A development team including a contractor with whom Mayor Sheila Dixon had a relationship was chosen last year for a $200 million project in Southwest Baltimore, even though an independent city panel urged that the contract be awarded to another firm.
The redevelopment of Uplands, a boarded-up apartment complex off Edmondson Avenue, has been described as one of the largest projects of its kind on the East Coast. Dixon recently acknowledged having a personal relationship in 2003-2004 with a developer who later got a stake in the deal.
Selection of the developer came a few months after Dixon took office as mayor, but city officials said she played no role in influencing the outcome of the process. Several residents said they, not Dixon, were the ones who advocated reversing the panel's decision because they opposed the team initially recommended for the site.
The unusual progression of the project, including the decision to forgo the panel's recommendation, comes to light days after The Sun learned that the Maryland state prosecutor has been investigating Dixon's relationship with Doracon Contracting head Ronald H. Lipscomb and her support for development deals that benefited his company.
Prosecutors have been examining spending irregularities at City Hall for more than two years and have probed projects involving Doracon, but there is no indication that the investigation extends to Uplands.
Despite the review panel's preference, Housing Commissioner Paul T. Graziano recommended in June of last year that the Uplands project - a plan to convert 100 acres of vacant buildings into 1,100 new apartments, houses and condominiums - be overseen by Philadelphia-based Pennrose Properties. Dixon held a news conference the next month to announce Pennrose would get the job.
The team also includes Bethesda-based home builder EYA and a firm called Uplands Partners - a consortium including Doracon, Banks Contracting Company, Harrison Developers and Ambridge LLC, according to the city. Others involved in the project include the Cryor Group and former Prince George's County Executive Wayne K. Curry.
Months earlier, Graziano had recommended that the project be awarded to another team led by St. Louis-based McCormack Baron Salazar, The Sun has learned. That decision, which Graziano confirmed last week, was based on a panel's review of three proposals and its unanimous opinion that McCormack was the most qualified firm.
Graziano said he took his recommendation to use McCormack to then-Mayor Martin O'Malley in late 2006 but that O'Malley deferred making a decision at least in part because he was preparing to leave City Hall to begin his term as governor.
Around that time, the community learned that the city was leaning toward McCormack and asked for an explanation. Neither Graziano nor community leaders recall how residents learned of the recommendation to use that firm - the city's solicitation prohibited companies from communicating with the public until after the selection process was complete.
In November of 2006, the city organized a meeting at Edmondson High School for community members to hear from the various companies about their proposals. About 30 people turned out for the meeting, according to news reports from the time. Several subsequent meetings were held with the community through early 2007, records show.
Graziano said residents living near the site strongly opposed McCormack, despite the city's attempts to convince them otherwise.
"Frankly, I changed my mind based on that," Graziano said. "My original recommendation was consistent with the panel, and I would have been happy with that, but the community was so adamant about it."
Graziano said he was never asked by the mayor to change his position and that the only pressure he ever received was from the community.
Residents often express strong opinions about redevelopment plans, but this case is unusual in that the project was not expected to differ greatly regardless of which team won. The community and the city had already established the broad outline of the proposed neighborhood through a 2004 zoning plan.
Some said they objected to McCormack mainly because the city seemed so eager to use them.
"It wasn't about their work," said Angela Bethea-Spearman, president of the Uplands Community Association. "They appeared to the community to be pre-chosen. We wanted a fair process for everyone. [They] knew too much and [weren't] from here. It did seem like it was set up."
Bethea-Spearman added that the McCormack team did not provide details about its plan to use minority- and women-owned subcontractors while the Pennrose team had put together an impressive list that included many of Baltimore's best-known minority contractors.
According to the housing department's request, the panel did not weigh heavily each team's ability to use minority firms. Out of a possible 160 points, the panel's scoring criteria reserved only five points for the use of minority-owned businesses.
The city's Housing Department has declined to release the results of the scoring process.
Bethea-Spearman said she was never pressured by the city to advocate for the Pennrose team.
The city gained control of the Uplands site in 2004, when the U.S. Department of Housing and Urban Development foreclosed on the apartment complex after the private owner defaulted on a federally backed mortgage. The federal government sold the land to the city for $40.
The development has been slowed by legal problems, but Graziano said a settlement agreement with several former tenants should allow demolition at the site to begin by the end of the year.
Built in 1947, Uplands is today empty and overgrown. The windows and doors of its brick buildings are covered with red boards. A light pole outside one of the buildings is bent toward the ground. A sign posted on the site boasts: "Another housing redevelopment project brought to you by Mayor Sheila Dixon and the citizens of Baltimore."
The entry to the complex is about 500 feet from the mayor's home in the Hunting Ridge neighborhood.
Pennrose was ranked second on the project. Another team, made up of Bank of America Community Development Corp. and the Bozzuto Group, was ranked third, Graziano said.
"We firmly believe that when we are fortunate enough to be selected that we're selected based on our track record," said Mark Dambly, president of Pennrose. "We never presented or had any contact with any elected official during that process."
A representative of McCormack declined to comment.
An affidavit drafted by state prosecutors last year showed that Dixon and Lipscomb had taken several trips together and alleged that Lipscomb purchased a $2,000 gift certificate that Dixon used to help defray the cost of two fur coats.
Dixon has denied that the relationship or the gifts influenced her judgment as president of the City Council. Dixon voted on several projects that benefited Lipscomb's company.
An attorney for Lipscomb, Gerard P. Martin, declined to comment on Uplands but noted that his client has bid for a number of other city projects and has lost to other firms. One of those, he said, was Gateway South, a major redevelopment of industrial warehouses on the waterfront south of downtown Baltimore.
Sterling Clifford, a spokesman for Dixon, said the relationship ended before the city advanced the Uplands project. He said the mayor never put any pressure on Graziano or the community to select the team that included Doracon.
"They mayor's been pretty clear about the timeline with the relationship. It was over a long time ago," he said. "You look at any project like this that's occurred in the city in the past 20 years and you will find someone questioning how it happened."
Sun reporter Lynn Anderson contributed to this article.Copyright © 2014, The Baltimore Sun