State Center foes argue state lawsuit violates their rights

Opponents of the $1.5 billion State Center project asked a Circuit Court judge Wednesday to dismiss the state's legal action against them, arguing that they have a First Amendment right to go to court to protest plans to redevelop the aging government office complex in midtown Baltimore.

More than two hours of arguments by attorneys from both sides ended without a decision by Baltimore Circuit Judge Althea M. Handy.


"We're allowed to object, and we're allowed to say we don't like your project," Alan M. Rifkin, an attorney for the redevelopment's opponents, said in his arguments.

The opponents, a group of downtown property and business owners who filed a lawsuit against the project a year ago, are seeking to dismiss a counterclaim filed in September by the Maryland attorney general's office.


The state counterclaim seeks $100 million from plaintiffs for increased costs of construction, financing and building maintenance as a result of delays in the planned transit-oriented development, to be built along Preston Street over 15 years.

Under the plans, first proposed a decade ago, the state would work with a private developer to replace outdated government buildings with apartments, shops and offices leased to state agencies.

Assistant Attorney General Campbell Killefer said the state filed its counterclaim as a response to "sham" litigation and "disinformation" designed to derail the project, a situation that he said posed a "clear and present danger" to the state's public process for development projects.

"They crossed the line," Killefer said of the State Center redevelopment opponents. "They filed sham litigation for the purpose of killing the project. Sham litigation is not protected."

He urged the judge to deny the opponents' motion, which he said would allow the State Center project to get back on track.

Two of the plaintiffs in the opponents' December 2010 lawsuit — landlords for St. Paul Plaza Office Tower and 301 Charles Street — reached a deal with the state a day before Wednesday's hearing. They withdrew from the lawsuit in exchange for the state's agreeing to dismiss claims against them, court documents showed Wednesday.

Continuing the lawsuit are nearly two dozen plaintiffs, including office building landlords, small businesses and restaurants, most of them located in downtown's commercial core.

During Wednesday's hearing, Rifkin said at least one plaintiff was backing out because of the state's counterclaim, which he said violated a law forbidding "strategic lawsuits against public participation."


"The real purpose of that counterclaim is to silence these plaintiffs and to intimidate them into withdrawing" their support, Rifkin said, adding, "It's a fundamental constitutional right … to petition government without retribution."

The opponents' lawsuit accuses the state of using a noncompetitive process to choose developers and says a redeveloped State Center would unfairly compete with office and other commercial buildings in downtown's core, which has been struggling with high vacancy rates.

In July, Handy denied the state's request to dismiss the case.

Despite the legal wrangling, the state and the project's private development team are committed to getting a new State Center built, said Caroline G. Moore, chief executive officer of Ekistics, the project's lead developer, after Wednesday's hearing.

She also said the project's legal troubles were keeping developers from being able to pursue private financing.

The administrations of Gov. Martin O'Malley and Mayor Stephanie Rawlings-Blake have backed the State Center project as a way to provide much-needed office space for 3,500 state agency employees and to return state-owned land to Baltimore's tax rolls. They also seek to create jobs and reconnect several historic neighborhoods that are now separated by the outdated, 1950s-era buildings.


"It's a great time to do the project," Moore said. "It's a shame this is taking as long as it is to resolve."