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State Center decisions to be left to Hogan

Baltimore, MD -- The State Center complex in the early evening as workers leave their offices. Amy Davis [Sun Photographer]
Baltimore, MD -- The State Center complex in the early evening as workers leave their offices. Amy Davis [Sun Photographer] (Amy Davis / Baltimore Sun)

Decisions about the future of the $1.5 billion State Center project In Baltimore will be left to Gov.-elect Larry Hogan, the O'Malley administration confirmed Monday.

Administration officials have decided not to seek approval of a revised development contract for the project at Wednesday's meeting of the Board of Public Works, according to the Department of General Services. Because that is the last meeting for Gov. Martin O'Malley, decisions about State Center will be left to Hogan and his appointees.

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A spokesman for O'Malley emphasized that the Democrat remains a supporter of the mixed-use redevelopment plan for the state's aging government office complex north of downtown.

"Governor O'Malley believes strongly in the project and hopes the next administration will move forward with it," said spokesman Ron Boehmer. Boehmer would not say why the administration decided to leave the issue to Hogan.

Hogan, a Republican, has been noncommittal about the future of the project, conceived under the administration of GOP Gov. Robert L. Ehrlich Jr. but supported both by O'Malley and Baltimore Mayor Stephanie Rawlings-Blake. The mayor said that during a recent meeting with Hogan, she emphasized the importance of the 28-acre project to the city.

A spokesman for Hogan, who takes office Jan. 21, said Monday that the governor-elect had no comment on State Center.

The mayor's office released a statement Monday expressing hope the project will continue.

"It is imperative that we do something with the space; it is too big of an area to only be active 8:30 to 4:30, Monday through Friday," Rawlings-Blake said. "This transformational venture will help retain more jobs, spur private investment, and better connect our neighborhoods through existing transportation infrastructure."

Legislative analysts recently raised concerns about the state borrowing required for the project, and a key state Senate committee wrote a letter to the Board of Public Works urging it to delay action. The senators said they wanted time for state auditors to analyze whether the project would push the state over its self-imposed debt limits.

The board's three members are the governor, Comptroller Peter Franchot and Treasurer Nancy K. Kopp. Franchot opposes the State Center project as currently proposed. Deputy Treasurer Susanne Brogan said Kopp supports the project but shares the senators' worries about debt affordability. Brogan said Kopp discussed her concerns with O'Malley.

There is widespread agreement that the current State Center office complex, built in the 1950s and 1960s, is obsolete. City officials and nearby residents complain that the area turns into a ghost town at nights and on weekends when state workers aren't there. Plans for the site include residential and commercial development as well as offices, with all served by the multiple transportation lines that converge on State Center.

However, plans to redevelop the area have been mired in arguments and litigation for years.

Downtown property owners, notably lawyer and Orioles owner Peter G. Angelos, contend that the project would unfairly compete with their buildings for state agency tenants. The downtown interests succeeded in delaying the project for four years with the help of a favorable ruling in January 2013 by a Baltimore judge, but the Court of Appeals overturned that decision last year.

A lobbyist for Angelos welcomed the decision to defer action until Hogan takes over. "The project still cries out for proper development and something needs to be done at State Center," said lobbyist Gerard E. Evans. "This was not the proper way to go about it."

Evans said Angelos would like to see a new competition for State Center redevelopment.

"We're hoping to help the Hogan administration any way they see fit," Evans said.

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A key point of dispute in the litigation was a contention by the downtown group that the O'Malley administration hand-picked a developer without having gone through a competitive bidding process.

After the appeals court ruling, the state and the developer negotiated a modification to their existing contract to reduce the size of a parking garage to contain costs for the project's first phase. It was that change that gave opponents — including the long-skeptical legislative analysts — a new opportunity to take aim at the project.

Steve Cassard, State Center project director for the Maryland Economic Development Corp., noted that the developer, Ekistics LLC, still has a board-approved contract to develop the site with the larger parking garage.

"The developer's intent is to move forward," Cassard said. However, he noted that the developer would need approvals from the Department of General Services before proceeding.

On Jan. 21, that department will become part of the Hogan administration. Ekistics officials did not return calls seeking comment.

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