April 5, 2012

Senators question constitutionality of public-private partnership bill, administration affirms support

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By Justin Snow
Justin@MarylandReporter.com

UPDATE The Senate Budget and Taxation Committee approved the bill Saturday, April 7, removing the controversial amendment for the expedited legal process.

The O’Malley administration affirmed its support on Wednesday for a controversial public-private partnership bill that threatens pending litigation against the State Center development in downtown Baltimore.

Aerial view of the blocks slated for State Center development.

Aerial view of the blocks slated for State Center development.

Administration representatives faced pointed questions from the Senate Budget and Taxation committee about an amendment tacked onto the bill by the House of Delegates last week that would retroactively affect a lawsuit filed by Baltimore business owners against the $1.5 billion State Center project.

CORRECTED: The amended bill would expedite the appeal process for the losers in public-private partnership lawsuits by allowing them to appeal a ruling directly to the Maryland Court of Special Appeals, skipping the circuit court.

The coalition of business owners have claimed contracts were not competitively awarded as required by law and that the addition of new commercial and residential space would further increase the downtown area’s high vacancy rates.

Testifying in favor of the amended bill was Robert Brams of the Patton Boggs law firm, who served on the state commission that drafted the original bill.

“Any expedited procedure in the context of major contracts, major development projects where we’re trying to get infrastructure done and jobs done is better than no expedited process,” Brams said.

Administration officials argued that retroactive legislation was not unprecedented, but admitted it was uncommon.

The State Center project has been on hold since the lawsuit was filed in December 2010.

Committee members’ questions centered largely around the House Environmental Matters Committee amendment adopted late last week, which led to impassioned debate on the House floor.

Regardless of the State Center case, Sen. Nathaniel McFadden, D-Baltimore City, questioned whether the amended bill would set a precedent for any project moving forward.

“Am I correct? Am I correct?” McFadden asked administration officials, who confirmed that he was. “I thought I was correct,” McFadden said.

“Because this has been done in the past doesn’t make it right,” stated McFadden.

Opposition was echoed by Sen. Roger Manno, D-Montgomery. He sponsored the original bill, but said he would work against the amendment.

“I would have a real problem supporting the bill with this amendment,” said Manno.

Administration officials could not answer Manno’s questions about whether the amendments would have been proposed had the State Center lawsuit not been pending before the courts. Officials responded that the amendments were not from the governor’s office. Plaintiffs in the lawsuit have said the amendments were targeted at their case to deny them a public trial.

Testifying in opposition to the amended bill were several lawyers, including some representing plaintiffs in the State Center lawsuit. They said the amendment raised serious constitutional questions.

Representing the Maryland State Bar Association, Director of Legislative Relations Richard Montgomery said he would not be testifying were it not for the retroactive House amendment. Montgomery added that the association had no issue with the original bill.

Byron Warnken, a professor at the University of Baltimore School of Law, said he had “no dogs in this fight” and that while a constitutional argument could be made by both sides, lawmakers should consider “fundamental fairness.”

“You and I as a society have a very difficult time operating if in fact we operate according to the law, but we never know whether during that process the law will be changed,” said Warnken. “The fact that the constitutional question is up in the air is probably enough reason to not make retroactive legislation.”

  • TellTruth

    It continues to be outrageous that the Angelos “spin machine” has so obfuscated the facts. The bill serves only one purpose- to offer an expedited legal review to curtail the nefarious activities of those (Angelos, Rifkin, et al) who seek to stop projects from which they personally do not benefit economically by using the overburdened court system to materially delay the development process … since, as they know well, “time kills deals”. The opponents have the press and now some legislators erroneously believing the bill is an “unconstitutional effort to circumvent the judicial process” when exactly the OPPOSITE is true – the bill is intended to protect the constitutional rights of all to a speedy and fair hearing of a dispute, no matter how specious the genesis of the dispute may be (as is typically the case of the various anti-development claims Angelos has made over the years). The Angelos crowd has pushed the Westside effort into oblivion, and has now delayed a critical jobs-creating project– State Center – for nearly 18 months. At what point do the citizens get to sue him for “restraint of growth and employment” ?! The chilling effect on future public-private efforts in this State will be enormous if Angelos successfully uses his cronyism-based tactics to stop this bill.

