City Abandons Appeal In Market House Case

Annapolis Blocked From Collecting Rent

Annapolis has dropped its appeal of a decision by an Anne Arundel County Circuit Court judge who temporarily prevented the city from collecting rent from the company that manages the Market House at City Dock.

The dropping May 20 of the city's appeal to the Maryland Court of Special Appeals will not directly affect the lawsuit that Market House Ventures filed against the city for failing to install a new heating and air-conditioning system at the historic building. The company says the system has been inadequate since tenants first leased space, in April 2006.

"I guess we're basically back where we started before the appeal," said Neil S. Hyman, the company's attorney.

The dropping of the appeal, however, means the lawsuit can be heard -- and possibly resolved -- much sooner in circuit court than if the city pursued a protracted appellate fight. And the city has told the management company that it will resume "reviewing proposals for new subtenants for the Market House," according to a letter released last week.

"It is a more than half-empty Market House in the busiest season," said Jonathan P. Kagan, a lawyer with Brassel Baldwin Kagan and May, an Annapolis law firm hired by the city to help with the case.

The city had been appealing a March 17 temporary order by Judge Pamela L. North, halting the city's collection of about $8,500 in rent for March. North said the city had "not installed a permanent HVAC system" and "may well be in default of the lease."

In dropping its appeal, the city said it "will continue to exercise its duty and authority to approve tenants at the Market House."

In December, Market House Ventures filed a $2 million breach-of-contract suit against the city, saying it had lost two tenants as a result of an inadequate air-conditioning system. Annapolis Mayor Ellen O. Moyer (D) has said the city was preparing to do the work when the lawsuit was filed.

Market House Ventures, a subsidiary of Site Realty Group of Silver Spring, charged in an amendment to the initial complaint that it has suffered additional damage because the city has failed to approve new tenants.

In 2005, longtime vendors left the city-owned building when Annapolis lured Dean & DeLuca, but the New York grocer backed out. Market House sat empty for almost two years until a dozen tenants arrived under the management of Market House Ventures.