired the first salvo in the legal battle with a “sham” lawsuit.

“Just as you can’t yell fire in a crowded theater, you can’t come into a courtroom and yell ‘ultra vires state action’ to stop development,” said Campbell Killefer, deputy chief of the attorney general’s civil litigation division, using the Latin for “beyond powers.”

Although eventually unsuccessful, the state’s countersuit did succeed in peeling two plaintiffs off the legal challenge against State Center.

St. Paul Plaza Tower LLC — the owner of the building that houses the attorney general’s offices — and 301 Charles Street LLC dropped out in exchange for the state freeing them from the countersuit.

Campbell offered the same deal to others in the case on Wednesday, a move Rifkin criticized as a “hammer” to spook the rest of the plaintiffs.

“What it says is ‘We have the power in our hands,’” he said, lifting a clenched fist over his head. “’We have the hammer and we’re ready to throw it down on you unless you get out, and get out now.’”

The State Center project is a proposed $1.5 billion redevelopment that is expected to take up to 15 years to build out. It will replace the existing state office buildings along Martin Luther King Boulevard and add a complex of other office and retail space as well as new housing.

The business owners represented by Rifkin say they worry the 1.5-million-square-foot State Center development on West Preston Street would strip the downtown of its government worker base, furthering weakening the corporate office market and the restaurants, bars and other businesses that depend on it.

There is a nearly 25 percent vacancy rate in commercial and office space, about 2 million square feet, current data reveals.

State agencies lease about 700,000 square feet in center city.

Peter G. Angelos, owner of the Baltimore Orioles and a property owner in the central business district, is paying for much of the lawsuit, although he is not a plaintiff.

The plaintiffs include restaurant owners in Little Italy and about a dozen property owners.

They argue the state did not follow Maryland procurement rules in choosing a developer because the state did not issuing a request for proposals, or RFP.

Ekistics LLC is the master developer on the State Center project. Caroline Moore, CEO of Ekistics, also did not respond to a request to comment on Judge Handy’s ruling.

Daily Record Business Writer Nicholas Sohr contributed to this article.

One comment

  1. Thank goodness for the courts. With one party rule in Maryland the courts are our last line of defense against the spurious arguments that are used to justify these horrible deals like the State Center project. We taxpayers will invest heavily in a highly questionable $1.5 billion real estate project and commit to a longterm lease at sky high rents. Meanwhile the city’s center has ample space available to house many more people than the state requires, at reasonable rental rates.