City awarded judgment, but it's unlikely to collect Development corporation listed as forfeited owes $275,000 for property

July 15, 1998|By Eric Siegel | Eric Siegel,SUN STAFF

The city has won a $275,000 court judgment against a nonprofit community development corporation for payments going back more than a decade that the group owed on city-owned property. But the victory may prove to be a hollow one.

The Park Heights Development Corp. -- which ran an "incubator" for small minority-owned businesses in the Park Circle area of Northwest Baltimore until it was removed by the city two years ago -- was ordered to pay the money last month by Baltimore Circuit Judge Joseph H. H. Kaplan.

The development corporation, whose status is listed as "forfeited" by the state Department of Assessments and Taxation, never formally contested the city's claim.

"That's the first question we have to ask -- whether they have the money," Andrew G. Bailey, the assistant city solicitor who handled the case for the city, said yesterday.

'Not optimistic'

"I'm not terribly optimistic we're going to recover the $275,000," Bailey added. "But we're going to go through the process."

According to a lawsuit filed by the city two years ago, the nonprofit development corporation had leased space from Baltimore's housing department at 3000-3002 Druid Park Drive since 1982.

Under the terms of the lease, the suit said, the corporation was obligated to pay the city an "annual tax equivalent charge" -- that is, an amount equal to what the property taxes on the buildings would be if they were owned by a private group.

But since 1985, that obligation was not paid, the suit said.

Evicted

In the settlement of a separate case in District Court two years ago, the city evicted the development corporation from the buildings, where it maintained an office. It also took control of the property and another building managed by the development corporation at 2901 Druid Park Drive, according to interviews and court documents.

The previous phone number for the Park Heights Development Corp. has been disconnected, and there is no new listing for the group.

Efforts yesterday to reach Morris A. Iles, the head of the development corporation, were unsuccessful.

But in an interview two years ago, when the development corporation's debts first came to light, Iles contended that he didn't owe money on the properties because they didn't make any money beyond operating expenses.

Previous administration

"The partnership I worked out was with a previous administration," Iles said at the time. "When the new [Schmoke] administration came in [in 1987], we just fell through the cracks."

The money owed the city by the Park Heights Development Corp. became a flash point two years ago for contentions by City Comptroller Joan M. Pratt and her real estate officer, Anthony J. Ambridge, that the city was losing millions of dollars in potential revenues because agencies were lax and disorganized in collecting lease payments.

City housing department spokesman Zack Germroth said yesterday that the buildings now have four tenants, which occupy about one-third of their square footage. He said the city is "entertaining proposals" to sell the buildings.

Private company

State Del. Salima S. Marriott -- who has a district office at 2901 Druid Park Drive, which is now managed by a private company under contract with the city -- said the development corporation began in the late 1970s as an outgrowth of the now-defunct Park Heights Community Corp. She said the corporation previously administered other activities, including a revolving loan fund, but that its activities have shrunk in recent years as federal funds have dried up.

She said she believes the development corporation is also out of business but said its absence has not proved to be a problem.

"There has been no change for us as a tenant," she said.

Pub Date: 7/15/98

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