Dive Brief:
- The former developer for a $1.5 billion mixed-use project in Baltimore will make good on its threat to countersue the state after the Maryland Board of Public Works voted to revoke its approval and void its state office leases for the new complex, according to the Baltimore Business Journal.
- State Center LLC's lawsuit is in response to the board's decision and a legal action filed by Maryland Gov. Larry Hogan asking the court to formally void the leases. Hogan has argued that the cost of the leases is too expensive and will have a negative impact on state finances.
- State Center said the project could be ready to start construction in 60 days. However, the mixed-use development could now be delayed in court for years, frustrating project proponents who have already waited 10 years for progress.
Dive Insight:
The complex was intended to replace existing government offices and feature additional office, retail and residential space, as well as to create an economic boon for the area. Former Gov. Martin O'Malley selected developer State Center, and his process, as well as the money the state would have to borrow to live up to its end of the deal, has been the subject of debate and its own legal challenges for years.
Hogan's primary argument is that the real estate landscape has changed since O'Malley committed the state to the pricey lease agreements and that it was now significantly more expensive. State Center said the 28-ace development would generate more than 20,000 jobs for the city.
The governor also has a new state project scoring system in his sights and has promised to do everything he can to repeal the new law in 2017. Hogan lost a battle with the state Legislature last year over the new law, which requires the governor and his administration to rank publicly funded projects by certain criteria so that taxpayers could be privy to the decision-making process. The governor said the new rules made for bad policy and that they would end up hurting the people of Maryland. However, state lawmakers argued that the rules improve transparency and that the governor is not obligated to fund projects based on scores.