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Hogan proposes sports arena study for State Center in Baltimore

Gov. Larry Hogan speaks Wednesday. (The Daily Record / Bryan P. Sears)

Gov. Larry Hogan envisions an overhaul of the long-sought $1.5 billion State Center project that could bring a new arena to Baltimore. (The Daily Record / Bryan P. Sears)

ANNAPOLIS — A long-anticipated $1.5 billion plan to redevelop an aging Baltimore state government office complex will be nixed in favor of a proposal that could bring a new sports arena to the city.

Gov. Larry Hogan said he was directing the Maryland Stadium Authority to fast-track a study that would include a potential new arena. The Hogan-led Board of Public Works then unanimously voted to rescind more than a half-dozen lease agreements with State Center LLC, effectively killing the mixed-use office complex development.

“The city leaders are as eager as I am and you are to move forward on a new path,” Hogan said. “We will work very closely with the city. We’ll get community input from stakeholders and we will put together the best planning and development expertise available to design a new plan that does make sense. I am also going to immediately direct the Maryland Stadium Authority to do a fast track to review all of the potential uses of the State Center site. Mr. Comptroller, we will also ask them to consider the option of a professional sports arena.”

Hogan made the announcement moments after Comptroller Peter Franchot urged the governor to consider the site for a possible new sports facility.

Hogan, who called the previous State Center proposal flawed and failed, said he remains “totally committed to developing something truly great at State Center.”

“I’ve had conversations with Mayor (Catherine) Pugh and City Council President Jack Young about finally making the redevelopment of this property a priority and finally taking action to move us forward,” Hogan said, adding that he planned to work with both to “develop a new plan that is in the best interests of the city. One that will be a centerpiece in the revitalization and transformation of Baltimore City.”

“Taking this action today will allow us to break the logjam and allow us to move forward as expeditiously as possible,” Hogan said of the three-person board’s  unanimous vote. Treasurer Nancy Kopp along with Franchot and Hogan make up the board.

Stalemate over project

The board’s action came after months of confidential mediation between the state and the developer of the 28-acre site reached a stalemate.

Franchot said the site, with its access to the subway and set at the edge of economically challenged west Baltimore, could bring stable, good-paying jobs to the area and be a cornerstone for revitalizing that area of the city.

“I would be remiss, governor and madam treasurer, if I didn’t again once again beat the drum for the possibility of an arena that would house a professional basketball team and professional hockey team,” Franchot said.

Franchot compared the project to the Verizon Center in D.C. and said such a facility would lead to more economic development.

“We see the explosion of private-sector redevelopment in Washington as a result of Nationals Park and Verizon Center. These were once neighborhoods that had long been neglected and are now thriving with these stadiums and their immediate proximity to Metro,” Franchot said. “And we know it works in Baltimore with Camden Yards and M&T Bank Stadium. An anchor like that could be a similar game changer for the community around State Center.”

Earlier this year, the State Center developer and state government officials agreed to a 30-day cooling-off period in which neither would take action, according to Michael J. Edney, an attorney for D.C.-based Norton Rose Fulbright, which is representing developer State Center LLC.

That agreement was set to expire in early January. Edney said the board’s decision today violated that agreement.

Prior to the board’s meeting, Pugh said she spoke with Hogan this morning. The governor told her that he’s been working with the developer to make the project happen for the past two years and that the economics of the proposed project are not working, she said. Pugh added that she has not spoken with the developer about its side of the dispute.

Pugh said any decision regarding the future of the State Center development is “out of our hands.” The bottom line, Pugh said, is that there needs to be development that serves the surrounding communities, and she’s ready to work with Hogan to make that happen.

“I’m interested in how we move a project forward in this area, and we need to get something done in my time period,” Pugh said.

For years, many city political and business leaders have urged a larger arena be built in the city, arguing that the 55-year-old Royal Farms Arena, which seats about 11,500 for sporting events, cannot handle major entertainment attractions or lure professional sports franchises. How to pay for such a project and where it should go invariably elicits a debate.

State Center history

Various incarnations of the State Center project date to 2009 and were approved under then Gov. Martin O’Malley.

But Hogan and others have raised concerns about the cost of the mixed-use, transit oriented development to the state and its potential effect on the state’s debt ceiling.

Additionally, a 928-space underground parking garage was reduced to a 580-space facility, “barely adequate to cover the state requirement for 550 spaces,” according to documents prepared for the Board of Public Works.

“These material changes would significantly impact the financing of the garage and the project from the state’s perspective, likely rendering the garage not economically viable as previously authorized,” the documents further state.

Edney and other representatives for the developer were denied a chance to speak to the board. Hogan said it was because the developer “threatened litigation.”

Following the meeting, Edney almost guaranteed a lawsuit, saying it would be filed in early January.

“What this underscores it the really outrageous nature of what was attempted to be accomplished today,” Edney said. “This was an agenda item that was publicly noticed late (Tuesday) afternoon — the first time that any of us or any member of the public had ever heard of it.”

“It’s the kind of dark-of-night regulatory move that I don’t think is becoming of a mature democracy,” Edney. “They can expect, should expect to see in court papers a claim about due process and the implications of refusing to hear from anybody who has a $26 million investment in this.”

Edney said that while the board has killed the leases, the master agreement, which grants State Center LLC the exclusive right to redevelop the property for the next decade, remains in place.

“By refusing to deal with us, the governor is consigning that 28-acre plot to total inaction over the course of that period,” Edney said, adding that his client will hold the redevelopment up for 10 years.

“I’m not here to look pretty. I’m a courtroom lawyer,” Edney said. “That’s our plan and that’s what we’re going to do.”

Adam Bednar contributed to this story.

 


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