Poppleton lawsuit settles

The long-stalled redevelopment of Baltimore’s Poppleton neighborhood could soon be moving forward, thanks to the settlement of litigation between the city and the developer it chose back in 2006.

A joint stipulation of dismissal was filed last week by Poppleton Development I LLC and the city after the Baltimore Board of Estimates approved an amended development agreement at its regular meeting on April 3.

The lawsuit, filed last June in U.S. District Court in Baltimore, alleged that city officials misrepresented the status of the 13.8-acre project, stymied the developer’s attempts to get financing and sought to prevent it from completing the project.

“It’s a win for the populace of Baltimore, and an incredible vision for the West Side,” the developer’s attorney, Charles S. Fax of Rifkin, Livingston, Levitan & Silver LLC in Baltimore, said Friday.

City Solicitor George A. Nilson said it took roughly four months for the parties to reach the amended development agreement, which he called appropriate and pragmatic.

“It was relatively complicated and involved,” Nilson said Friday. “The agreement was rewritten and revised to give certainty to the developer to explain what it must do to proceed with the development, and gave specific assurances to the city that, if the developer is unable to fulfill its promises, the agreement would terminate and we would be free to move on to another developer.”

The revised agreement calls for about 1,650 housing units, of which 20 percent, or about 330, are to be affordable housing. About one-third of the affordable units are to be rentals.

Judge Thomas Ward, co-founder of the Irish Railroad Workers Museum in Poppleton, said Friday he was not pleased with the revised plans.

“It will result in another huge monstrous public housing unit,” said Ward, who also served as a member of the City Council in 1963. “The company, which is based in New York City, does not have knowledge of the city of Baltimore.”

Poppleton Development I, a subsidiary of New York-based La Cité Development, was chosen to create a mixed-use housing and retail development, including a U.S. Tennis Association training center, in the West Baltimore neighborhood that includes the Edgar Allan Poe House. The site is also adjacent to the University of Maryland BioPark research complex.

“Although only minutes from downtown, the Poppleton neighborhood … [had], as recently as 2008, open-air drug markets flourishing twenty-four hours a day and one of the highest overall crime rates in Baltimore,” the developer said in its lawsuit.

The developer alleged that, between 2006 and 2012, it spent more than $7.5 million of its own money to perform its obligations under the agreement, but the city “dragged its feet from the outset, failing to meet many of its obligations on time, and in some instances failing to meet them altogether.”

The original agreement required the city to acquire all the property for Phase I by July 2007. The city issued a notice of default to the developer on May 2, 2012. The notice said the city had acquired all the properties in July 2010, and that Poppleton Development was in default of the land disposition and development agreement because it had failed to obtain adequate financing.

The developer denied both claims in its lawsuit.

“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,” it said.

Judge Richard D. Bennett granted Poppleton Development’s request for a preliminary injunction last July.

Bennett found the developer was likely to prevail on its claim that the city had breached the original agreement by, among other things, issuing a premature notice that it had acquired the subject properties, failing to timely clear all buildings and structures as required under the agreement, and failing to acquire all properties in Phase I before requiring that the developer close on Phase I.

The parties then entered settlement talks, leading to last week’s dismissal.

POPPLETON DEVELOPMENT I LLC V. THE MAYOR AND CITY COUNCIL OF BALTIMORE, ET AL.

Court:

U.S. District Court, Baltimore

Case No.:

1:12-cv-01904-RDB

Judge:

Richard D. Bennett

Outcome:

Lawsuit dismissed after the city and developer agreed to a revised development agreement

Dates:

Suit filed: June 27, 2012.

Preliminary injunction issued: July 13, 2012.

Settlement approved by Board of Estimates: April 3, 2013.

Joint stipulation for dismissal with prejudice filed: April 8, 2013

Plaintiff’s attorneys:

Charles S. Fax, Scott A. Livingston and Liesel Schopler, Rifkin, Livingston, Levitan & Silver, LLC in Bethesda.

Defendants’ attorneys:

George A. Nilson, Steven J. Potter and Matthew Naden, Baltimore City Law Department.

Counts:

Breach of contract, declaratory judgment and preliminary and permanent injunction.