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This Sept. 3, 2013 file photo shows the Superblock corridor along West Lexington Street in Baltimore. (The Daily Record/Maximilian Franz)

Superblock lawsuit hearing set for May

Ousted developer for $150M project wants damages

The next round of Superblock legal jousting is scheduled to begin next month as other projects on downtown Baltimore’s West Side continue to gain momentum.

On May 1, the Court of Special Appeals is scheduled to consider an appeal by ousted Superblock developer, Lexington Square Partners LLC. The developer is trying to block new bids on the West Side project and is seeking damages from the city for alleged breach of contract. Jason M. St. John, vice chair and partner in Saul Ewing’s Litigation Department, is representing the developer, and he said his clients still want to develop the project.

“We believe the city wrongfully terminated the contract and we want to perform the contract we agreed to,” St. John said.

In 2007, Lexington Square Partners and the city entered into an a development agreement for $150 million and originally proposed building a mixed-use project with apartments, retail, hotel and office space on the property bounded by Lexington, Fayette and Howard streets and Park Avenue. The first phase of the project was expected to cost about $68 million.

But the developer required several extensions on the agreement as it struggled to find financing and to deal with lawsuits regarding the history of the site and the project’s design. But the city declined to grant a sixth extension to the developers nearly two years ago, triggering the ongoing legal fight. Lexington Square Partners are now seeking $57 million in damages from the city for allegedly breaching contract and $50 million from the Baltimore Development Corp. for tortious interference with the developer’s contract with the city.

Baltimore City Circuit Court Judge Pamela J. White ruled last May that the land development agreement between the city and Lexington Square Partners was terminated because the parties had not reached a settlement nor had conditions of the settlement been met. If the Court of Special Appeals rules against the developers, they could appeal the decision to the Court of Appeals, who would have the final review.

Last year, when it was announced that the Lexington Square Partners was appealing White’s decision, Mayor Stephanie Rawlings-Blake expressed frustration with the ongoing legal entanglements holding up development of the property. The project has long been considered a major part of the city’s efforts to try and breathe new life into that often-maligned portion of downtown.

“There are too many projects that will lead to good jobs and the development of our community not to get them going,” Rawlings-Blake said last June. “So, my hope is that the project on the Superblock will move forward.”

As the legal wrangling over the future of the Superblock continues other projects on the West Side have started to gain momentum.

Architecture firm Murphy & Dittenhafer recently released a new vision for redevelopment of 20 properties on a 2.5-acre site in the Market Center District. That redevelopment plan calls for a mix of redevelopment and new building on the nearby block bounded by North Howard, West Franklin and Mulberry streets and Park Avenue. The Baltimore Development Corp. is expected to release a Request for Proposals seeking developers to move ahead with the redevelopment in the next few months.

The city is also reviewing proposals for the rehabilitation and consolidation of operations at the nearby historic Lexington Market. Overhauling the market, which would include improvements like making vendor stands more accessible, are expected to cost about $26.7 million.

Daily Record legal reporter Danny Jacobs contributed to this story.