Poppleton developer sues to keep project

Listen to this article

The developer chosen in 2006 to redevelop a large chunk of the Poppleton neighborhood is suing the city of Baltimore, saying officials have misstated the project’s status, stymied the group’s financing efforts and now seek to boot it from the project.

Poppleton Development I LLC filed for a temporary restraining order on Wednesday in U.S. District Court to stop the city from removing it from the project, to take effect on Monday.

The company was chosen to create a mixed-use housing and retail development, including a U.S. Tennis Association training center, in the blighted West Baltimore neighborhood that is home to the Edgar Allan Poe House.

“There is a laundry list of things the city did not do that it was supposed to do,” said Charles S. Fax, with Rifkin, Livingston, Levitan & Silver LLC in Bethesda. “We want to perform the contract and move forward with the project and we’re seeking authorization to proceed and not have the city default us.”

On Thursday, Judge Richard D. Bennett scheduled a hearing for July 13 and barred the removal for default in the meantime.

The city declared Poppleton Development in default on May 2 for failing to obtain adequate financing for the estimated $135 million needed for the first phase.

The developer countered in the lawsuit that it had secured funding from multiple vendors, including a $74.8 million loan proposal from Wells Fargo & Co.

Poppleton Development also alleges that the city has not lived up to its end of the deal by acquiring all the property it said it would and by actively working against the developer’s efforts to secure funding.

The agreement called for the city to acquire all the property for Phase I by July 2007. The notice of default says all properties were acquired in July 2010, but the developer disputes that.

“Even now… contrary to its bald representations upon which its unlawful notice of default ostensibly rests, Phase I has not been fully acquired by the City,” the complaint says.

For its part, the city maintains that Poppleton dragged its feet in getting the project off the ground over the last six years and was not ready to buy the properties from the city.

“I’m sure they would have liked us to just snap our fingers and acquire everything through quick takes, but that’s not the real world,” Baltimore City Solicitor George A. Nilson said Thursday. “The reality is that once the properties were acquired, the developer could have proceeded to close on Phase I and they were not able to.”

Nilson said the city gave the developers an extension and, after determining that the company was not in a position to move forward, decided to declare a default under the land disposition and development agreement.

“I think their initial argument has been that the recession has made it tough to secure financing,” Nilson said. “But, it’s been six years and they’re still not in a position to close on the first phase.”

The neighborhood has suffered from vacant properties and crime for years but has seen resurgent interest with the development of the adjacent University of Maryland BioPark research complex. Poppleton Development, a subsidiary of New York-based La Cité Development, alleged it has retail interests lined up for the area including urban grocer Praxis Marketplace and Stern Holdings LLC, whose brands include TJ Maxx, Marshall’s and HomeGoods.

Poppleton Development said it also plans to create a public park across from the Edgar Allan Poe House, which was home to the author in the 1830s. The company also said it is set to partner with the Beijing-based Shuren-Ribet Private School program to create neighborhood charter school at the site of the current Francis M. Wood School.