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A state board voted Wednesday to keep the Maryland Insurance Administration’s lease in downtown Baltimore, despite legal challenges brought by a competing landlord.

The state’s three-person Board of Public Works voted 2-1 in favor of extending the agency’s lease another 10 years at St. Paul Plaza Office Tower, located at Lexington Street and St. Paul Place, where it has been housed since 2009. The state’s lease at St. Paul Plaza expired in May and a six-month extension ran out in November.

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Gov. Larry Hogan and Treasurer Nancy Kopp voted in favor of the lease renewal, with Comptroller Peter Franchot dissenting.

The 10-year extension follows the insurance administration’s controversial reversal of a plan to move its headquarters to Southwest Baltimore. The 250-person agency had selected Montgomery Park, the redeveloped former Montgomery Ward Catalog House next to Carroll Park off Interstate 95, for its new home after receiving a dozen competitive bids.

However, representatives of the Department of General Services, which handles leasing for the state, said a lease agreement was never finalized with Montgomery Park and that the needs of the insurance agency had changed, requiring the department to rebid the contract or extend with the current landlord.

Maryland Insurance Commissioner Al Redmer Jr. told the board that the insurance regulator decided to stay put after hearing objections from insurance providers and determining a move out of downtown would make it harder to retain employees, many of whom rely on public transportation to get to work.

Redmer took the fault for not anticipating the move’s impact on employees.

“I know that when you move, you’re going to lose employees,” he said. “But I underestimated the significant number of folks that we were going to lose if we moved.”

Before the vote, representatives for both Montgomery Park and The Kornblatt Co., owner of St. Paul Plaza, made their cases to the board for why they had been treated unfairly by the agency.

Montgomery Park officials said that despite offering a cheaper rent and lower overall costs, the state had delayed lease negotiations while officials waited for the legislative session to end and then suddenly canceled the contract. Kornblatt officials said the absence of a long-term lease with an approved tenant jeopardized the terms of their agreement with their lender.

Owners of the Montgomery Park office complex appealed the agency’s decision to cancel the contract to the Maryland State Board of Contract Appeals, which has yet to rule on the matter.

The Department of General Services requested approval of the lease before the protests were resolved because the absence of a lease meant Kornblatt was permitted under the expired lease to charge double rent.

Hogan, Kopp and Franchot each remarked that the situation had been poorly handled by the parties. Franchot said he voted against an extension in favor of delaying a decision until the appeals board has released a ruling.

The Board of Public Works also approved plans for a public-private partnership designed to ease traffic congestion around the nation’s capital, after a compromise agreement last week between Hogan and Franchot.

In Maryland, the plan includes building new toll lanes on Interstate 270, though existing lanes on Interstate 270 would not require drivers to pay tolls. The plan was scaled back to not include toll lanes on Interstate 495, east of I-270 for now. Toll lanes will be added on I-495, also known as the Capital Beltway, from the George Washington Parkway in Virginia, across the American Legion Bridge to I-270 in Maryland. No existing lanes will have tolls.

The traffic plan also includes an amendment to build a new American Legion Bridge across the Potomac River between Maryland and Virginia.

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Baltimore Sun reporter Lorraine Mirabella contributed to this article.

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