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The Superblock, as seen from the Catholic Relief building on Lexington Street. (Maximilian Franz/The Daily Record)

Appellate court weighs ousted Superblock developer’s lawsuit against Baltimore

ANNAPOLIS — Lexington Square Partners LLC had $65 million in financing lined up to redevelop Baltimore’s Superblock and was ready to move forward with the project when the city illegally pulled out of its contract nearly two years ago, a lawyer for the ousted developer argued before an appellate panel last week.

City officials could not move forward prior to a June 30, 2013 deadline because it still did not have title on one of the prospective properties, Jason St. John said Friday in the Court of Special Appeals. The contract’s termination provision, he added, could not be enacted unilaterally by the city.

“Lexington Square Partners has the right to extend the agreement if the city can’t meet its obligations,” said St. John, a partner at Saul Ewing LLP in Baltimore. “The undisputed record is the city did not meet its obligation.”

Lexington Square is seeking to prevent the city from requesting new bids on the West Side project. A Baltimore City Circuit Court judge ruled last year the agreement had terminated because the two sides had not reached a settlement nor had conditions of the settlement been met.

Assistant City Solicitor Michael Redmond reiterated his argument from the trial court that the contract’s language was unambiguous and that Lexington Square was attempting to use “tricky wordplay” to derive its own interpretation.

“The contract says nothing about voiding termination,” Redmond said. “It doesn’t matter whose fault it is — the settlement did not occur.”

The city and Lexington Square entered a land development agreement in 2007 for a $150 million redevelopment. The agreement had been extended five times since 2007 but city officials denied Lexington Square’s request in 2013 for a sixth extension in order to line up financing.

Lexington Square had proposed a mixed-use project with apartments, retail, hotel and office space for the parcel, bounded by Lexington, Fayette and Howard streets and Park Avenue.

The project has been stymied from the beginning by the real estate market, lack of financing and lawsuits and protests over its history and design.

Lexington Square filed suit in September 2013 alleging the city breached the contract and must pay $57 million in damages as provided under the agreement and in compensation for lost revenue. Lexington Square also has a $50 million claim against Baltimore Development Corp., the city’s co-defendant, for tortious interference with the developer’s contract with the city.

The appellate judges asked St. John why Lexington Square didn’t attempt to reach a settlement.

“Say, ‘Here’s my money now,'” said Judge Michele D. Hotten. “Then you have certain remedies.”

“We couldn’t get to the settlement table because the city wasn’t ready,” St. John said.

“Why do you care about that?” Hotten replied. “That’s on them. What did you do to be ready, willing and able?”

St. John said Lexington Square sent a letter to the city saying it was prepared to settle, to no avail.

Redmond, in response to questioning, added the city cannot issue a new request for proposals for the Superblock until the case is decided.

The judges did not say when they would issue their ruling in the case, Lexington Square Partners LLC vs. Mayor and City Council of Baltimore City et al., No. 00724, Sept. 2014 Term.