Two Bolton Hill homeowners are filing suit after their $720,000 in renovations were turned down for tax credits

Pair Challenges How Trust Defines `Historic'

October 25, 2005|By JILL ROSEN | JILL ROSEN,SUN REPORTER

In 1885, a wealthy doctor built a home like a castle in one of Baltimore's grandest neighborhoods, aiming, no doubt, for a showplace.

When George Lavdas and Jeremy Walston bought that Bolton Hill property more than 100 years later, they, too, wanted a showplace and figured if they threw enough money into an elaborate restoration, they could restore the riches that time had erased.

They think they succeeded. The Maryland Historic Trust begs to differ.

Despite the homeowners pouring $720,000 into the restoration, replicating everything from intricate plaster moldings to a majestic mahogany staircase, and despite the work earning a local renovation prize, the trust refused to award the project historic tax credits, ruling that the work did not respect the home's original character.

That rejection cost Lavdas and Walston nearly $150,000, money the state offers property owners to encourage the revitalization of historic districts. In Baltimore, thousands of homes are eligible in dozens of neighborhoods ranging from Guilford to Mount Vernon to Butchers Hill. Without the program's commercial end, acclaimed restorations, including the Hippodrome Theatre in West Baltimore, Canton's Can Company shopping center and the Tide Point offices in Locust Point, might not have occurred.

Instead of accepting the trust's decision, Lavdas and Walston are suing. They are the first to do so since the tax credit program began in 1996. They accuse the state agency, whose decisions cannot be appealed to another government body, of arbitrary and capricious rulings.

"We spared no expense matching every historical detail," Lavdas says. "Obviously we felt we did everything you could conceivably do."

Judge W. Michael Pierson denied the trust's request for summary judgment yesterday in Baltimore City Circuit Court. A trial date is set for February.

Trust Director J. Rodney Little declined to discuss the lawsuit but explained that some historic homeowners mistake renovation for restoration.

"It's not just a rehab program, it's a historic rehab program," he says. "If [homeowners] want a modern building in a historic shell, they're free to do that, just not for tax credits."

The standoff taps into the growing tension between preservationists and modern homebuyers, who swoon over period charms but can't do without great rooms and gourmet kitchens.

Every year more people apply for the credits, Little says, and every year more are rejected for failing to meet the trust's definition of authenticity. Since the program's inception, the state has bestowed about $152 million in credits to nearly 2,000 residential and commercial projects.

The home Lavdas and Walston bought at 1305 Park Ave. was built just a few years after the invention of the light bulb. While spending thousands to send the structure back in time, they also paid for contemporary touches such as a first-floor powder room, an expansive dining room and a luxe kitchen.

"These homes have to be lived in," Lavdas argues. "This is the 20th century, not the 19th century."

After admiring it for years, Lavdas, an attorney, and Walston, a physician, bought the imposing stone home for $615,000 in 2003. Long before that it had been carved into five apartments, so the two had an immense job ahead of them to turn it back into a single-family home.

In short order they secured a construction loan, hired an architect and began looking into the tax credit program.

According to court papers, the homeowners showed the home and their design plans to a Maryland Historic Trust administrator in October 2003. The administrator, they say, did not express "substantial concerns" about their plans.

Lavdas and Walston officially applied for credits the following May - with construction well under way. That July, the trust sent them a blunt rejection letter:

"We have determined that the proposed rehabilitation project is not consistent with the historic character of the property," wrote administrator Daniel Sams.

Sams cited a number of reasons for denial: a kitchen stove blocking a perfectly good bay window; the removal of a wall to create a dining room from two smaller rooms; out-of-character doors; a rogue ceiling medallion and the historically insensitive powder room.

The homeowners appealed to the trust's board of trustees, pointing to a project in their neighborhood which, they said, got tax credits after a more "radical" renovation than theirs.

The trust denied them again. But after the hearing, trust Deputy Director Michael K. Day sent the homeowners a letter saying that he checked to see whether the other project had received credits but could find no proof. If it had, Day added, "I would have been the first to agree with your position."

Lavdas and Walston hurriedly popped a copy of the other property's certification in the mail, and all but waited at the phone for the trust's approval.

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