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Officials urge use of condemnation for Red Line

ANNAPOLIS — Two members of the state’s Board of Public Works called on transportation officials to begin using eminent domain to acquire properties needed for the Red Line and possibly other projects.

State Treasurer Nancy K. Kopp and Comptroller Peter V.R. Franchot urged the use of condemnation during a discussion of the $550,000 purchase price of a Baltimore City property owned by a developer Mark Sapperstein. The sale price was more than twice than that of two independent appraisals.

“Have you ever given any thought of using condemnation as a cautionary example?” Kopp asked state Transportation Sec. James T. Smith Jr.

The property at 114 East Lombard St. is needed for a ventilation shaft that will be part of the proposed $2.9 billion Red Line rail project running from east Baltimore to western Baltimore County, according to Smith.

Smith said Sapperstein originally wanted four times the appraised price for the property that is bookended by the Brookshire Hotel and commercial properties. Two independent appraisers valued the property at $240,000. The purchase price was approved by the Federal Transit Administration, which will cover 80 precent of the cost.

Other transportation officials said Sapperstein is underwater on his mortgage on the property. Negotiations with the bank that could have led  to a short sale were unsuccessful.

“What’s the point of having an appraisal?” Franchot asked. “Why don’t we just go to these landowners and say, ‘What would you be willing to take?’ The fact that (the mortgage) is underwater doesn’t concern me at all.”

Smith said that it is not uncommon to encounter difficulties with purchasing properties for projects especially from savvy developers.

“This is really not an unusual situation with government condemnation,” Smith said. “When they know government wants or needs a particular property, it’s a challenge to negotiate something they will sell for. If you do that you have to go through the condemnation, which is fine, but then you have the issue of time and you also have the issue of you really don’t know what the cost is going to be.”

Smith said the agency has considered using condemnation, which can add a year or more to the acquisition process.

Ultimately, the board voted 2-1 to approve the sale with Kopp saying she was a reluctant vote in favor. Franchot was the lone dissenting vote.

Sapperstein is a well-known developer who has donated thousands of dollars to Maryland candidates, including Gov. Martin J. O’Malley, Howard County Executive Ken Ulman, Baltimore Mayor Stephanie Rawlings-Blake and to Smith when he served two terms as Baltimore County executive, according to state campaign finance records.

O’Malley, who voted in favor of the sale, defended the sale price.

“Were that property to be developed to its highest and best use, it would be more valuable than $550,000,” he said, adding that transportation officials also had to consider the need to move forward with the project and the potential of scaring off other prospective buyers if the department decided to use eminent domain.

Kopp and Franchot said condemnation might help bring a better price for the state. Franchot said that the cost of litigating condemnation would fall equally on the property owner as it does the government.

“I think the public would be a little upset if here we are putting in public infrastructure and we’re being held up by demands for prohibitive costs from property owners who know darn well the property is not worth what we’re paying for it,” Franchot said.

“All I’m saying is, I kind of agree with (Kopp),” Franchot said. “Why don’t we start litigating on theses things cause it’s not just expensive for us it’s pretty gosh darn expensive for the other side?… Let’s start flexing our muscles.”