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Water bill on Hampden townhouse project, up to $200,000, disputed by developer proposing Westport project

The water bill for a new townhouse community in Baltimore’s Hampden neighborhood has gone unpaid for years and reached nearly $200,000.

Residents of Hampden Square say they’ve tried unsuccessfully to pay their fair share of a bill that’s remained in the land developer’s name. They became more concerned late last year when they learned that developer was about to embark on a major city project, a mixed-use community in Westport on one of Baltimore’s last undeveloped waterfront sites.

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But the developer, Ray Jackson, disputes the bill — at least his responsibility for it. City records show a water bill for $198,460.76 owed by Cairnes Lane Development, the partnership through which Jackson developed building lots for the 27 homes a block west of Falls Road, near Atomic Books and Nepenthe Brewing. Jackson said the Hampden Square water bill should have been transferred to builder Richmond American Homes, which bought the ready-to-build lots from Cairnes Lane in 2015.

“I don’t have a $200,000 water bill,” said Jackson, whose company, Sparks-based Stonewall Capital, plans to build hundreds of apartment units and townhouses on 43 acres along the Middle Branch of the Patapsco River in Westport.

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Richmond American, a nationwide homebuilder based in Denver, said it does not comment on homeowner concerns, “but we do take them seriously. We are looking into this matter.”

Jackson said the account should have been turned over to Richmond American, which then should have turned it over to the homeowners association. Residents first moved into the community in 2016 and it was completed in 2018.

The unpaid bill is one of many concerns Hampden Square homeowners have with construction, including stormwater management deficiencies they say could lead to flooding and erosion. But the water metering system is one of the most glaring problems, said Stephen McGraw, who moved there in August 2016 and is president of the Hampden Square Home Owners Association.

The residents just want to do the right thing,” McGraw said. “People are trying to pay their water bills. People want to pay their fair share, and the city presents no avenue to do that.”

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McGraw said plans for the community called for each home to be individually metered. Instead, the community received one 8-inch water meter for the entire complex, which he said is larger than needed for the 27 homes.

He contends there is no way for the city to measure and bill residents’ water usage without individual meters and that existing service incurs high fixed costs because of the water meter’s size. The homeowners group can’t claim responsibility until the unpaid bill is settled and the water metering is resolved.

According to a city site plan, “All water services to units shall be 1-1/2″ lines and installed at main per Baltimore city specifications. Meters will be 1″ and provided inside units by builder.”

City records show that when Richmond American transferred the homeowners association to resident control on Oct. 29, 2018, the outstanding bill at the time, dated Aug. 22, 2018, showed an unpaid balance of $128,184.27. The latest water bill for the property, dated Dec. 27, 2019, shows a balance of $198,460.76.

When McGraw contacted officials at the city’s Department of Public Works, he was told they couldn’t help him with an account in another entity’s name.

Matt Garbark, acting director of the public works department, said it is common for new housing projects around existing development to be built with a larger water pipe, such as the master meter at Hampden Square.

Such compound meters often are designed with a low side to serve residences and a high side that diverts water to fire hydrants and home sprinklers. The infrastructure fee, included in the bill with water and sewer service, is higher for larger meters, which has contributed to the total bill at Hampden Square.

Master meter accounts are initially in the name of whomever owns the parcel. But it would be up to that owner to alert the city of a sale and provide legal documents to transfer the account, Garbark said. Sub-metering to individual homes is not done by the city, but could be done by a developer, which some choose to do.

He said the department is investigating what happened at Hampden Square, a situation that is complicated by the coronavirus pandemic, during which the city has suspended collection efforts on delinquent bills. Meanwhile, the charges have accumulated.

McGraw said homeowners worry that their metering and billing problems could grow into something much bigger, as was the case with the Ritz-Carlton Residences at the Inner Harbor, where it was reported in fall 2019 that condominium owners hadn’t paid for water service in more than a decade. In that case, the city hadn’t collected $2.3 million in water payments since the nearly 200-unit condominium complex first had its water meter installed in 2007.

In March, an ongoing audit of the city’s water billing system ordered by then-Mayor Bernard C. “Jack” Young found nearly 800 accounts or addresses requiring further investigation to determine if they were properly paying for water, including 240 locations that may never have been billed. The city announced in November that the investigation found five of 200,000 water accounts should be referred for further investigation, but “no systemic issues related to the placement of water meters at properties within the City.”

A report released last month by inspectors general in Baltimore City and Baltimore County said both jurisdictions have lost millions of dollars in water and sewer revenue due to a dysfunctional system. It said problems persist despite officials spending more than $133 million in the last decade to fix them. The report found that tens of thousands of digital water meters in both the city and county are not fully functional.

It’s unclear whether the issues at Hampden Square stem from a larger water system dysfunction. Democratic Mayor Brandon Scott has directed his administration to fix the system, a spokesperson said Thursday.

“Fixing what’s broken in the water billing system is a top priority for the mayor, second only to building a safer city and navigating the present public health pandemic,” said Stefanie Mavronis, the spokesperson.

Besides the water metering, homeowners at Hampden Square also complained about stormwater deficiencies. The homes share a courtyard with a stormwater management system. Residents say the water flows away from stormwater drains, toward lawns. Site plans show the path was placed on the wrong side of one drain.

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A civil engineering firm hired by the homeowners confirmed the water metering and stormwater problems. The firm found the water bill’s infrastructure charges alone, based on larger meter size, account for nearly $4,000 a month.

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Richmond American began marketing Hampden Square’s two- to- five-bedroom homes for sale in early 2016, touting Hampden’s local shops and restaurants and the proximity to Johns Hopkins University and the Inner Harbor.

As owner and developer, Jackson had demolished a warehouse, subdivided the property and prepared building sites. Part of that work involved installing a master water meter.

But Jackson said the builder was responsible for building a sub-meter system that would measure water usage for each home. He also installed stormwater management, but said the builder is responsible for coordinating sidewalks, landscaping and grass with an existing stormwater system.

Richmond American built a first group of townhomes, then paused the project for at least a year.

Jackson said he became involved again after the property was completed and homeowners began having workmanship problems with construction. He said he sent a construction crew at his expense to fix issues with stormwater management. He learned about a year ago that the water bill remained in Cairnes Lane’s name.

Garbark said the developer, builder and homeowners need to work out whose name should be on the account and who pays what.

“Whoever’s name is on it, if it is transferred, they would then be responsible for the entire amount,” he said.

The situation concerns Keisha Allen, co-founder and chair of the Westport Community Economic Development Corp. Allen has been among Westport residents working with Jackson as he develops the South Baltimore waterfront.

Earlier this month, Stonewall proposed adding more public green space and walkability in its Westport design plan. The developer, working with Morris & Ritchie Associates, purchased the 43 acres of land from Under Armour founder Kevin Plank in October, and in December proposed adding 1,300 residential units.

Allen said she shared the Hampden Square association’s concerns with members of her group’s board.

“My concern is not so much what happened as it is how Mr. Jackson and his team will resolve the outstanding issues with the residents of Hampden Square,” Allen said.

Jackson said he wants to work with the Hampden homeowners, the city and Richmond American to resolve the problems.

“It needs to get done in a mutually beneficial fashion,” Jackson said. “Everyone needs to come to the table and get it resolved.”

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