Baltimore officials awarded a demolition contract at the site of a proposed slots casino without public bidding, drawing concern from the city comptroller and the head of a contracting association.
Rather than advertise the work as required for most city projects, the Baltimore Development Corp., the city's development arm, approached a handful of demolition firms and asked them to provide prices to knock down the Maryland Chemical building on Russell Street. The agency also sought estimates for a second project using the same selective method, to raze city-owned warehouses currently occupied by a nonprofit architectural salvage firm on Warner Street.
"We got an estimate from three to four companies," for each contract, said Kimberly Clark, the executive vice president of BDC. "You know the companies that are going to apply," Clark said.
The demolitions will help clear the way for a proposed $212 million slots palace near M&T; Bank Stadium, a project that city and state officials are banking on to bring in new revenues and help lower the property tax bills of city residents.
The demolition costs will eventually be reimbursed by the developers of the slots facility if the state awards a license to the sole applicant for the city casino, a company called the Baltimore City Entertainment Group, headed by Canadian builder Michael Moldenhauer.
City Comptroller Joan M. Pratt, who sits on the five-member Board of Estimates panel that approves city contracts, says she believes the best way to seek work is by issuing a request for proposals. "An open process allows for more competitiveness and allows for the City of Baltimore to get better service at the best price," Pratt said.
"If it is not a process that allows everyone who is qualified to bid, and there is a list of selected sources that are being used, then [new] vendors will not waste their time with inquiries," Pratt said.
Arnold Jolivet, the managing director of the Maryland Minority Contractors Association, criticized the process - even though the Maryland Chemical demolition was awarded to an African-American owned firm that he called "well qualified."
"We should all be able to get a chance to bid in this city," Jolivet said.
The Baltimore Development Corp. can circumvent the regular bid process for demolition if a building presents a threat to public safety, said city solicitor George Nilson.
"You don't want people wandering around in buildings that you now own," Nilson said. The agency "thought it was important to get it demolished very quickly."
It took seven months from the time the development corporation obtained prices for the Maryland Chemical demolition to when P&J; Contracting began knocking it down in April.
Clark said the Maryland Chemical building presented a safety concern. "A level lot with a permanent fence around it is a lot safer than a vacant building," Clark said.
P&J; offered to do the work for $378,477. The company offered the lowest price of three that submitted estimates, according to documents reviewed by The Baltimore Sun.
David Berg, the head of one of the city's better-known demolition firms, the Berg Corp., was not asked to participate in the Maryland Chemical job.
"I would bid on any job, even a house," he said.
He was among a larger pool asked to seek the contract to knock down the warehouses, and offered the lowest price.
The development agency is currently evaluating five submissions, including Berg's, ranging from $266,930 to $379,885 to demolish the city-owned warehouses, according to a document reviewed by The Baltimore Sun. A $50 million garage to support the casino will be constructed there. The warehouses are still open and operating.
Jolivet has sued the city in the past over the way it awards contracts, and says the two demolition jobs are examples of the city's failing to follow its own rules. "If there is a culprit here it is the city, the Board of Estimates and the Baltimore Development Corp. They don't seem to have any respect for the charter," Jolivet said.
Jolivet pointed to Article VI, which requires contracts worth more than $25,000 to be advertised publicly.
Nilson, the city solicitor, said that a 1975 memorandum of understanding between the city and the development corporation includes the safety exemption. When the agency deems a building a threat to public safety, the agency obtains permission to award a contract from the head of the city's housing department, Nilson said.
Nilson said the public safety issues at the warehouses are "not as self-evident" as the potential threat presented by Maryland Chemical, but he noted that the process "has not moved to the final point."
When the development corporation started the demolition process last fall, the Maryland Chemical building was on land the city had promised to Samuel Polakoff of Cormony Development to build a "sportsplex" with Ravens linebacker Ray Lewis. The city had promised the land to them in "as is" condition, meaning the developer was responsible for removing buildings and preparing a site for construction.
Polakoff said he cooperated with the city in its efforts to knock down Maryland Chemical to "keep the project moving."
City development officials contacted firms in October and the city's Board of Estimates approved transferring money for the project during a Feb. 11 meeting. Last month, the land was turned over to Baltimore City Entertainment Group, which is seeking the slots license.
The city-owned warehouses have been occupied for the past five years by Second Chance, the nonprofit salvage firm. "I wouldn't call them pristine by any stretch, but I wouldn't call them a public safety risk," said Mark S. Foster, who runs the business. "If slots were not to have been forthcoming, it is likely we would have stayed here for another three to five years," he said, noting that one of the buildings set to be demolished has a new roof.
The city is requiring that Foster vacate all but two of the warehouses in the next couple of weeks, and he said that the structures may be riskier if they are standing empty.
Contractors were contacted in June to offer prices on knocking down the Warner Street warehouses. Five companies responded. Berg said that he has not heard from the city about whether he will be awarded the work.
Michael Cryor, the former state Democratic Party chairman who represents the slots group, said that the partners will repay the city for the demolition for both projects. "It will not be a burden to the city or the taxpayers," he said.
Estimates from firms asked to seek Maryland Chemical demolition
P&J; Contracting, $378,477
JLN Construction Services, $497,371
Potts & Callahan Inc., $511,000
Estimates from firms asked to seek Warner Street warehouses demolition
Berg Corp., $266,930
P&J; Contracting, $272,700
Potts & Callahan Inc., $296,185
K&K; Adams, $335,112
JLN Construction Services, $379,885