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Baltimore judge dismisses Clipper Mill developer’s lawsuit against residents who spoke out against more housing

A Baltimore Circuit Court judge has dismissed a $25 million “bad faith” lawsuit that the developer of Clipper Mill filed against condo and townhouse owners in the community who spoke out against plans to build more homes.

VS Clipper Mill LLC’s lawsuit argued that residents and their homeowner associations gave up their legal right to oppose future plans for the Woodberry development along the Jones Falls when they bought their homes. The lawsuit said residents are bound by restrictive covenants in land records.

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But in a court order dismissing the case, Circuit Court Judge John S. Nugent questioned whether the lawsuit was filed in retaliation for residents opposing development plans.

The lawsuit was brought in bad faith, “for purposes of intimidating defendants from objecting to development plans,” Nugent wrote in a Nov. 23 order made available Wednesday to parties in the case.

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ValStone Partners, the project’s developer since 2017, plans to continue redevelopment of the enclave of once-industrial 19th century buildings with plans for new townhouses, an apartment building with parking in the shell of a former mill building, and an adjacent parking garage. Some residents have protested those plans before the city Planning Commission and appealed in court.

Larry Jennings, ValStone’s co-founder and senior managing director, could not be reached Wednesday. In an August interview with The Baltimore Sun, Jennings called opponents to his plans “obstructionists” and said most of the residents support the plans.

His lawsuit argued 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.

But Nugent found that the developer’s complaint violates Maryland’s anti-SLAPP statute, which protects individuals or groups against Strategic Lawsuits Against Public Participation. The law defines such lawsuits as brought in bad faith against those exercising First Amendment rights to challenge or oppose public matters, often before a government body.

“As of right now, they’re just relieved,” said attorney Thomas J. Minton, who represents condo residents named in ValStone’s lawsuit.

Opponents 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 into a mix of upscale homes, shops and offices, now anchored by the popular Woodberry Kitchen restaurant.

The judge described Clipper Mill’s request for $25 million in punitive damages as disproportionate to the harm it said it was caused and said the developer served “abusive discovery requests” along with the lawsuit, including requesting personal banking records of all defendants dating to January 2015.

“The essence of VS Clipper Mill’s position is that defendants breached the Clipper Mill Community Declaration by opposing the proposed development,” Nugent said. But defendants did not act on behalf of the association, and “they were not prohibited from opposing the development plans and certainly cannot be deemed to have waived their constitutional rights.”

The case appears to be the first reported state case analyzing Maryland’s SLAPP statute, though the issue has been addressed in federal court, the judge’s order said. Maryland is among a number of states with anti-SLAPP laws, with legislation passed in 2004.

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

Jennings was recently named as a member of Baltimore Mayor-elect Brandon Scott’s transition team, as part of his Housing & Neighborhood Development group.

At Clipper Mill, ValStone wants to build 30 three- and- four-story townhouses on what is known as the Poole and Hunt site, now a parking lot. 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.

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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.

Nugent questioned the timing of ValStone’s lawsuit, filed at the end of June against two community associations and five residents and accusing them of waging an illegal campaign to obstruct development plans, costing the developer millions of dollars in delays and expenses.

The judge noted that the lawsuit was filed just five days after the Circuit Court said it would return the townhouse case back to the Planning Commission, after 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.

“This suggests that VS Clipper Mill was retaliating against defendants for their opposition before the Planning Commission,” the judge wrote.

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