Please ensure Javascript is enabled for purposes of website accessibility

Ousted Baltimore Superblock developer goes to Md. high court

Superblock

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

The ousted developer of Baltimore’s proposed Superblock project has taken its lawsuit against the city all the way to Maryland’s highest court.

In a petition to the Court of Appeals, Lexington Square Partners LLC argues that Baltimore violated terms of the $152 million land disposition agreement by unilaterally terminating the contract while the developer was securing financing.

The developer’s argument has failed so far.

Two lower courts have sided with the city and held that the LDA clearly permitted Baltimore to terminate the agreement because Lexington had failed to secure financing, despite five prior extensions of the agreement to give the developer more time.

The Baltimore City Circuit Court and the Court of Special Appeals cited a provision of the LDA enabling the city to terminate the agreement if financing was not secured or if a settlement was not reached with Baltimore. The word “or” is unambiguous and “no linguistic or logical principle compels a contrary reading,” the intermediate Court of Special Appeals held in an unreported opinion last month.

Lexington Square, in its request for high-court review, said the lower courts erroneously “analyzed a single, one-sentence contract provision” and did not consider the entire agreement. A review of the full contract reveals that Baltimore could not unilaterally terminate the LDA so long as Lexington Square was showing satisfactory evidence of its ability to secure financing, the developer has argued though its attorneys.

This evidence consists of the $65 million in financing Lexington Square had lined up by June 2013, when the city terminated the contract, the attorneys from Saul Ewing LLP in Baltimore have argued.

Lexington Square filed the petition last week, requesting that the high court hear its appeal. Baltimore has not yet filed its response.

The city and Lexington Square entered into the LDA in 2007, intending for the developer 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. The agreement had been extended five times since 2007 when city officials in June 2013 denied Lexington Square’s request for another.

Baltimore Mayor Stephanie Rawlings-Blake said then that the city was unwilling to grant the Atlanta- and New York-based partnership a sixth extension 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,” Rawlings-Blake said in June 2013.

Lexington Square filed suit in September 2013 alleging the city breached the contract. The developer sought $57 million in damages.

In its petition for high-court review, Lexington Square’s attorneys briefly abandoned their legal argument to take aim at Baltimore’s leaders.

“This improper attempt by the city to walk away from its contractual obligations to [Lexington Square] … is an anathema to public confidence in doing business with the city and the ability of responsible development partners to rely upon the city’s contractual commitments,” wrote the attorneys, Charles O. Monk II, Jason M. St. John and Robin D. Leone.

Lexington Square “and others seeking to do business with the city must be able to enforce the city’s contractual commitments; without assurance that contracts will be honored, there is no incentive for businesses to choose to contract with, and invest in, the city of Baltimore — particularly at such a pivotal time when the city desperately needs to attract the business community to invest in Baltimore,” the attorneys added in the petition filed Thursday.

The case is Lexington Square Partners LLC v. The Mayor and City Council of Baltimore et al., No. 221 September Term 2015.