Montgomery Park has lost the latest legal battle in its back-and-forth effort to reopen the bidding for the Maryland Insurance Administration’s lease, a contract the Pigtown office building was the front runner to win until the state renewed MIA’s lease in downtown Baltimore for 10 years and about $17 million in 2020.
In a 3-0 decision, Maryland’s second-highest court ruled last week that the Department of General Services – the state’s leasing agency — validly withdrew its request for bids on MIA’s lease after Montgomery Park had made its offer.
Once the request for proposals was withdrawn, Montgomery Park lost its standing to challenge the renewal of MIA’s lease at 200 St. Paul Place, the Court of Special Appeals held in its reported decision.
The Maryland Board of Public Works approved the controversial renewal in January 2020 amid the legal challenge by Montgomery Park, which is majority owned by Himmelrich Associates Inc. in Baltimore.
Neither the company’s leader, Samuel K. Himmelrich Jr., nor Montgomery Park’s attorney immediately returned messages Tuesday seeking comment on the intermediate court’s decision and any plans to seek review by the Court of Appeals.
Montgomery Park is represented by Christopher J. Olsen, of Henner & Scarbrough LLP in Atlanta, Georgia.
The Department of General Services said in a statement that “the decision from the Maryland Court of Special Appeals is the decision DGS expected.”
The Court of Special Appeals’ ruling reversed a Maryland Board of Contract Appeals decision that DGS had acted arbitrarily and capriciously in withdrawing the request for bids based solely on objections raised by then-MIA chief Al Redmer, who favored renewing the lease.
Redmer expressed concern that experienced MIA employees would quit because Montgomery Park is not easily accessible by public transportation and that the agency’s regulatory operations would be delayed during the weeks-long relocation.
The board said DGS wrongly accepted Redmer’s objections without investigating whether his concerns were justified. But the Court of Special Appeals said DGS and its procurement officer, Wendy Scott-Napier, were under no obligation to investigate.
“There is no language in any statute, regulation, board decision, or case imposing on DGS and Ms. Scott-Napier to investigate and verify Commissioner Redmer’s … reasons in favor of canceling the RFP with Montgomery Park independently,” Judge Douglas R.M. Nazarian wrote for the court. “The procurement officer relied on the rationale articulated by the head of the tenant agency, who is closer to its needs and concerns than the board is, and Montgomery Park offered no evidence or testimony that undermined Commissioner Redmer’s reasons for requesting the cancellation or the procurement officer’s decision to rely on them.”
The Court of Special Appeals also reversed the board’s conclusion that Montgomery Park has legal standing as an “aggrieved party” to challenge the renewal of MIA’s lease at 200 St. Paul Place, owned by Kornblatt Co.
The court said the RFP, having been validly withdrawn, removed Montgomery Park from the competitive bidding process and enabled DGS to renew MIA’s lease, as permitted under state law.
“When Ms. Scott-Napier canceled the RFP with Montgomery Park on April 23, 2019, the cancellation process severed the relationships among Montgomery Park, DGS, and MIA for procurement purposes,” Nazarian wrote.
“Montgomery Park was no longer an actual or prospective bidder or offeror – it stood in the same position as every office building that is not St. Paul Plaza: It is not the holder of the existing lease, it has not suffered any damage, and it is not in line for the award,” Nazarian added. “In other words, DGS was not required to engage in a competitive bid process before renewing the lease with St. Paul Plaza because this situation fell within the statutory exception.”
Nazarian was joined in the opinion by Chief Judge Matthew J. Fader and Judge Stuart R. Berger.
The Court of Special Appeals rendered its decision in Montgomery Park LLC v. Maryland Department of General Services, Nos. 35 and 48, September Term 2021.