A state appeals court this week dealt a blow to Baltimore County Executive Kevin Kamenetz's plan to sell an old government center in Dundalk to a developer to transform into a shopping center.
The Maryland Court of Special Appeals ruled Wednesday that the deal needs approval of top state officials — a step Gov. Larry Hogan has not been willing to take.
Kamenetz contends that redeveloping the government center will offer an economic boost for Dundalk.
Ellen Kobler, a spokeswoman for the county executive, said after the court ruling: "We remain hopeful that the Board of Public Works will do its job and approve the project."
Kamenetz decided in 2012 to sell the North Point Government Center at the corner of Merritt Boulevard and Wise Avenue, as well as two other county-owned properties, to private developers. Vanguard Commercial Development, a Baltimore-based firm that develops shopping centers and drugstores, submitted the winning bid for the government center.
Vanguard would pay $7.6 million to the county in a combination of cash, a payment plan and forgoing future tax credits. The company has envisioned a mixed-use project called Merritt Pavilion that would include medical offices, retail stores, casual restaurants and a gas station.
The deal faced opposition, first from residents who didn't want the government and community center turned into a retail project, and later from Hogan and Comptroller Peter Franchot.
State officials say selling the property to a private company requires approval of the state Board of Public Works because the government center was once a junior high school — and because the state issued bonds to build that school.
Vanguard challenged that position in court, saying the state shouldn't have a say in the matter, and Baltimore County supported that argument. Earlier this year, a Baltimore County circuit judge agreed, ruling the Board of Public Works approval was not needed.
But the Court of Special Appeals' 45-page opinion reverses that decision.
"The regulation requires Baltimore County to seek and obtain the approval of Board of Public Works before disposing of the former school property … the Board of Public Works may approve, disapprove, or conditionally approve the request to dispose of the former school property," Judge Kevin F. Arthur wrote for the court.
Representatives for Hogan and Franchot, who hold two of the three seats on the Board of Public Works, say the government center sale is not likely to be approved as currently proposed.
"The governor will not support a scheme that was hatched behind closed doors and is opposed by the vast majority of Dundalk residents," Hogan spokeswoman Amelia Chasse said in a statement. "If the county wants to move this project forward, they will do what the Board of Public Works recommended over a year ago and develop a new plan with input from the local community."
Peter Hamm, a spokesman for Franchot, said the county "needs to approach the potential development of the North Point Government Center property in a more inclusive and transparent manner than it has in the past."
Even as the sale has been tied up in the courts, the county has moved most of its offices out of the government center, including a police precinct and a County Council office. Community groups still use the facility. The county has pledged to build a smaller replacement community center elsewhere on the property after the government center is torn down.