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Study: State Center’s potential for new arena site ‘low’

Adam Bednar//Daily Record Business Writer//January 23, 2018

Study: State Center’s potential for new arena site ‘low’

By Adam Bednar

//Daily Record Business Writer

//January 23, 2018

State Center. (The Daily Record / Maximilian Franz)
State Center. (The Daily Record / Maximilian Franz)

ANNAPOLIS — A Maryland Stadium Authority study examining potential redevelopment possibilities for the State Center doesn’t find much potential for building an arena at the site.

The Baltimore State Center Site Alternative Land Use Study found the most likely uses of the roughly 28-acre site include a strip retail center between 5,000 and 9,000 square feet, fast-food establishments, low-rise office space and park land. Listed among the study’s low potential for use was a new arena, high-rise apartment and high-rise office space.

“This study has reinforced our long-held position that the State Center site has an enormous amount of potential for redevelopment,” Gov. Larry Hogan said in a statement. “With possibilities like retail and food services, schools, government offices, and housing, this site would have a transformational and lasting impact for Baltimore City and its citizens.”

Maryland and developer State Center LLC are currently locked in a legal battle over plans to develop the site. The developer proposed a much denser mixed-use development on the site centered on a grocery store at the Fifth Regiment Armory that connected with nearby Metro and Light Rail stops.

But in December 2016 the Board of Public Works voted to terminate the state’s leases for office space at the project. At the time, Comptroller Peter Franchot, who serves on the board, suggested the site may be suitable for a replacement for Baltimore’s aging Royal Farms Arena.

On Tuesday, during a joint hearing of the House of Delegate’s Appropriations and Economic Matters committees, Caroline Moore, the project’s lead developer, and Michael Edney, a partner at Norton Rose Fulbright, which represents State Center LLC, addressed the study released earlier in the day.

Both were critical of it as an attempt to stall development with a proposal that is years away when State Center LLC’s proposal is essentially shovel-ready. They also contended that their experience in dealing with the state shows Hogan’s catch phrase that the state is “open for business” is nothing but an empty slogan.

“It’s a collection of options that, frankly, we could sit at the bar and draw up on the back of a cocktail napkin,” Edney said of the study.

Republicans on the committees pushed back against the developer’s assertion the Hogan administration walked away from a good deal and punished a private business. They argued there were concerns about the terms of the agreement and the expense to taxpayers prior to Hogan’s election. They also argued the developer attacked Hogan, a Republican, but spared Franchot and Treasurer Nancy Kopp, both Democrats on the Board of Public Works who voted to nix the leases.

When the Board of Public Works terminated the leases in December 2016 it essentially killed the development as proposed by State Center LLC. Critics of the projects argue the agreements amounted to capital leases that required approval from the Maryland General Assembly. The project’s detractors also said that, as capital leases, they would breach the state debt limit and endanger its top bond rating.

The Hogan administration then sued the developer in an effort to have various other agreements nullified. State Center LLC responded and sued the state seeking damages. According to the developer it has already invested $26 million in trying to bring the project to fruition. The case is still in the discovery process in Baltimore City Circuit Court.

Efforts to overhaul the State Center site in the Madison Park neighborhood date back to the administration of Gov. Robert L. Ehrlich Jr. After a prolonged legal challenge to the state’s procurement process the Maryland Court of Appeals ruled in 2014 in favor of the state and developer.

Following the election of Hogan, the developer and the state began to have disagreements about how to proceed with the project. The two sides entered into mediation in 2016 but were unable to reach an agreement.


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