Here's the good news: When Gov. Larry Hogan joined Mayor Catherine Pugh for a tour of the State Center office complex in Baltimore, the redevelopment plans for which he killed last year, he unequivocally committed to keeping the more than 3,000 state jobs now located there in the city. He discussed with the mayor ideas for redeveloping the site and made clear that he believes the state should be a part of that effort.
The bad news is, Mr. Hogan engaged in some serious revisionist history about the long stalled project, which was initially conceived by the Ehrlich administration in 2004. He blamed the developer, Ekistics LLC, for delaying the project “for a decade or so” and remaining “in the way.” That is patently untrue. Ekistics’ plans were blocked for years by litigation from downtown property owners led by Peter G. Angelos. The suit centered on the procurement process for the project, but the motivation was to prevent the development of a large-scale office complex that would compete with their properties, anchored by state agencies paying above-market rents.
What Ekistics was doing during all that time was patiently working with nearby community groups to tailor the project to their needs. The level of support they generated from a diverse array of neighborhoods around the site was truly impressive for any large development. When the Angelos litigation was dismissed, Ekistics was ready to build, but some of the economics had changed. The state and Ekistics renegotiated plans for a parking garage to reduce costs, which brought the matter before the Board of Public Works. Comptroller Peter Franchot objected to the deal outright, and Treasurer Nancy K. Kopp had questions about its effects on state finances, which was enough to prevent then-Gov. Martin O’Malley from moving forward before the end of his term.
Governor Hogan’s effort to misplace the blame for what happened matters because the key obstacle to coming up with a plan for the site is the litigation between his administration and Ekistics. The state sued the developer pre-emptively upon canceling the contracts, and Ekistics followed up with its own litigation. They need to come to a settlement before anything else can happen — a spokesman for the governor wouldn’t even hint at what Mr. Hogan has in mind for the site because of the litigation, and developing requests for new proposals is definitely out. Engaging in a war of words isn’t the most obvious way to bring the parties together.
During his tour of the site on Thursday, Mr. Hogan kept up his disdain for the O’Malley administration’s deal with Ekistics, describing it as a financial boondoggle for the state. We believe he underestimates the benefits and the costs of the status quo. The current State Center buildings are money pits that cost the state far more in maintenance than modern buildings would. Every year we go without replacing them means millions of taxpayer dollars wasted. Meanwhile, the cost of getting out of the deal is likely to be substantial. Aside from the legal costs, Ekistics has a solid claim that the government needs to provide it recompense for the money the company spent in a good faith effort to execute a contract with the state. Ekistics officials estimate their outlays to date in the tens of millions of dollars.
If Governor Hogan can provide a better deal for the taxpayers, we’re all for it. But he needs to come through with a redevelopment of the site that provides the same level of benefits to the neighboring communities that the original plan did, he needs to secure a permanent home in Baltimore for the State Center employees, and he needs to do it fast. Between the costs of operating the antiquated buildings on the site and pursuing litigation, Mr. Hogan’s effort to save money is getting expensive. He needs to settle this matter and move on. If that means a new round of negotiations that allow Ekistics to build the project it planned, great. If that means a new public-private partnership, great. But we need less finger-pointing and more doing. Mr. Hogan is up for re-election next year; voters should demand he have a plan in motion before then.
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