Tax Break: A yet-to-be-released study concludes that the City isn’t getting its full share from property taxes

By Van Smith

Published in City Paper, Oct. 13, 2004

This spring—as happens almost every spring—Baltimore confronted a budget crisis. City Hall’s $2.1 billion spending plan for fiscal year 2005 entailed cutting 533 government jobs and curtailing city services to pay for it. On April 14, Mayor Martin O’Malley proposed an alternative: a suite of new taxes and fees that would preserve the jobs and services with $48 million in revenue.

Five weeks later, with the budget process complete, the City Council had trimmed O’Malley’s tax proposal down to three elements that would generate $30 million from taxpayers: doubling levies on real-estate sales and imposing new fees on phones and energy use.

“It happened so fast,” City Councilman Keiffer J. Mitchell Jr. (D-4th) says in summing up this year’s open-and-shut budget battle in Baltimore, the most heavily taxed jurisdiction in Maryland. Mitchell chairs the council’s Taxation Committee and thus led the legislative body’s tax debate. In a recent interview, he remembered how he and his council colleagues felt as if “we had our backs against the wall” when confronted with the mayor’s proposals.

Since April, Mitchell has learned that there was an unexplored option—going after millions in untapped revenue potential from the city’s existing property-tax rolls by appealing low assessments. While O’Malley touched on this idea in passing in a Sun article in December 2003, saying that “generally the state underassesses city properties,” a strategy to get the state to do more accurate assessments never made it into his set of gap-closing proposals in April 2004—or into the City Council’s ensuing tax debate.

Property assessments are the basis for calculating how much property owners are taxed for their holdings, and are conducted by the state in three-year cycles—a third of the city is assessed each year. Baltimore City’s property tax rate, just shy of $2.33 per $100 of assessed value, is much higher than in any of the state’s 23 counties. Thus, underassessing property in Baltimore shortchanges city coffers—and, due to the high tax rate, those coffers are being shortchanged more dramatically than in other parts of the state. Montgomery County is the only jurisdiction in Maryland that appeals property assessments it believes are too low, but under state law any jurisdiction is free to do so.

Unbeknownst to Mitchell and the public during the five-week debate this past spring, a privately funded study about the revenue potential locked up in underassessed city commercial property had already been underway for more than two years. While the City Council was weighing its options, a draft report from this effort was in the hands of a select group of people for review and comment, including staff at the city’s Department of Finance. Its fundamental finding: The city should consider going after millions in unrealized revenues by appealing underassessments of commercial property within its borders. By the time Mitchell learned of the draft report, the new taxes had already become law.

“I guess it was July when I first heard about it,” Mitchell recalls, “and that was through some businesspeople. I’ve asked for a copy of it from the [city’s] finance department, but was told it was in draft form.”

The study, which has yet to be released, was overseen and underwritten by the Abell Foundation, the renowned research and grant-making outfit that works to improve quality of life in the city and state. In mid-September—five months after first hearing rumors about the study—City Paper obtained a draft copy of the report, titled “A Costly Problem: Commercial Property Assessments in Baltimore.” Its preliminary conclusions, based on comparing assessed values to the sales value of a sample of 121 commercial properties, show that nonresidential property in the city is significantly underassessed.

For example, one of the properties study author John Hentschel looked at as part of his research was the old United Iron and Metal site at Pulaski Highway and Haven Street in East Baltimore, a scrap-metal processing facility on one acre of land with a 4,400-square-foot building. The property sold for $220,000 in 2000, yet Hentschel discovered that it was assessed at $42,000—less than a fifth of the sales price. He also looked at the old Abbey Schaefer Hotel at 723 St. Paul St. in Mount Vernon, which sold for $650,000 in 2001; its assessed value was $315,020, less than half of the sales price.

The question of exactly how much city commercial properties are underassessed is still a matter for discussion as the study continues to wend its way through the review process, but it is enough to translate into millions in unrealized tax revenue—potential revenue that Mitchell believes should have been on the table when the council was weighing its budget options.

While the councilman still hasn’t seen the report, he says that what he’s heard “suggests to me that I didn’t have all the tax information that I would have liked to have had before we went raising taxes on everyone.”

