Baltimore eyes combining State Center, McCulloh Homes redevelopment

Future redevelopment of State Center may include overhauling the nearby McCulloh Homes public housing.

Michael Braverman, director of Baltimore’s Department of Housing and Community Development, said the city is keen to package the redevelopments. Combining the nearby projects allows spreading the density of low-income units across the public housing site and the 28-acre state office complex property.

Michael Braverman, director of the Baltimore Department of Housing and Community Development, said the city is interested in combining McCulloh Homes and State Center redevelopment. (File photo)

Braverman mentioned the potential to link the projects during a Baltimore Development Corp. board meeting on Thursday. After the meeting he declined to discuss details but confirmed the city is “interested” in joining the redevelopments.

Merging the projects requires Maryland to agree to such an arrangement. A spokeswoman for Gov. Larry Hogan’s administration said they will contemplate including the McCulloh overhaul as part of a future State Center redevelopment.

“No decision has been made regarding developers or other partners for the redevelopment of State Center, but the Mayor’s office has raised the potential of (McCulloh) Homes being involved and it is something we will continue to discuss,” according to a statement from the spokeswoman. “We’re still in the Expression of Interest (EOI) phase and have been very pleased with the robust response, which includes eight potential developers.”

But the state can’t move forward with the redeveloping State Center, according to the statement,  until the former developers State Center LLC “finally end their legal machinations and accept our offer to settle so we can get this important project done.”

The McCulloh Homes, according to the Housing Authority of Baltimore City, includes 970 units of low-income housing. The property is bordered by Martin Luther King Jr. Boulevard to the south, Sharp Street Methodist Church to the north, Zion Methodist Church to the west, and the State Center complex to the east.

Del. Antonio Hayes, who represents the area and won the Democratic primary for that area’s state Senate seat, said he was “shocked” to hear about the city’s interest in combining a revamp of McCulloh homes with State Center.

“It’s surprising, especially since there’s been no community input,” Hayes said.

There are immediate obstacles to any deal involving combining the overhaul of both sites.

Hogan is running for re-election. So any deal to bundle the redevelopments potentially could be reversed if he doesn’t win another term.

The governor, a Republican, maintains sizable polling and fundraising advantages over main challenger Democratic nominee Ben Jealous. But Maryland remains an overwhelmingly Democratic state with a roughly 2-t-1 advantage in registered voters.

The Hogan administration also remains locked in a legal battle with State Center LLC, master developer of a $1.5 billion proposed State Center redevelopment.

State Center LLC planned to build a transit-oriented development, including 2.1 million square feet of office space, 1,500 residential units and 265,000 square feet of retail, around the State Center metro stop. Caroline Moore, CEO of Ekistics LLC and co-managing member of State Center LLC, maintains her firm still wants to redevelop State Center.

After Hogan was elected in 2014, the administration and developer were unable to reach an agreement to build State Center. The major sticking point, according to Moore, was the state commitment to paying for a parking garage as part of the project.

Hogan, and the Board of Public Works two other members, Comptroller Peter Franchot, and Treasurer Nancy Kopp, voted to terminate state leases for the project in late 2016.

The state then sued the developer in an attempt to stop State Center LLC from seeking damages. The developer sued in response, seeking damages after spending $26 million on the project. The issue remains in Baltimore City Circuit Court.

After nearly two years of legal stalemate, Hogan, expressed annoyance with the pace of legal proceedings this summer. The state, in August, began accepting expressions of interest from new builders for a State Center redevelopment.

Efforts to revitalize the aging office complex date back more than a decade. Gov. Robert L. Ehrlich’s administration announced State Center LLC as the developer in 2006. The project suffered from delays as a result of a 2010 lawsuit from downtown property owners challenging Maryland’s procurement process for selecting a developer.

Combining the projects, however, is in keeping with recent city efforts to address declining condition of its public housing stock.

Baltimore has partnered with private developers, using $30 million in federal funds, to redevelop the Perkins Homes, the former Somerset Courts public housing site and the Old Town Mall site. Officials want to create mixed-income neighborhoods on these blighted sites.

The city, via the Housing Authority of Baltimore City, the federal government’s local housing entity, has rehabbed other public housing property through the Rental Assistance Demonstration Program.

The program transfers ownership of public property from the federal government’s local housing entity to the private sector. Those owners use products, such as tax credits, to leverage reinvestment in the properties.

The Daily Record’s government reporter Bryan P. Sears contributed to this story.