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Developer says he had no role in 'forged or altered' tax credit document

City officials say a document was 'forged or altered' to make it look as though 25 new units in this building were eligible for a historic tax credit.
City officials say a document was 'forged or altered' to make it look as though 25 new units in this building were eligible for a historic tax credit. (Kenneth K. Lam / Baltimore Sun)

The developer of a Little Italy condominium project says he had nothing to do with a document the city calls "forged or altered" that resulted in $2.1 million in erroneous tax credits for the building.

Union Box Co. developer Larry Silverstein said in a phone interview it is "impossible" that he could have tricked the city into awarding unwarranted credits for his Canal Street Malt House project. He said the error likely originates in state government.

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"Our position is this is an error of the State Department of Assessments and Taxation," Silverstein said. "We only received documents from the city. We never sent them documents. We don't see how it would be logically possible to persuade both the city and state to grant this credit and make the calculations for these credits. We have nothing to do with that aspect of the process."

City officials are investigating how a document was allegedly changed to look as though 25 new condominiums were eligible for a credit reserved for the renovation of historic buildings. But Baltimore Solicitor George Nilson has said it's clear the city or state didn't do it.

"It was the fault of private parties, not the government," Nilson said last week. "We think the government was a victim, not a perpetrator."

In 2006, city officials correctly awarded tax credits to 13 condos that were part of the renovation of the historic malt house at 1220 Bank St. But they improperly awarded the credits to the 25 new condos built as part of the project.

A three-member city review panel concluded in its report that a "forged or altered version" of a city certification letter "removed/erased" original language that made clear the credit was for the 13 units in the historic building, "thus leaving the reader to assume that the credits applied to all thirty-eight (38) units."

Some residents of the Canal Street Malt House — 25 of whom now face higher property tax bills of roughly $10,000 a year each — say they don't buy city officials' statements that they were tricked into awarding the credits.

"I don't believe the developer did it," said condo owner Michael Jackson, 66, who will have to pay about $30,000 more in taxes over three years. Jackson provided The Baltimore Sun letters from state officials in 2006 assuring individual residents they had been awarded credits. "Why should we pay to fix the city or state's mistakes?" he asked.

The discovery of the discrepancy came as the city was preparing to pay up to $3 million to owners of historic properties whose tax bills in coming years will be higher than what government officials told them to expect. The committee was designed to make right the chronic miscalculations in the historic property tax program by awarding payments to aggrieved residents. Officials now say that, with payments ruled out for the 25 Canal Street owners, only about $100,000 in such payments will be warranted citywide.

Former Canal Street Malt House condo owner Robert Crandall, 57, said he had to sell his unit "quickly, at a loss" because of the spiking tax bills.

"The whole thing has been so upsetting," he said. "When I bought it, there was definitely a 10-year tax incentive included in it. Suddenly that was taken away."

The city should continue to pay the final three years because the government agreed to the deal years ago, Crandall argued.

"It's the city's responsibility to make sure all the paperwork is done correctly," he said. "Whether they were victimized or not, they are now victimizing us."

Owen Charles, a deputy director at the state's Department of Assessments and Taxation, said he does not believe the problems stem from his office.

"I really, truly do not know what the source of the document was," Charles said. "There would have been no reason for anyone in the office to alter that document."

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Kevin Harris, a spokesman for Mayor Stephanie Rawlings-Blake, said the mayor wants to know why it took city and state officials seven years to catch the problem.

"The people who were handling these documents, who knows where they are now?" Harris said. "Who knows if they even remember handling this piece of paper?"

He added the city is still investigating the matter.

"If we find activity where it's appropriate forward it to a prosecutor, then we will," Harris said. "We haven't made that determination."

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