Developer sues Baltimore over Poppleton project

Fourteen-acre site has long been slated for revitalization

July 12, 2012|By Steve Kilar, The Baltimore Sun

Drug addicts sit on the front steps of Anthony Williams' West Baltimore home and use.

The only homeowner left on his block of North Schroeder Street in the Poppleton neighborhood, Williams fears transients living in the vacant rowhouse next door will drop their cigarettes and send his place up in a blaze.

He is an island amid debris, he said, the victim of the city government buying up the surrounding properties — demolishing some and leaving others boarded up — as part of a 14-acre redevelopment plan that has cost the city millions and pushed people out of homes.

"I have been willing to relocate since I heard of the project … now that I am the last man standing I am absorbing all of the neighborhood's problems that have been left behind," Williams recently wrote to the head of the developer, La Cite Development LLC, contracted to rehabilitate the run-down community.

When the project was announced in 2006, the city and La Cite said new residences and retail space would start being built as early as the next year. Plans also called for a tennis facility and a new school. But the recession hit and now, six years into the development agreement with the La Cite-controlled company Poppleton Development I LLC, the city is trying to terminate the deal.

A federal judge may decide Friday, after a hearing set for the morning, whether La Cite still might have the right to redevelop the area, a decision that will affect how much longer residents of Poppleton, just west of Martin Luther King Boulevard and south of U.S. 40, have to put up with a ripped up and nearly empty district.

The hearing before U.S. District Judge Richard D. Bennett is on La Cite's request for a temporary restraining order against the city. If he doesn't rule in the company's favor, the project could be derailed for who knows how long.

Baltimore Housing, the city agency responsible for the project, declined to say — because of the litigation — whether the Poppleton redevelopment would continue with another developer if New York-based La Cite gets the ax.

In May, nearly eight years after the city requested development proposals for the site, the Baltimore Department of Housing and Community Development notified the company in a letter that it had defaulted on their 2006 agreement.

The agency's spokeswoman, Cheron Porter, said in a statement to The Baltimore Sun: "Since La Cite has been unable to secure financing to move the project forward, Baltimore Housing is terminating the development agreement which was signed in 2006."

In response, La Cite filed a civil suit two weeks ago against the mayor and City Council, the housing agency and Housing Commissioner Paul T. Graziano to prevent the city from voiding the contract. In court documents, the developer blames the city for La Cite's failure to get financial commitments.

The city has failed to acquire clear title to all of the properties in the project's first phase — or demolish and clear them — by agreed-upon dates, the complaint stated. Baltimore Housing also failed to keep the area safe, which could scare off financers, La Cite's attorneys argued.

The city also has blocked La Cite's access to public financing, the complaint charged. For instance, La Cite said the city delayed discussing tax increment financing until after the elections last fall.

"On one hand, they undermine our ability to get financing, then on the other hand they say we can't get financing," said Charles S. Fax, a Bethesda-based attorney representing Poppleton Development.

In spite of these obstacles, La Cite has received letters of intent from several entities willing to provide funding for parts of the project, Fax said. Attached to the complaint are letters from Wells Fargo, BB&T Capital Markets and U.S. Bancorp, among others, expressing interest in financing the redevelopment.

City Solicitor George A. Nilson said the city has been diligent about acquiring the necessary properties in Poppleton, anticipating the city's transfer of the land to La Cite. The city has already spent about $10 million on neighborhood properties, he said.

Baltimore has not defaulted on its obligations under the agreement, Nilson said, calling La Cite's version of the development's history inaccurate.

Fax said he believes the city's reason for attempting to terminate the development agreement, that La Cite couldn't nail down financing, is a pretext.

"Municipal winds have now shifted, and Baltimore City has recently decided to renege on its commitments," Fax wrote in the complaint. Then-Mayor Martin O'Malley's administration executed the agreement, but now, two mayors later, interest in working with La Cite has vanished, Fax said.

Mayor Stephanie Rawlings-Blake, through spokesman Ian Brennan, declined to comment on Fax's accusation because of Friday's hearing.

The project, which La Cite calls Park Square, is a stone's throw from the University of Maryland BioPark, the Edgar Allan Poe house and Franklin Square Park.

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