State Center

The State Center complex in Midtown is slated for redevelopment. (Gabe Dinsmoor / Baltimore Sun / July 21, 2011)

Maryland's top court cleared the way Thursday for the long-stalled State Center redevelopment — a planned $1.5 billion "village" of offices, homes, a supermarket and shops on the site of a 1950s-era government complex in midtown Baltimore.

"We're thrilled," said Caroline G. Moore, the lead developer, after the Maryland Court of Appeals threw out a lower-court ruling that had blocked the project.

"You'll be able to live in Baltimore and work in Baltimore and literally not have a car," Moore said. "The more we can make the city a viable choice for a more diverse population, the more Baltimore will thrive."

But opponents who had sued to stop the project said Thursday that the development would have a negative impact on existing businesses and worsen the problem of vacant office and retail space in the city.

"I'm very concerned, and always have been, by this massive development and its impact on small businesses like ours," said Bonnie Scible, one of the plaintiffs, who owns The Peanut Shoppe on North Charles Street. "I honestly have never understood why we need more office and retail space when the vacancy rate is so high in the downtown district."

For a decade, state officials have planned an overhaul of the government office buildings and adjacent properties that cover 28 acres near Eutaw Street and Martin Luther King Jr. Boulevard. Offices, rental apartments, a condo tower and a grocery store near light rail, Metro and train services will create a strong option for people looking to move to Baltimore, supporters argued.

But citing downtown's 17 percent vacancy rate for offices, 15 business owners backed by attorney Peter G. Angelos sued the state and the developer in 2010, contending that the deal was unlawful and did not follow competitive bidding requirements.

Baltimore Circuit Judge Althea M. Handy agreed, voiding the contracts in January and throwing the project into doubt.

But in Thursday's ruling, the Court of Appeals reversed the lower-court decision, holding that the plaintiffs had waited too long to challenge the project in court.

"They slumbered unreasonably in asserting their claims," Judge Glenn T. Harrell Jr. wrote for the high court. The judges declined to look at whether the project complied with state procurement laws.

Conceived in 2004, the redevelopment plan calls for offices for 3,500 state employees, residences and retail space built over 15 years. The State Center deal guarantees the developer long-term, above-market leases with state agencies to enable the builders to secure financing. The plan is for the state to lease land to the developer, but the tract and structures would in the long run be owned by the state.

The Court of Appeals decision was hailed by state and city officials, including Mayor Stephanie Rawlings-Blake, who has criticized the lawsuit.

"The mayor is pleased to see that the State Center litigation has come to an end," said Kevin Harris, a spokesman for Rawlings-Blake. "The State Center development project will transform the area into a tax-generating, mixed-use, transit-oriented development."

In 2011, Rawlings-Blake argued in an opinion piece in The Baltimore Sun that development in the city had been stifled through "frivolous lawsuits."

"Filing lawsuits cannot be the answer to every concern," she wrote. "Let's stop suing and start doing."

Angelos, owner of a downtown office tower and majority owner of the Baltimore Orioles, responded, writing in the newspaper that concerns about the State Center plans are legitimate. He said the deal would stick taxpayers with "excessive leases."

"In the case of the State Center redevelopment, should we put aside the fact that the state of Maryland failed to follow its own procurement requirements and awarded development rights to political cronies of the current administration?" Angelos wrote.

Angelos could not be reached for comment Thursday.

The Coalition to Save Downtown Baltimore, the group of businesses that filed the lawsuit, issued a statement Thursday repeating the assertion that the project "was never competitively bid."

"To say we should have brought suit even before there was a binding development agreement with the State is difficult to understand," said David E. Johnson, the coalition chairman. "Now the most important thing is for the City and State to commit to programs and policies that reinvigorate the downtown business district. A vibrant downtown is critical to Baltimore's future."

But John Kyle, a Bolton Hill resident and co-chair of the State Center Neighborhood Alliance, said nearby communities are excited about the project, especially the supermarket.

"Except for 9 to 5 on weekdays, it's a very dead and almost desolate place," said Kyle, whose alliance represents 18 community groups and institutions in the area that have been giving input since the project's inception. "The State Center development will put people in the street."

Kyle said the developers agreed to hire area residents after meeting with community members.

"We don't agree with developers on everything, but we feel our voices were heard," he said.

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