Steve Kearney, O’Malley’s director of policy and communication, says that the mayor’s office wasn’t “aware of the report, because it was still a draft that was under review.” He adds that “the purpose of the report is to promote public discussion, but you don’t have the debate before you have the facts.”

“As soon as the report comes out,” Mitchell promises, “I’m going to have a hearing—one that we should have had before we started biting the hands that have invested in this city.”

The Abell Foundation was not pleased that a copy of its report-in-progress had gotten into the press’ hands.

“We’ve got a problem here,” said a stern-voiced Gilbert Sandler, Abell’s spokesman, in a late-September phone call to City Paper. “That report has not been vetted. We have no idea what’s true and what’s not true, so it is not ready, by any means—we are not ready to release any piece of it.”

Later, after talking it over with other staff at Abell, Sandler called back to say, “You do what you want to do, and we’ll do what we’re going to do.” Abell’s people would not be available for interviews or meetings to discuss the study, he explained, and he cautioned that “there are many points of view that need to be taken into account that aren’t in that draft. It’s a work in progress. You shouldn’t publish [its findings] until we release it.”

On Oct. 4, City Paper learned that Abell’s position had shifted—the study’s author would be allowed to discuss the study and address its shortcomings. John Hentschel, a real-estate appraiser who served as the city’s real-estate officer from 1982 to 1992, is founder and president of Hentschel Real Estate Services, an Abingdon-based consulting firm, and an internationally recognized expert in public-sector real-estate practices. An afternoon meeting with Hentschel at the White Marsh Mall food court presented a clearer picture of the study’s findings.

During the meeting, Hentschel—a friendly, forthcoming, well-dressed fellow who chooses words carefully as he wrangles complex real-estate concepts into clear language—readily concedes that his draft report contains some errors in analysis. But, he adds, his overall conclusions stand: The city is missing out on substantial revenues due to underassessed commercial properties, and there are steps—at both the local and state level—that can be taken to remedy the situation.

The road to the “A Costly Problem” report started, Hentschel recalls, late in 2000 or early in 2001, when “Abell called me and said, ‘We are thinking about doing a study about this, are you interested in doing it?’ And I said, ‘Sure,’ and I wrote a proposal.” He had noted, while perusing newspaper reports, that when major commercial properties sold the assessed values were well below the sales prices. “It would make you scratch your head,” he recalls.

And so, starting in late 2001 or early 2002, Hentschel embarked on a lengthy project that would ultimately lead to the draft report, “A Costly Problem,” which he submitted to Abell in late January or early February 2004. It was based foremost on looking at recently transacted commercial property sales and comparing the sales prices to the properties’ assessed values.

“The more you got into it, the more you would say, ‘Well, why is this, why is this, why is this?’” he says. “So you start asking more and more questions. And if you are not coming in with a pre-conceived conclusion, it takes you where it goes.” And where it went, Hentschel says, indicated that underassessments of commercial properties were a real problem that could be remedied if the city chose to appeal low assessments.

“Each year,” Hentschel wrote in his conclusion of the draft, “taxpayers diligently review their property tax assessments to ensure that they are being asked only to pay their appropriate share of property taxes, and no more. Isn’t it reasonable to expect local public officials to exert a similar degree of fiscal prudence on behalf of all City residents by diligently performing a similar annual review to ensure it is receiving its fair share of revenues from the assessable tax base, and no less?”

The main constructive criticisms of the “A Costly Problem” draft so far, Hentschel explains, have come from Doug Brown, supervisor for public-policy analysis in the city’s Department of Finance, who handed over his thoughts in writing to the Abell Foundation on Sept. 28.

First, Hentschel says, Brown identified a link between tax rates for real property (land and improvements, such as buildings and parking lots), which are levied against property owners, and personal property (equipment, machinery, furniture, fixtures, and the like), which are levied against business owners. The draft report, Brown pointed out, did not consider that link.

“The personal property tax rate is computed at two and a half times the real-property tax rate,” Hentschel says. Thus, he continues, if the city were to lower its real-property tax rate in response to more revenue from increased commercial-property assessments, it would have “a corresponding effect of reducing the personal property taxes” entering the community chest.

