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Developer of Clipper Mill in Baltimore files $25 million lawsuit against residents opposing more housing

The developer of Clipper Mill, an enclave of once-industrial 19th century buildings along the Jones Falls in Baltimore, has filed a $25 million lawsuit against condo and town house owners in the community for speaking out against plans to build more homes.

Residents representing two homeowners groups have protested ValStone Partners’ plans for new town houses, an apartment building with parking in the shell of a former mill building and an adjacent parking garage, and have appealed in court.

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They say the new housing proposed by ValStone far exceeds the density envisioned as part of a 2003 plan to transform what was once an abandoned mill in Baltimore’s Woodberry neighborhood into a mix of upscale homes, shops and offices, now anchored by the popular Woodberry Kitchen restaurant.

Larry Jennings, VS Clipper Mill LLC, has plans to redevelop the Tractor Building in the Clipper Mill complex. Two stories of parking, five floors of living space containing 100 apartments are planned. The south wall, on left, will be removed and will be rebuilt with windows. Jennings has filed a $25 million lawsuit against residents for speaking out against plans to build more homes. August 14, 2020.
Larry Jennings, VS Clipper Mill LLC, has plans to redevelop the Tractor Building in the Clipper Mill complex. Two stories of parking, five floors of living space containing 100 apartments are planned. The south wall, on left, will be removed and will be rebuilt with windows. Jennings has filed a $25 million lawsuit against residents for speaking out against plans to build more homes. August 14, 2020. (Kim Hairston/Baltimore Sun)

The lawsuit by VS Clipper Mill LLC argues that residents and their homeowner associations gave up their legal right to oppose future plans when they bought their homes. Residents, the lawsuit says, are bound by restrictive covenants in land records that outline a plan for future development.

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Homeowners, the lawsuit says, “are prohibited... from taking any action to challenge the zoning, development or improvement of the Clipper Mill development,” except by voting through a master community association. And the developer, according to the suit, holds the controlling votes in that association.

But an attorney for the condo residents argues that owners did not give up their First Amendment rights when they bought their homes. While the developer says the residents’ actions are unlawful, the residents counter that the developer’s lawsuit itself is not allowed under Maryland law.

Thomas J. Minton, an attorney representing the condo residents named in ValStone’s lawsuit, said he plans to ask the court to dismiss what he calls a SLAPP suit — a “strategic lawsuit against public participation.” In such complaints, plaintiffs often don’t expect to win but aim to censor or intimidate critics.

The Tractor Building, on right, on Clipper Mill Road. Larry Jennings, VS Clipper Mill LLC, has plans to redevelop the Tractor Building featuring two stories of parking and five floors of living space containing100 apartments. Jennings has filed a $25 million lawsuit against Clipper Mill residents for speaking out against plans to build more homes. August 14, 2020. August 14, 2020.
The Tractor Building, on right, on Clipper Mill Road. Larry Jennings, VS Clipper Mill LLC, has plans to redevelop the Tractor Building featuring two stories of parking and five floors of living space containing100 apartments. Jennings has filed a $25 million lawsuit against Clipper Mill residents for speaking out against plans to build more homes. August 14, 2020. August 14, 2020. (Kim Hairston/Baltimore Sun)

Maryland is among a number of states with anti-SLAPP laws, with legislation passed in 2004.

Often in such lawsuits, “developers sue those who oppose development plans in public forums,” typically claiming libel or interference with business, Minton said.

The lawsuit, filed in Baltimore Circuit Court at the end of June, names two community associations and five residents, accusing them of waging an illegal campaign to obstruct development plans, costing the developer millions of dollars in delays and expenses.

“The people are obstructionists,” Larry Jennings, ValStone’s co-founder and senior managing director, said Friday at Clipper Mill sites proposed for development. “They’re just a small subset of people who are mainly obstructionists, but I think most of the residents, the silent majority, agree with us. ”

Jennings declined to comment on the lawsuit itself or what led to his filing it. The lawsuit argues that residents are not legally allowed to object to zoning or development plans under a master governing association’s covenants put in place in 2010.

Residents say the association was created to maintain common areas, not to prevent opposition to plans.

