Schmoke aide alleges building deal benefited Clarke

April 29, 1995|By Eric Siegel and JoAnna Daemmrich | Eric Siegel and JoAnna Daemmrich,Sun Staff Writers

In yet another attempt to keep alive the issue of Mary Pat Clarke's finances, Baltimore Mayor Kurt L. Schmoke's top political strategist accused Mrs. Clarke's family of benefiting from a special deal struck between her husband and the Johns Hopkins University.

The purchase of an apartment building in Charles Village from the university and its subsequent reassessment saved the Clarke family thousands in city taxes, Mr. Schmoke's adviser charged.

The Clarke campaign quickly shot back that the criticism was "uninformed" and pointed out that the sale restored a tax-exempt property to the city's tax rolls.

The Johns Hopkins University and the state tax assessor's office, which approved the lower valuation, said there was nothing improper about the arrangement.

Larry S. Gibson, Mr. Schmoke's campaign chairman, called a news conference to say that Mrs. Clarke's husband and children bought the building in the 2900 block of N. Charles St. at a "private sale" and that "the Clarkes have somehow managed to have that assessment cut in half."

His remarks represented the latest attack designed to erode the credibility of Mrs. Clarke, the City Council president, who is challenging the mayor's bid for a third term in September's Democratic primary.

Her campaign brushed aside the criticisms yesterday, saying the tax assessment was properly based on the purchase price of $850,000 and blasting the Kurt Schmoke Committee for "uninformed allegations" that "only serve to diminish the credibility of their source."

Mrs. Clarke's husband, J. Joseph Clarke, reacted even more sharply, calling the remarks "outrageous."

"My family invests in Baltimore City. Kurt Schmoke's family rips Baltimore City off," he said, referring to a $327,000 contract the mayor's brother-in-law received as part of the Housing Authority's much-criticized $25.6 million no-bid repair program.

The focus of the latest questioning by the Schmoke campaign is a 64-unit brick dormitory near Hopkins that the university decided to sell in the summer of 1993.

Hopkins officials said the building was less popular among undergraduates and had a number of empty apartments. The university approached four commercial brokers in the summer of 1993 to try to find a buyer.

One of them, CB Commercial, showed the property to Mr. Clarke, who offered to pay $850,000 -- the university's asking price based on an appraisal it had done in June.

However, another appraisal requested by Mr. Clarke showed the property was worth $1.19 million.

"This was a straight business deal," said Dennis O'Shea, a spokesman for Hopkins.

The building had last been assessed several years ago at $1.7 million, though as a nonprofit institution, Hopkins paid no taxes on the property.

After buying the building, Mr. Clarke, a local real estate developer who teaches at Hopkins' continuing education program, appealed the assessment in December 1994. Two months later, the property was reassessed at $849,930.

The director of the Maryland Department of Assessments and Taxation said the reassessment was based on the purchase price, which appeared to be a fair market value. The Clarke family received no special treatment, he added.

"This property owner was treated the same as any other property owner," said Ronald W. Wineholt. "At no time was any political pressure brought to bear.

"This [reassessment] is by the book," he added.

In recent years, many commercial property owners, most of them in the downtown business district, have been successful in appealing to lower their assessments. Baltimore's dwindling tax base has been depleted by millions as a result.

The Schmoke administration has not publicly criticized any of those large property owners for seeking to reduce their assessments.

In his deal for the Charles Village apartment building, Mr. Clarke initially tried to line up $1.2 million in state tax-exempt bonds by promising to provide low-income rental housing.

His request for a local government resolution to obtain the state bonds prompted the Schmoke administration a year ago to raise questions, although Mrs. Clarke made clear that her family was buying the property.

The issue was dropped when Mr. Clarke withdrew his request because he had lined up private financing. He and Mrs. Clarke put up their home in Tuscany/Canterbury to guarantee the $1 million loan as well as a second mortgage held by Hopkins.

On Tuesday, Mr. Schmoke's operatives accused Mrs. Clarke of "misleading" the public by failing to disclose on a required city report that she had co-signed the loan.

Yesterday, the Schmoke campaign attempted to cast new doubts on the deal with a press release headlined: "Citizens of Baltimore Being Cheated Out of Property Taxes." Campaign officials also said Mrs. Clarke should have disclosed the second loan with Hopkins.

At a noon news conference, Mr. Gibson stopped short of saying that Mrs. Clarke, the university or state tax assessors did anything wrong. He said only that property tax assessments should be determined by fair market value, not private sales, and the re-evaluation was costing the city $21,000 a year in lost taxes.

"It's now clear that there is a new concern with this property," he said.

Mr. Schmoke, who on Wednesday offered to declare a "detente" in focusing on personal issues, defended the turn of events yesterday.

bTC "This is not a personal attack, it is a legitimate issue to look into," he said through his spokesman, Clinton R. Coleman.

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