The draft report also failed to include the impact of increased property-tax assessments on the amount of state education aid to the city. If the city, on its own, successfully appealed assessments upward to the tune of millions of dollars, Hentschel says, then Brown’s “projections show there would be an adverse affect on state aid to education.” (In 2004, the state provided $533 million of the city school system’s $931 million operating budget.) Since the state divvies up education aid based on each jurisdiction’s wealth, as measured by the assessed value of its real estate, then a rise in Baltimore’s assessments—without a corresponding rise in the rest of the state’s assessments—would lead to a reduction in state aid to Baltimore’s cash-strapped education system.

Thirdly, Hentschel continues, if the city unilaterally appealed state assessments upward, “there may be an adverse reaction from an economic-development standpoint, in terms of perception” among businesses that feel they’re being picked on.

Donald Fry, president of local business group the Greater Baltimore Committee, says he knows that in the one Maryland jurisdiction where appeals of underassessments are routinely brought by local government—Montgomery County—“it has resulted in some consternation among some property owners.” Given the city’s “financial strains,” he adds, “City Hall is going to want to look at that very closely, as will we.”

However, Hentschel adds, “the report basically re-emphasizes and re-emphasizes again the matter of parity, equity—that it has to be done in an equitable and above-board fashion. There have to be safeguards put in it so there are no maneuvers to aggressively or capriciously go after certain taxpayers.”

In order to calm such concerns, Hentschel suggests a process by which the city could “look for anomalies that might give basis for appeals” of low assessments. “You need to be comparing apples to apples,” he explains, so the city should find an average assessment value for different types of properties, classified by use, age, size—whatever category works best.

“Once you have each group’s average assessment,” he continues, “you look for outliers—properties that appear to be underassessed because their values are so far below the average. And then you try to find out why. Maybe they are in an off location or they’re deteriorated with age. Then the low assessment is either explainable or not, and if not, you consider it for appeal.”

That’s a fair and equitable way, Hentschel says, to find assessments that don’t pass the smell test. The city could take up such cases with the state’s assessments office in Baltimore City for initial appeal, then, if necessary, to the Baltimore City Property Tax Assessment Appeals Board, and finally—if a case goes this far—to the Maryland Tax Court for a final, binding decision.

But, Hentschel says, Brown makes a good point on behalf of the city: Appealing for assessment increases has to be done on a statewide basis. “Otherwise,” he says, “there would be certain unintentional and adverse effects on the city because of these various linkages in other things—personal property tax, and state aid to education, and adverse perception.”

Though Hentschel did not provide a copy of Brown’s comments to City Paper, Kearney did, faxing them to the paper on Oct. 6 and asking that the document not be quoted directly. (Brown was out of the country and unavailable for comment until after press time.) Computations and conclusions contained in Brown’s written comments reveal the city’s analysis of the revenue impact of seeking to raise underassessments.

According to Brown’s written comments, an 18 percent increase in nonresidential property assessments overall would yield $26.5 million annually in new revenues for the city; and that the same assessment boost on all city property—residential properties included—would add $76.8 million to the coffers. (Brown’s analysis, in the second instance, assumes the same kind of underassessment for residential properties as well.) If the city’s response to this was to try to give taxpayers a break and reduce the real-property tax rate by the same proportion as the boost in assessments—18 percent—there would be a corresponding 18 percent decrease in the personal-property tax rate, the document explains. In other words, any reduction in the real-property tax rate would lead to a reduction in the personal-property tax rate, as well, which would result in a greater over-all revenue reduction.

When Brown’s comments turn to the subject of the aid-to-education impact of increased assessments, he uses a slightly different example—a 15 percent increase in assessments. If the city increased assessments 15 percent without any increases in property assessments in the state’s 23 counties, the city would lose $21.5 million in state aid for education, much of which would shift to other counties. If, however, each county reassessed its properties to the tune of 15 percent, then the city’s share of state aid would increase by about $7 million.

