Maryland’s stadium authority will explore the possibility of building a professional sports arena at the site of a long-stalled redevelopment project in Baltimore after the state canceled its lease agreements for that project on Wednesday.
The Board of Public Works voted 3 to 0 to cancel plans for the state to lease office space in the proposed $1.5 billion State Center complex in midtown Baltimore, arguing that the deal no longer made financial sense and would cause the state to exceed its debt limit.
Gov. Larry Hogan (R), a member of the panel, said he would direct the stadium authority to quickly study alternative uses for the site, including a professional sports arena.
“The city leaders are as eager as I am . . . to move forward on a new path,” Hogan said. “We’ll get community input from stakeholders, and we will put together the best planning and development expertise available to design a new plan that does make sense.”
Michael J. Edney, a Washington-based attorney representing the developer, State Center LLC, said his client will sue the state if it does not follow through with the agreements it signed seven years ago.
“Should they not have a change of heart before the first week of January, we will sue them,” Edney said. “And I believe the lawsuit will be in excess of $70 million.”
Hogan rejected Edney’s request to address the board Wednesday, saying the panel could not discuss the matter with him while the threat of litigation loomed over the state.
State Center LLC had proposed a mixed-use development on the 28-acre site, which is home to mid-20th-century office buildings that accommodate thousands of workers, many of them state employees. The project would include offices, housing and stores, all close to public transit.
The company has exclusive development rights at the site for the next eight years under an agreement signed in 2009 during the administration of Gov. Martin O’Malley (D). The terms of the deal have changed many times since then, but it involves the state’s leasing the land to State Center LLC, which would lease some of the new office space back to state agencies.
Board of Public Works officials say the panel is authorized to cancel real estate transactions that are not carried out within a year. They also said that the proposed rent the state would have to pay for the office space has reached a level that would require additional approval by Maryland’s legislature or the state’s Capital Debt Affordability Committee.
Edney, who served as a legal adviser to President George W. Bush’s National Security Council and describes himself as a lifelong Republican, accused the board of canceling the agreements so it could pick a different developer. He said the lease rates were set around 2009, during the recession and when the market was favorable to the state.
“I think what they’re trying to do is come up with an excuse to give this project to somebody else of their liking,” he said. “We’re not going to let them do that.”
In addition to Hogan, the Board of Public Works includes Comptroller Peter Franchot (D) and Treasurer Nancy K. Kopp (D). The panel oversees most major state contracts.
Franchot urged the state to consider building an arena that would house professional basketball and hockey teams, neither of which Baltimore has. He said such a plan would help revitalize the neighborhood economically and “spark the imagination of the state of Maryland as to what can happen in Baltimore.”