ValStone, a private equity firm that has invested $1 billion in real estate throughout the United States since its founding, acquired Clipper Mill in 2017, looking to complete what Jennings said was an unfinished project.

First developed by Struever Bros. Eccles and Rouse, Clipper Mill covers more than 17 acres, a mix of redeveloped buildings and new construction on the site of a former machine manufacturing plant just north of Druid Hill Park. More than $88 million has been invested since 2003 in the redevelopment, including housing, offices and retail.

The Tractor Building, on left, sits across Clipper Mill Road from townhomes built in 2006. Larry Jennings, VS Clipper Mill LLC, has plans to redevelop the Tractor Building featuring two stories of parking and five floors of living space containing 100 apartments. Jennings has filed a $25 million lawsuit against Clipper Mill residents for speaking out against plans to build more homes. August 14, 2020.
The Tractor Building, on left, sits across Clipper Mill Road from townhomes built in 2006. Larry Jennings, VS Clipper Mill LLC, has plans to redevelop the Tractor Building featuring two stories of parking and five floors of living space containing 100 apartments. Jennings has filed a $25 million lawsuit against Clipper Mill residents for speaking out against plans to build more homes. August 14, 2020. (Kim Hairston/Baltimore Sun)

ValStone’s first new development plans since buying the property include building 30 three- and- four-story town houses on what is known as the Poole and Hunt site, now a parking lot.

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Another project would add about 100 apartments in a new structure built within a three-wall shell of the historic Tractor Building, once used as an assembly site for machine parts. Plans call for tearing out the interior, roof and back wall, and erecting a building inside that would use the other three restored brick exterior walls as a design element.

It would rise several stories above the current roof and include 200 parking spaces on lower floors and an adjacent lot.

The city’s Planning Commission has approved both projects, and residents appealed the decision to the Circuit Court, arguing that City Council approval is needed for major changes to the original development plan.

The Circuit Court kicked the town house case back to the Planning Commission, finding that the panel failed to make “findings of facts and conclusions of law” before issuing its decision. The court directed the commission to review the project again. The commission is scheduled now to review the facts for both the town houses and the Tractor Building at its meeting Thursday.

Homeowners in the area object to losing the parking spaces that will be wiped out with construction of the town houses and contend that the PUD shows the property remaining a parking lot, said John C. Murphy, an attorney representing the residents’ appeals of Planning Commission decisions. His clients include The Council of Unit Owners of The Millrace Condominium and The Homes At Clipper Mill Homeowners’ Association, both groups named in Jennings’ lawsuit.

Jennings said the residents don’t have access to those parking spaces anyway.

Murphy said the residents also object to plans for apartments in the Tractor Building, saying more of the building should be restored, and to the proposed garage next to it, which they say is not permitted under the current zoning and would be too close to the high-end, contemporary Clipper Mill town houses on a nearby street.

On left, The Millrace Condominiums sit opposite the Poole and Hunt Building at Clipper Mill. The developer of Clipper Mill has filed a $25 million lawsuit against residents for speaking out against plans to build more homes. August 14, 2020.
On left, The Millrace Condominiums sit opposite the Poole and Hunt Building at Clipper Mill. The developer of Clipper Mill has filed a $25 million lawsuit against residents for speaking out against plans to build more homes. August 14, 2020. (Kim Hairston/Baltimore Sun)

Jennings defended the plans he said have been vetted by the Planning Commission. He said the original PUD zoning allowed for about 500 units of housing and “we are well within the allowed density of the project.”

But residents organized an opposition campaign of letter writing and emails, filed legal objections and published what the lawsuit calls false and misleading information about VS Clipper Mill’s development efforts. The suit alleges breach of contract and tortuous interference with economic relations and seeks $25 million in punitive damages for the developer.

“Defendants act to delay, at any cost, any legal act VS Clipper Mill takes to further its development rights,” the lawsuit says.

Murphy said the residents are doing what any residents who are unhappy with proposed changes to their neighborhood typically do.

“They have their objections to the zoning actions and they’re making them,” Murphy said. “They don’t want their community changed drastically.”

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