Open books to public, BDC is told

Development agency has to disclose details of deals

November 04, 2006|By John Fritze | John Fritze,Sun Reporter

In a decision that could have broad implications for the public's right to inspect the workings of government, Maryland's highest court ruled yesterday that the agency overseeing Baltimore's economic development must open its meetings and its paperwork for public review.

Writing that the Baltimore Development Corp. has previously been able "to cloak the business of the citizens of the city of Baltimore behind the veil of a supposedly private corporation," the Court of Appeals dismissed city arguments that the agency's closed-door meetings are legal and crucial to the agency's work.

Though the decision focuses only on the city's development agency, a nonprofit corporation, its impact could prove far reaching, potentially opening up dozens of quasi-public agencies that are technically separate from government but perform public functions. Most of them, like the BDC, have operated behind closed doors for years.

"I have yet to meet anybody who has been to a Baltimore Development Corporation meeting, and that's going to have to change," said John C. Murphy, the attorney who filed the lawsuit. "By itself, that's going to be a great first step."

Created in 1991, the BDC has engineered many of the city's largest land deals, including the $305 million convention center hotel, scheduled to open in 2008. It is responsible for choosing contractors and acquiring land for those projects. It technically does not have the power of eminent domain, but it influences the public agencies that do.

Advocates and journalists have complained that the agency does not release details of its operations. It does not disclose, for instance, the names and salaries of its employees, the minutes of its meetings or the development proposals it receives from private companies.

The court wrote that the BDC receives as much as 87 percent of its budget from the city, meaning from taxpayers.

Murphy sued on behalf of nine businesses that were to be condemned as part of a redevelopment on the west side of downtown in an area known as the "superblock." The business owners argued that a decision by the BDC's board of directors to recommend a developer for the project was illegal because it was made behind closed doors.

Baltimore's Circuit Court ruled against the business owners last year. They appealed to the Court of Special Appeals, which in January overturned the lower court. The BDC, whose board members are appointed by Baltimore Mayor Martin O'Malley, appealed to the Court of Appeals in March, and arguments were heard less than a month ago.

It is not clear how the ruling will affect the BDC's practices. City officials, including BDC President M.J. "Jay" Brodie, have said that some level of secrecy is needed to orchestrate major development deals with private companies, and the state's open-meetings law allows the board to hold closed-door meetings if the topics include the purchase of property or efforts to locate, expand or retain a business in the state, which encompasses a large part of what BDC does.

Joshua N. Auerbach, the city's assistant solicitor, who represented the agency, said that the BDC will comply with the court's ruling. Auerbach said he could not comment on whether the agency would try to alter its corporate structure - for example, by relinquishing the mayor's power to appoint its board - as a way to appear less public.

"The Baltimore Development Corp. accepts the results of the decision," Auerbach said. "This will be a change, as we said to the court. It will make the BDC work a bit more difficult, but BDC will go on."

The decision also might delay the west-side redevelopment. The BDC selected New York-based Chera Feil Goldman Group last year to develop the 3.6-acre area with 225 apartments and 64,500 square feet in retail space. Now, a court must decide whether the developer will stay on the project or whether the city's agency must go back through the process of picking a developer, this time in public.

Many of the business owners said they want to stay. They submitted a proposal to the BDC that would have allowed them to keep their businesses in the superblock, but they were never allowed to attend board meetings to make their case.

"It's always about the big guys pushing the small guys around," said Scott Mun, who owns Wig House on Lexington Street. "At the very least, they should consider the merchants and the people that are already here and not just push them aside."

As the BDC case worked its way through appeals this year, it presented O'Malley with a conundrum. Running for governor in part on a platform of making government more open and accessible, O'Malley had to simultaneously justify using tax money to defend the BDC's policy of keeping meetings and records closed.

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