Maryland Gov. Larry Hogan said Tuesday the state will move forward with a formal bidding process to redevelop the long-stalled State Center project in Baltimore ― and begin relocating state workers to prepare for demolition.
The governor made the announcement despite ongoing litigation over Hogan’s effort to remove the developer long contracted by the state for the project. Hogan called himself “frustrated” by the lack of progress at the site.
“Our repeated efforts to get this project moving for the citizens of Baltimore have been delayed over and over again by a group of developers and lawyers motivated by greed who have been seeking to extort state taxpayers,” Hogan said at a morning news conference at the Midtown site. “The Attorney General’s office has recently advised that we are now free to take the next steps.”
The governor was repeatedly cheered by state workers gathered at the announcement.
Hogan said the 3,300 state employees from 12 agencies working at the site will be relocated in phases, beginning with the Maryland Department of Labor. Hogan pledged all workers would remain in Baltimore City, and told state agencies to begin looking for other commercial office space.
“The current plan is to move the offices to downtown," Hogan said. "It’s not a plan to keep all of the agencies here.”
The current developer of the project, Baltimore-based Ekistics, operating under the name State Center LLC, has been planning a $1.5 billion redevelopment that included new offices for hundreds of state workers, residences and shops.
Michael Edney, attorney for State Center LLC, called Hogan’s move illegal. He said the developer has exclusive contracts with the state that prevent other builders from working on the project and the relocation of Maryland employees.
“Today the Governor announced the hollowing out of State Center," Edney said in an email. “By transferring every government agency out of State Center forever, he has broken the State’s decades-long commitment to the surrounding communities and to the City not to do so.”
The developer’s lawyer called the governor’s announcement a “surprise” move and noted it came just days after a judge hearing the lawsuit in Baltimore City Circuit Court ordered the Hogan administration to turn over certain documents to the developer.
“The Governor is long on details for cleaning out State Center, but short on any description of the future,” Edney said.
The announcement could set up a scenario in which the Hogan administration selects a new developer while State Center LLC still has a contract to rebuild the site. Hogan said Tuesday he was not concerned the current developer would win in court.
“The judge handling the case stated recently there was no chance of that happening,” Hogan said. “The attorney general has advised us we are well within our rights to move forward.”
Raquel Coombs, a spokeswoman for Attorney General Brian Frosh, said Frosh advised Hogan that the governor could move forward with relocating employees.
“The State is free to solicit expressions of interest, move employees out of the buildings, and even raze the buildings with little risk of being enjoined from doing so," the Attorney General’s office wrote in a letter. "Although proceeding with redevelopment of the site would involve greater risk, we still believe it is likely that those proceedings would be resolved in our favor.”
For more than a decade, state officials have planned an overhaul of the government office buildings and adjacent properties that span 28 acres near Eutaw Street and Martin Luther King Jr. Boulevard. The planned offices, apartments, condo tower and grocery store near light rail, Metro and train services would create a strong option for people looking to move to Baltimore, proponents say.
Conceived in 2004, the redevelopment plan called for building new offices for state employees as well as residences and retail space over 15 years.
But 15 business owners backed by attorney Peter G. Angelos, who owns office buildings downtown, sued the state and the developer in 2010, contending the deal was unlawful and did not follow Maryland’s competitive bidding requirements. That lawsuit was thrown out eventually, but it stalled the project for years.
Ekistics argued the state’s actions were politically motivated. The developer was hired under former Gov. Martin O’Malley, a Democrat.
Last year, the Hogan administration officially launched a do-over for the stalled project. The Maryland Stadium Authority and the Maryland Department of General Services issued a request for expressions of interest in the project seen as key to economic growth on the west side of the city.
That process attracted interest from eight developers.
Hogan said Tuesday that relocating workers would help fill vacant office space at other locations in Baltimore’s central business district. Hogan called the move a “dramatic boost to help stabilize downtown Baltimore.”
House of Delegates Speaker Adrienne A. Jones said Hogan didn’t speak with legislative leaders before announcing his plan. She said she has many questions about the governor’s move.
“I’m surprised to hear it,” Jones said. “I’m curious, why now? Why wasn’t the community involved? There was no reference in terms of cost. I feel for the community. We need a solid anchor for West Baltimore.”
The Democrat-controlled General Assembly passed legislation last year in an effort to ensure community involvement in new plans for State Center. The legislation required a community benefits agreement and local hiring. It also urged continuing with plans that call for a mixed-use development that houses state agencies and includes a grocery store.
But John Kyle, a Bolton Hill resident and co-chair of the State Center Neighborhood Alliance, said Tuesday the Hogan administration has not involved community groups in his plans.
“I’m disappointed there’s no community involvement. It looks like it’s a loss of state employees at the site,” Kyle said. “It’s wasteful of the 15 years the community has put into coming up with good ideas until this administration and the developer had a falling out. We in the neighborhoods are the victims of all this.”
The governor said Tuesday there would be a lengthy process to select new locations for employees and a new developer.
“It’s going to take quite a while,” he said. “My goal is to move as expeditiously as possible.”