Official resigns in lieu of inquiry

Development chief's second job raised conflict question

O'Malley concedes problem

January 25, 2000|By Tom Pelton | Tom Pelton,SUN STAFF

Baltimore's director of development is stepping down rather than face an inquiry into whether she broke city ethics rules by simultaneously working full time for a company that is competing for her agency's approval on a major city project.

Catherine Fennell will leave her $79,300-a-year city job Friday and cancel a contract that would have kept her with the city through March 31, government officials said yesterday. She will continue to run the Baltimore office of Pennrose Properties Inc., a Philadelphia-based development company.

Mayor Martin O'Malley acknowledged making a mistake by not asking the city Board of Ethics for a ruling before allowing Fennell to hold both jobs. His administration had asked her to stay on the city payroll to help during his transition.

Fennell, who was hired five years ago to help direct city development projects under former Housing Commissioner Daniel P. Henson III, declined to comment yesterday.

The Sun reported Sunday that Fennell began work Jan. 1 as director of Pennrose's new Baltimore office. The 30-year-old development company, the largest builder of affordable housing in Pennsylvania, has been expanding its operation into Baltimore over the past few years.

Critics questioned whether it was ethical for Fennell to simultaneously hold both jobs because Pennrose is competing with another company for the right to convert the city-owned Bromo Seltzer tower near Camden Yards into 11 upscale apartments.

Before taking her job with Pennrose, Fennell played a key role in the city's decision to award development rights to the company in its bids to renovate a 55-unit apartment complex in May 1998 and to build an 80-unit senior housing project in April 1999.

`Disclosed everything to us'

O'Malley expressed regret about not following procedures.

"I feel badly," the mayor said. "I apologized to her because we were the ones who asked her to stay on. She disclosed everything to us, and I should have thought about going to the ethics board in advance. It was my mistake that we did not do it."

O'Malley said he suggested to Fennell yesterday that the city could seek an ethics ruling in retrospect to determine whether her dual employment violated the city code. But Fennell said she didn't want to put the city through an ordeal, he said.

"Live and learn," O'Malley said.

City housing spokesman Zack Germroth, who spoke with Fennell yesterday, said it was never her intention to do anything unethical. He said she was responding to the new administration's request for help during the transition.

"Catherine's love of the city and her deep concern for her work as development director was her motivation for lending her continued expertise to the department," Germroth said.

Approached in November

Pennrose approached Fennell about opening its Baltimore office in November, the same month the company submitted its bid on the Bromo Seltzer tower project at 15 S. Eutaw St.

Over the past two years, Fennell had sat on bidding review committees that recommended Pennrose over competitors to build the $8 million Cherry Hill Senior Housing project on Cherry Hill Road and the $8 million Riviera apartment complex on Druid Park Lake Drive.

After taking the Pennrose job, Fennell promised the city that she would play no role in city discussions regarding the $2.5 million Bromo Seltzer project.

"I have recused myself from all Pennrose deals that have anything to do with the city," she said Fri- day in an interview with The Sun.

But the Bromo Development Group, which is competing with Pennrose for the right to build apartments in the historic tower, threatened to file a protest over the bidding process because of Fennell's dual employment.

`Not about buying influence'

John Rosenthal, Pennrose's founder and chairman, defended his company's hiring of Fennell.

"We had been working with Catherine as a city employee over the last several years, and she was looking to make a career change that coincided with the change in administrations," Rosenthal said.

"This situation was not about buying influence. It was about gaining access to someone who has good skills and experience, and is highly motivated," he said.

Edward A. Schwartz, director of housing and community development in Philadelphia from 1987 to 1992, said Pennrose has a reputation for building high-quality apartments and for knowing how to play the political game.

"You can get more with good work and buying political influence than you can with just good work," said Schwartz, during whose term Pennrose won at least eight city development projects. "I wish it weren't that way, but it is."

Sun staff writer Walter F. Roche Jr. contributed to this article.

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