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Legal battle between Ed Hale and city could cost Baltimore taxpayers more than $3M

Legal battle between Ed Hale and city could cost Baltimore taxpayers more than $3M
City officials are appealing a judge's ruling awarding businessman Edwin F. Hale Dr. $3.6 million for the use of billboards at Royal Farms Arena. (Algerina Perna, Baltimore Sun)

A legal battle between prominent businessman Edwin F. Hale Sr. and the city of Baltimore is headed to the state's second-highest court — with city taxpayers potentially on the hook for more than $3 million.

At issue is whether the operators of Baltimore's Royal Farms Arena are improperly using billboards that belong to Hale, a developer, former CEO of First Mariner Bancorp and the owner of the Baltimore Blast soccer team.

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A Baltimore County judge has ruled in favor of Hale — saying the city had no right to commandeer billboards he owned in the arena — and awarded the businessman a $3.36 million judgment. City officials are appealing the ruling to the state's Court of Special Appeals.

City lawyers Kurt Heinrich and Steven Potter argue that Hale forfeited his right to nine billboards on the outside of the arena — which generate thousands of dollars in income annually — when he did not remove them after losing a contract to conduct advertising at the arena through a city bidding process.

Hale "took no action to remove the billboards, has no plan to remove the billboards, and no intention of ever removing them," they wrote in their brief to the appellate court.

But Hale's attorney argues that Baltimore County Circuit Judge Mickey J. Norman got it right when he awarded Hale $3.36 million earlier this year to cover anticipated billboard revenue through 2022.

"Mr. Hale did not abandon them," Norman said of the billboards, according to a court transcript. "The evidence is clear in this case that ... he made it clear ... that he was the owner of those billboards."

The Court of Special Appeals is expected to take up the case in December.

Hale had initially sought $5 million in a lawsuit that named as defendants arena operator SMG Holdings of West Conshohocken, Pa., and the advertising firm that replaced him at the arena, Legends Sales and Marketing of Wilmington, Del.

SMG has run the city-owned arena since 1999. City officials declined to comment for this article, as did Frank Remesch, general manager of Royal Farms Area.

Hale's attorney, Ramsay M. Whitworth, a partner in the firm Silverman, Thompson, Slutkin, White, has argued that it was widely known that the billboards belonged to Hale and not the city.

"All of the witnesses who came to court admitted that they knew and believed that Ed Hale and Arena Ventures actually owned those billboards; that includes even employees of the city and SMG managers," Whitworth said.

In late 2012, according to the suit, SMG informed Hale that that he would no longer have any right to sell advertising at the arena. Instead, SMG was hiring Legends to sell advertising, the suit states. As a result, Hale's company has suffered "loss of advertising revenue" and its reputation has also suffered, according to the suit.

The suit is Hale's latest clash with city officials.

In 2013, citing a soured relationship with city government, Hale announced that he was moving his businesses — the Baltimore Blast Corp. and Hale Properties LLC — to Baltimore County and that the Blast would no longer practice at the Clarence H. Du Burns Arena in Canton, which Hale used to manage.

"I've been around for 43 years, employing thousands of people," Hale said at the time. "I love the city, but after 43 years, I'm gone. I didn't want to leave, but they didn't care about us staying. I moved all my businesses out of the city and into the county."

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In August, Hale announced that the Blast would be ending their longstanding relationship with Royal Farms Arena for a newer facility. They would play the 2017-2018 Major Arena Soccer League season at Towson University's SECU Arena, he said.

"Even though this was something he never wanted to do, given that he's a Baltimore native, he found an incredible opportunity to partner with Baltimore County," Whitworth said.

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