Disputed property is sold by city

Board of Estimates takes decisive step in redevelopment

January 11, 2007|By Lorraine Mirabella | Lorraine Mirabella,Sun reporter

The Baltimore Board of Estimates took a decisive step yesterday to begin redevelopment of the stalled superblock project on the city's west side, agreeing to sell 37 properties to Lexington Square Partners LLC, a New York developer.

The move brings the city closer to a legal fight with the charitable organization that owns more than half the buildings.

The five-member Board of Estimates, the city's spending panel, unanimously approved a $21.6 million sale of buildings that occupy 3.6 acres on West Fayette, Howard, Lexington and Liberty streets and Park Avenue.

Lexington Square, the development team selected by the city nearly two years ago to revitalize the area, plans 400 to 500 market rate apartments, 200,000 square feet of retail space and parking.

"This is only the beginning of accomplishing great things for the superblock," said City Council President Sheila Dixon, who chairs the Board of Estimates and will be sworn in as mayor next week when Mayor Martin O'Malley becomes governor.

A vote on the sales agreement was originally scheduled for last month but was deferred after board member Joan M. Pratt, the city comptroller, raised concerns that costs the developers would be allowed to deduct could exceed the purchase price.

Lexington Square team, led by Chera Feil Goldman Group of New York, agreed Monday to a $10 million cap on the cost of demolition and environmental cleanup that will be deducted from the purchase price.

Pratt continued yesterday to question the still unknown costs of street closings and tenant relocation but voted to approve the sale.

The Board of Estimates vote sets the stage for the city to proceed with a "quick take" condemnation of properties owned by the Harry and Jeanette Weinberg Foundation, one of the city's largest charities. O'Malley made the decision last summer to condemn the Weinberg properties. After his announcement, the negotiations resumed but later broke down.

"I'm going to go through the process," Dixon told a new conference after the Board of Estimates approved the sale.

"The law department has been working with the Weinberg group, as well as BDC [the Baltimore Development Corp., the city's economic development arm], and there's a process in place," Dixon said.

Shale D. Stiller, Weinberg Foundation chairman and chief executive, said yesterday that the foundation would challenge a property seizure. The foundation, which has said it was shut out of the city's process to find a developer for the site, has plans to do its own superblock redevelopment with the Cordish Co., the Baltimore developer.

Small business owners also have vowed to stand their ground against city threats of property seizure.

John C. Murphy, an attorney representing west-side shop owners, said in a letter delivered to the Board of Estimates yesterday that M.J. "Jay" Brodie, the BDC's president, had assured his clients that the agreement to sell land to the development team is subject to negotiations between the city and his clients, who want to stay in their buildings.

"Brodie says he's trying to work out arrangements for my clients, and I wanted that to be on record," he said yesterday after the board's vote. "That's fine if he can work out an arrangement, but if not, we're not leaving. The [sales agreement] doesn't really have anything to do with our ownership rights of our property."

Isaac Chera, a partner in the Chera group who spoke to the board yesterday, said the developers have hired the Baltimore firm of Williams Jackson Ewing as retail broker because of its ability to successfully incorporate local merchants and national chains into projects. "We believe local merchants are a critical part of the redevelopment," Chera said. "Otherwise you have just another strip center or mall."

Over the course of revitalizing the west side, the city has tried to work with small businesses that have made a long-term commitment to the area, Dixon said.

"We're all going to work to make sure that we have a good balance," Dixon said. "I think right now the issue is to move forward with the [sales agreement]. People are worried, and it's been a long process."

lorraine.mirabella@baltsun.com

Sun reporter John Fritze contributed to this article.

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