Baltimore City is ending a developer’s controversial and nearly two-decade-old agreement to rebuild swaths of the long-neglected Poppleton neighborhood, the city housing commissioner said Monday.
The deal between the city and La Cité has embroiled the administrations of six mayors and the New York City-based developer in a rabbit hole of lawsuits, project delays and community outrage. Millions of dollars in government money poured into the project, which involved displacing hundreds of West Baltimore households and local businesses.
“While the redevelopment of Poppleton has seen some signs of progress, the area’s revitalization has mostly been met with delays and shortcomings that we can no longer endure,” Housing Commissioner Alice Kennedy said in a statement.
La Cité has blamed recent project delays on the city, saying the city has not pursued the tax incentive funding package the developer says is needed to move forward with financing the next phase of construction.
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Last month, the developer missed a deadline to show it had the funds to continue into the project’s next phase, building a seven-story apartment complex for older adults. It sought an extension.
The city on Monday notified La Cité that it wouldn’t grant the request, which “effectively places the developer in default of their agreement with the City of Baltimore,” Kennedy said in the statement.
Under a 2006 agreement with the city, La Cité planned to build office, hotel, apartment and retail space, along with several hundred row homes, spanning up to 14 acres, despite having never taken on a project of that size.
A draft of a letter from Kennedy to La Cité, obtained by The Baltimore Banner, gives notice that the city is barring La Cité from starting construction on any of the developer’s other promised buildings, in what is Baltimore City’s most aggressive attempt in more than a decade to extricate itself from the developer.
“The City hereby terminates the [agreement],” regarding any project or property that is not included in any term sheet or final agreement with the city or third party, the letter says.
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The agreement to redevelop Poppleton, one of the city’s oldest Black neighborhoods, has been amended five times since the original deal was struck under former Mayor Martin O’Malley. Changes often included extending timelines for building La Cité properties.
Six years into the initial development, La Cité had not constructed a new building. That prompted city officials to terminate the deal, with the city asserting the developer did not have the financing to continue. But La Cité sued and won in federal court, blaming the city for delays.
Since then, the developer has erected a 262-unit apartment complex known as Center/West, which opened in 2019, four years later than planned. The senior center in need of financing is in the design phase and is not affected by the city’s termination, as the developer already owns the land.
The apartment building was almost entirely financed by taxpayers and about a quarter of its market-rate units were vacant as of March, The Banner previously reported. La Cité claims in financial filings that some of these recent vacancies are due to a defective fire-suppression sprinkler that flooded three floors last fall.
Poppleton residents and some current and former Baltimore officials have criticized the city over the years for not taking bolder steps to end its agreement with La Cité. Plots are empty, despite Poppleton being a few minutes from downtown.
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Poppleton Now Community Association President Sonia Eaddy, who was the last homeowner holdout in city’s redevelopment push, spent years fighting the city to stay on her block. The developer initially planned to raze her home.
She called the move to terminate the deal a victory.
“The city is taking a stance … wow,” she said.
Eaddy added that the city now has a chance to involve the Poppleton community in the neighborhood’s development, potentially using some of the empty land for a park or some other public use. She sees it as proof they are willing to reexamine long-standing concerns in Baltimore neighborhoods.
“This brings hope that the city is willing to listen,” she said.
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The city “looks forward to working with the community on next steps,” Kennedy said in a statement Monday.
As it missed its latest financing deadline, La Cité attorneys attributed project delays to “the City’s failure,” according to a May 17 letter to Kennedy and another city official, obtained by The Banner. “The reasons for the delay … are entirely outside the Developer’s control.”
It has been a challenging market to find money for construction projects over the last 22 months, and without certain tax incentives, PNC Bank and Fannie Mae, a lending arm of the federal government, will not finance the deal, the letter says.
The company requested an extension and agreed to negotiate in good faith an “anticipated Sixth amendment” to the contract.
Kennedy’s draft response letter does not explain the city’s position about whether it is obligated to seek a tax incentive funding package. She writes that the developer is giving “purported reasons” that “do not justify the granting of any extension, much less an extension beyond 60 days.”
She continues: “the city sees no point in discussing a Sixth Amendment at this point.”
Matti Gellman
matti.gellman@thebaltimorebanner.com
:quality(70)/s3.amazonaws.com/arc-authors/baltimorebanner/0a5b5c4d-6fd8-4a06-97ea-ad66882769d1.png "Baltimore City terminates NYC developer’s deal to rebuild Poppleton (1)")
Matti Gellman is a Food Reporter for The Baltimore Banner.