    • abby_adams

      Sorry but this whole deal reeks of cronyism on all sides. You don’t have to be an urban planner, in real estate or a lawyer to see the over abundance of vacant commercial properties in the downtown area. What this & other deals presented by the O’Malley administration need is a huge dose of transparency, not the same old line about “job creating projects”. It might be a good project, even great. Then again it just might be another O’Malley windmill moment with taxpayers on the hook again.

      • TellTruth

        There is not even remotely an “abundance of vacant commercial
        properties in the downtown area” which can support a 400,000+ square foot user
        in an energy efficient, Class A (or even B+) environment where repairs, replacements,
        and operating costs will not eventually outstrip base net (just ask Exelon/Constellation,
        which is building a new facility after conducting an exhaustive search).  The utter lack of knowledge among people commenting
        on this project is stunning, and a void well-exploited by Angelos and
        crowd.  As to O’Malley, note that this project
        actually stated under Ehrlich, and has been supported by Republicans and Democrats
        alike, as well as 2 separate administrations at the City and State levels.  Bottom line – the State news the space, NO alternative
        buildings exists in Baltimore which can support the use, leaving State Center would
        devastate that area, and private money exists which is willing to fund a revitalization
        and job creation effort utterly lacking in this area.  The State is simply paying rent – not issuing
        bonds, guaranteeing debt, guaranteeing a return to anyone, or even guaranteeing
        success of the overall project.

        • abby_adams

          It’s difficult to ascertain the veracity of any state project given the lack of transparency in learning the details, frustrating taxpayers when they ask questions. Maybe you should be penning an op-ed promoting your position on the matter. As a Baltimore native, I’ve seen many ambitious projects touted only to be a bust in the end so I’m skeptical about this massive undertaking. Could this be another empty promise? Then who will accept ultimate responsibility if developers fail to deliver? Legit questions that remain unanswered to the average hon.   

  • RealTruth

    The Circuit Court has found that the Plaintiffs in the State Center lawsuit have standing to sue. Motions to dismiss and a counter suit brought by the State have been rejected by the same court. The State Center project was awarded to a formerly prominent developer with ties to the O’Malley Administration from the Governor’s days on the City Council, without a public solicitation being issued for bid. The development team includes a who’s who of minority contractors and local minority business leaders who stand to make millions should the deal go forward (and who also are among the administration’s strongest supporters). To this reader it seems that this whole affair could use a healthy dose of transparency. To that end, the Court of jurisdiction has ordered the Administration to turn over reams of documents, emails, and etc. in discovery. So far, the administration has not complied with the order. The judicial and retroactive amendment to the P3 law would rob taxpayers of an enlightened understanding of what happened here, and how to avoid such a mess in the future. Lets see the cards!!

  • Frank Van

    Besides the other merits of the case against the State Center, why should the P3 law give a preferred position to the P3 projects.  These projects will be unconditionally supported by the Public entity, giving it an unfair advantage moving through the approval process and will also obtain preferential treatment through an abbreviate court procedure.  The laws that apply to regular development should apply to all or the Public entity should make its case through eminent domain procedures.
    This P3 law comes close to a disguised eminent domain law that allows the Public entity to enrich a private developer in exchange for what??????
    You tell me and don’t give me the “job creation” or “public good” excuse.  This P3 law gives the Public entity (State) unfair advantage.  It illustrates the frustration by the State over the regulations and legal procedures that ALL CITIZENS have to struggle with when they want to build a project.   The State does not like its own medicine.
    If indeed for the public good, then go through the eminent domain procedure.
    Again proof that the democrats in Maryland have such a oervwhelming majority that they act as dictators.  Is it a state of Cronies?