More than a decade ago, as Maryland Gov. Martin O’Malley’s administration finalized a deal with a developer on a $1.5 billion rehabilitation of Baltimore’s State Center complex, neighborhood leaders had a seat at the table.
The 1950s-era office complex stands at the intersection of multiple neighborhoods — Upton, Mount Vernon, Midtown, Bolton Hill and McCulloh Homes to name a few. Through the formation of an advocacy group and the eventual approval of a community benefits agreement, residents banded together behind the project, which included new offices for thousands of state workers as well as residences and shops on the 28-acre site.
John Kyle, a Bolton Hill resident involved in the discussions, said the process was difficult. But residents with diverse backgrounds and interests found they had more in common than expected, he said.
That made it all the more disappointing when plans for the redevelopment stalled and then were shelved. In 2016, Republican Gov. Larry Hogan canceled the proposed development and the Board of Public Works voted to invalidate the leases with developers. Hogan cited slow progress and runaway costs, and said the deal did not make sense.
In April 2021, Hogan announced that the state would move the thousands of state employees who work in the aging complex to office space in other parts of the city, particularly downtown.
So it was with a mix of skepticism and hope that Kyle greeted this week’s announcement by Lt. Gov. Boyd Rutherford that the state of Maryland intends to hand State Center to the city for future redevelopment. Rutherford, a Republican, shared the news Wednesday during a Board of Public Works meeting in Annapolis.
“I’m hopeful Mr. Rutherford’s words are true and good,” Kyle said. “But it’s an empty present. It’s hollowed out, and it will cost more to make it work now than it did five years ago when that developer was willing to take it on.”
“The city already has significant challenges,” Kyle added. “This is another one.”
Following the announcement, Democratic Mayor Brandon Scott said his administration is open to coordinating with Hogan as well as the state’s next governor and community and elected leaders to develop a plan for the site.
“The surrounding communities and the entire city deserve a State Center site that lives up to its full potential,” he said in a statement released Wednesday.
Demolition costs a top concern
But Scott also acknowledged there are challenges that remain for the property, including funding what is likely to be the substantial cost of demolition. Officials with the mayor’s administration said Thursday that state funding would be needed to make the deal viable.
Michael Ricci, a spokesman for Hogan, said it’s “too early to say” whether the state would consider footing the bill. Discussions with the city are ongoing, as is the process of moving state agencies to other office space, Ricci said.
The state intends to declare State Center as surplus property, which would allow the city to claim it, Rutherford said this week.
Getting adequate funding to demolish the property will be critical to the city’s success with State Center, said Bill Cole, former president of the Baltimore Development Corporation, the city’s economic development agency. Without it, the deal makes no sense, he said.
Cole said the best treatment for the site still involves a mix of uses, but the office space-heavy proposals of the past are less viable. The availability of transportation on the site — it boasts access to light rail, Metro and train service — would support some office uses, but the pandemic has changed the market for office space, he said.
Developers are more likely to favor a residential use for the site with a mix of retail, Cole said. Surrounding residents have long lobbied for a grocery store, he noted. Cole said he also would like to see some open space on the site to help connect future developments with surrounding neighborhoods.
“It’s definitely a residential site,” Cole said. “The question is how dense and how do you make it fit with the surrounding communities?”
Kyle said residents will continue to advocate for a grocery store on the site. Much of West Baltimore remains a food desert, he said. Residents also have advocated in the past for development that knit the surrounding neighborhoods together — a walkable mix of stores, restaurants and apartments where people from all directions could converge, he said.
Litigation another concern
Demolition costs for the aging buildings site aren’t the only challenge faced by city officials. Litigation has repeatedly mired progress on the site.
The 2009 deal, inked by O’Malley, a Democrat, stalled for years after a group of downtown landlords sued the state and the developer in 2010, contending the deal failed to follow Maryland’s competitive bidding requirements. Eventually that lawsuit was thrown out.
In 2016, after Hogan canceled those development plans, the state and the developers sued each other, again slowing the process even as the state sought a new developer and made plans to move the workers to new offices in other buildings.
Late last month, a Baltimore City Circuit Court judge ruled the Board of Public Works was within its right to terminate leases granted to the first developers. The judge also denied a motion asking the state to pay $12 million to the developer. The case, however, remains active, according to court records.
Maryland Policy & Politics
M.J. “Jay” Brodie, also a former president of the Baltimore Development Corporation, said clearing legal hurdles will be critical before the city can consider the next steps for the property.
But the opportunity to treat the site as a blank slate, rather than needing to house state employees, could be a positive for city officials, Brodie said.
Like Cole, Brodie envisions a mixed use involving predominantly housing with some retail space. He cautioned that retail uses should be carefully studied first.
“There’s nothing that has changed more than retail,” he said.
Brodie said he would like to see housing that is “Baltimore dense,” as opposed to “New York City dense.” He suggested four- to five-story residential buildings akin to those that have been built in Canton and along Key Highway.
The city should consider requiring bidding developers to submit both design and economic plans to ensure that officials and residents “aren’t just falling in love with a pretty picture,” he said.
“It’s an exciting moment for the city,” Brodie said. “Someone asked me the other day what’s new and exciting in Baltimore. I said, ‘I’m not sure where there’s enough space to have a new exciting project,’ but State Center is it.”