Baltimore Development Corp. President M.J. "Jay" Brodie said high-ranking city officials were well-versed in the terms of the original deal with the developers behind the 11-acre Gateway South sports complex, including a clause that would require the city to repay the developers for studies they undertook in planning the project if the city terminated the deal.
Martin O'Malley's term as mayor and the beginning of Sheila Dixon's tenure, and both were briefed on the deal.
City Solicitor George Nilson had said this week that the sportsplex deal was signed by a junior employee of the Baltimore Development Corp. and did not receive approval from the law department.
The settlement with Samuel Polakoff's Gateway South group was approved Wednesday by the Board of Estimates. The city extricated itself from the agreement with Polakoff late last year over the land, which is slated to be the site of the city's casino.
Polakoff had planned to partner with Ravens linebacker Ray Lewis to build an office complex, shops and athletic fields on the land off Russell Street.
Brodie said "major environmental problems" and "traffic problems" prompted the developers, at the city's behest, to perform many studies while planning the project.
"It's a great location, but there are significant constraints," he said.
Deputy Mayor Kaliope Parthemos said that Mayor Stephanie Rawlings-Blake decided soon after taking office last year to end Polakoff's exclusive negotiating privileges on the 11-acre parcel.
"She wanted to make it clear that that land was for slots," said Parthemos, who oversees economic development.
Brodie said that an "unusual" clause in the deal with Polakoff required the city to reimburse him for studies to prepare for the project. It appeared unlikely that the city would pull out of the deal at the time, he said, but state law later narrowed the spot where a city casino could be built to that site.
Even if the clause were not included in the agreement with Polakoff, it would be difficult for the city to untangle itself from such a deal without getting sued, Brodie said.
Polakoff initially asked the city for $4 million but eventually agreed to the $1.2 million payment in exchange for the studies.
The city now has "top-quality environmental studies" on the parcel, which includes the former site of the Maryland Chemical Plant, Brodie said.
Also Wednesday, the Canadian homebuilder who had initially been chosen by the city to build the casino filed an appeal with the state's second-highest court of the state's decision to not grant him a slots license.
The state slots commission recently announced it is seeking new bids on the casino project. Applications and a $22.5 million slots licensing fee are due late next month. In an email announcing his appeal, Moldenhauer said he planned to bid on the project.
"When all of this litigation is over, we're going to get a [slots] license and the Russell Street property, and build a great casino," Moldenhauer said in a statement.