Mayor: Superblock rights to be rebid this fall

Exclusive development rights for the city-owned Superblock property will be rebid in the fall, Mayor Stephanie Rawlings-Blake said Wednesday.

The decision comes after the city told Atlanta- and New York-based developers who proposed a $150 million redevelopment project that they would not get a sixth extension of time to obtain the financing needed to start the first phase.

“Ultimately, they fell short in meeting the conditions that were necessary to close on the project,” the mayor said of the developers, Lexington Square Partners.

“Next month, we’re going to determine what the (request for proposals) will look like,” Rawlings-Blake said. “It could be smaller. It’s too early to tell.”

Baltimore Development Corp., the city’s development arm, will examine market conditions and “meet with other stake holders,” the mayor added, in determining the future of a redevelopment where the city’s once-bustling downtown shopping hub once stood.

This week, the BDC officially informed Lexington Square Partners that it would not recommend granting the latest request for more time. Without the extension, the group has until June 30 to obtain financing to move forward on plans for the mixed-use project that includes apartments, retail, office and hotel space.

“At this point, we did not recommend to the mayor [to grant] the requested extension because it was not clear the financing plan was where folks wanted it to be,” Brenda McKenzie, the BDC’s president and CEO, said on Tuesday. “They would likely need more than the additional six months.”

Lexington Square Partners for years has pushed forward on plans to transform the vacant four-acre parcel at Lexington, Fayette and Howard streets and Park Avenue into a mega mixed-use development with apartments, retail, hotel and office space.

But plans for the center-city development hit constant snags, including the recession and a series of lawsuits that were resolved in April 2012.

Six months ago, the Baltimore City Council approved a $22.1 million payment in lieu of taxes (PILOT) development incentive to Lexington Square Partners in order to help it obtain a $100 million construction loan and other financing.

At the same time, the developers were granted their fifth extension, for six months, which expires next week. The developers have said they needed the additional time to line up financing.

Even so, the developers have not been able to obtain about $68 million in financing for the first phase of the project, to include retail, residential and parking, McKenzie said.

In December 2012, city officials agreed to sell the vacant, nearly four-acre parcel to Lexington Square Partners for $2.8 million and a unique, 20 percent share in future profits if financing was obtained.

During the PILOT debate last fall, developer Harold Dawson Jr. told the City Council he planned to begin the project this year.

Under a PILOT, the city substitutes annual real estate taxes due on a property for an established period of time with a negotiated payment. In the Superblock’s case, the time period is 20 years.