Baltimore to continue using lease program with Grant Capital

J.P. Grant

Baltimore will continue financing major purchases through a master lease program with a financier whose relationship with former Mayor Catherine Pugh has drawn scrutiny.

The Baltimore City Board of Estimates voted Wednesday to approve the procurement of 25 portable air compressors, worth a combined $643,700, which will be financed through the master lease program with Grant Capital Management Inc., owned by J.P. Grant.

The board approved another purchase funded by the program earlier this month for $13 million in Motorola radio equipment.

Grant publicly acknowledged purchasing Pugh’s “Healthy Holly” books and in Pugh’s federal indictment, where he is referred to as “Purchaser G, the owner of a Maryland-based financing company,” prosecutors allege he was aware that the funds from the sales would be used for campaign purposes and in violation of state law. Prosecutors have declined to comment on any investigation into Grant.

Baltimore City Council President Brandon M. Scott made a motion at Wednesday’s meeting to defer approval of any purchases funded through the master lease until federal investigators and the city’s inspector general conclude any ongoing investigations. The motion was not seconded and Scott abstained from the vote.

City Solicitor Andre M. Davis said there is no legal impediment to the city’s continuing to finance purchases under the program.

The master lease program allows the city to finance large purchases of equipment, frequently vehicles, over a longer period, Henry J. Raymond, director of the Department of Finance, explained to the board. The city previously had two vendors for the program, including Grant Capital, but the second is no longer available.

The city has already sought bids for a new second vendor, which would allow the city to get the most competitive interest rates, but the only vendor who applied was deemed nonresponsive, according to Raymond. The Department of Finance is rebidding the matter on an expedited timeline and hopes to have a new second vendor within three months.

The agreement with Grant Capital has been in place since 2003 and was renewed most recently in August 2018. Raymond said the agreement has a provision allowing the city to terminate it if old contracts are found to be improper. Without another vendor in place, Raymond said the remaining options for the city to make major purchases would be to pay upfront or attempt to “piggyback” on neighboring jurisdictions with similar programs.

At least two more procurements funded by the master lease will be on the next Board of Estimates agenda in January, according to Raymond. They are for two “minor” equipment purchases totaling less than $300,000, he said.