Public agency or nonprofit group?

BDC : The city's economic development arm defends itself against a lawsuit challenging the way it does business.

December 01, 2004|By Sumathi Reddy | Sumathi Reddy,STAFF WRITER

The group meets behind closed doors, poring over multimillion-dollar redevelopment proposals that drastically reshape the face of the city. Its board members are appointed by Mayor Martin O'Malley, and its budget is approved by the City Council.

Nearly all of the organization's funding comes from city coffers.

Yet the Baltimore Development Corp. has long insisted it is a nonprofit corporation, a designation that shields it from the public eye and the state's Public Information and Open Meetings acts.

Now the city's powerful economic development arm is under increasing public scrutiny. A lawsuit filed by nine businesses in Circuit Court on Monday contends that the BDC is a public agency and is violating the state's laws by not holding open meetings or fulfilling requests for documents, a view long held by open-government groups and other advocates who hailed the suit yesterday.

"They are the most unaccountable group," said Mitch Klein, head organizer of the Baltimore chapter of ACORN, a community group advocating for affordable housing. "People don't have any knowledge of what's going on" at the BDC. "They're really getting away with murder because they're actually making decisions with public money that can essentially advance government without anyone understanding the process."

Open-government advocates agreed.

"In a way, the City Council has handed over part of their authority to the BDC," said James Browning, executive director of Common Cause Maryland. "So this is public business, and we're trapped inside this secretive system."

M.J. "Jay" Brodie, president of the BDC, defended his operation yesterday, stressing the group's public participation, such as meeting with community groups.

"Given the business we're in, which is economic development, and the fact that we're dealing with individuals' and companies' financial situations, I think we're as transparent as we can be," said Brodie. He referred questions about the suit to City Solicitor Ralph S. Tyler, who will represent the BDC. But Brodie noted that even if it were determined that the BDC must follow the Open Meetings Act, most of its business would fall under exclusions made for discussions about the purchase or redevelopment of land.

"We would be holding executive sessions for 99 percent of the time," Brodie said.

Tyler also disputed the lawsuit's contentions. "Our view is that the claim that the Open Meetings Act applies is wrong, and we will present that to the court," Tyler said.

Created by the city in 1991, the BDC oversees the development of downtown projects, city-owned businesses and industrial parks. The current suit centers on the oversight of the redevelopment of downtown's west side, a $100 million-plus project also known as the superblock. In a private meeting on Nov. 18, the board of directors voted to recommend four developers to O'Malley.

The nine businesses suing are angry because they fall within the superblock and will be forced to relocate. They submitted individual plans for redevelopment to the BDC, which they believe were not considered. Their attorney, John C. Murphy, had requested the proposals for the superblock but received a letter saying that the BDC does not have to comply with the state's Public Information Act.

The state attorney general's office said the only similar case in Maryland was a 1999 suit filed by an ice cream vendor against the city of Salisbury. That suit argued that the Salisbury Zoo Commission was a public body.

In that case, the Maryland Court of Special Appeals ruled in favor of the ice cream vendor, citing the commission's purpose and "the degree of control" that the mayor and city council held.

"If there is sufficient government control, a court might view a nonprofit corporation as, in fact, a government agency," said William R. Varga, an assistant attorney general. "It's a question of how much control. How much control does city government really have over the operations of the entity?"

According to Brodie, some members of the board of directors are private-sector citizens appointed by O'Malley. Others are city employees who sit on the board by virtue of their governmental position. Brodie is an appointee of the board and hires his own staff. The BDC's budget, as well as all property purchases, are approved by the City Council, Brodie said.

Brodie said that although the BDC's board meetings are private, if asked when a meeting will be held, the group would disclose the date and place.

"Our meeting dates are not secret," he said.

Yesterday afternoon, Murphy said he received a fax from the BDC responding to his Nov. 18 request. The letter said the next board meeting would be held Dec. 16 at 7:30 a.m. in its office at 36 S. Charles Street.

"As you know," the letter said, "the board meetings are not open to the public."

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