Without delving further into the mathematical and statistical minutiae of Brown’s comments and Hentschel’s draft report, it is clear that addressing underassessed properties in Maryland would have a significant impact on local-government budgets—all the greater if the job was undertaken state-wide, as Brown recommends.

For now, the state agency in charge of property assessments is staying mute on the subject. “The Abell report hasn’t been officially released,” John Sullivan, head of the state’s Department of Assessments and Taxation, says in a phone conversation. “We received the draft in April, and we responded to everything in the report, and so far the Abell Foundation has not gone forward with it. Our response to their draft is in their hands, and I’m not obliged to give you my response to that draft until it is officially released.”

However, Sullivan says that he does not think there is an underassessment problem in Baltimore, much less Maryland. “We treat all property owners the same,” he says. “Each one is our customer, and we treat that customer as we would want to be treated. And all of our assessments—every one, and we have 2 million properties we’re responsible for assessing—are valued uniformly and equitably across the state.”

While Sullivan won’t share his written comments on Hentschel’s draft, he reveals that there was at least some administrative reaction to what it contained. “It did show many examples of inaccurate assessments that have since been corrected,” he says. “I think 90 percent of the properties he cited have been adjusted.”

When City Paper reviewed some of the properties Hentschel sampled as underassessments, state Department of Assessments records indicate that nearly all have been adjusted since the study was conducted (see “The Short Lists”). Some assessments were raised to almost equal the sales price—but several upward adjustments were minor, and a couple were adjusted downward, so that the gap between assessed value and the sales prices actually widened.

In addition, City Paper did an analysis on its own set of sample properties (see “The Short Lists”). Anyone with Internet access and a minimal amount of database searching skills can go to the Department of Assessments Web site and do his or her own analysis of assessment-to-sales-price comparisons.

Even before Hentschel’s “A Costly Problem” draft report was sent out for review and comment, rumbles of discontent over possible underassessments statewide were being heard last year in Annapolis. “Property under-assessments are a significant problem facing the State of Maryland,” wrote Ronald Bowers, administrator of the state’s Property Tax Assessment Appeals Board, to state Del. Leroy Myers (R-Allegany and Washington counties) in a May 13, 2003, letter (emphasis in the original). “Many properties in the state are under-assessed at between 10 and 80 percent of the actual market value,” the letter continues. “This translates into inequitable taxes for similar properties and lost revenue for the State and local governments.”

The state Department of Assessments and Taxation “was cut back, budget-wise, and it was kind of hampering them from doing their job,” Bowers said recently when asked about the letter. “They need modern equipment other than clipboards to keep up with this ongoing problem, and they were losing people,” he says—touching on a possible reason why assessments appear to have gotten out of whack in the first place. “The proper equipment and the right amount of people is a good investment,” he continues, “because a little bit for them yields a lot for government—and a greater sense that the process is working fairly. If it isn’t fair, if it isn’t done properly, then the mainstream taxpayer is paying an extra burden.”

Councilman Mitchell echoes that sentiment: “I don’t think the city’s getting its fair share, so let’s recoup what we already have [from correcting underassessments] before we go taxing everybody. And these new taxes—especially the phone taxes—hit everybody at the same level, $3.50 per line per month. At least with property taxes, the amount you’re supposed to pay is intended to be in line with the amount of value you have.

“Right now, there is so much distrust in government that it’s not right,” he says. “We have to do what is right.”

Hot Contract: City bribery scandal tied to influential father and son

By Van Smith

Published in City Paper, Jan. 26, 2005

Mark Sapperstein owns 113 W. Hamburg St., an 8,000-square-foot commercial building in Sharp-Leadenhall. The South Baltimore property, though devoid of signs, houses Allstate Boiler Service, a company owned by Gilbert Sapperstein, Mark’s 73-year-old father.

On Jan. 7, Allstate Boiler’s bookkeeper and office manager, Ida Marie Beran, pled guilty in a bribery case involving the company’s contract with the city to provide boiler services for municipal agencies. Also pleading guilty was Cecil Thrower, a city Department of Public Works employee since 1984 who worked at the Back River Wastewater Treatment Plant in Essex.

The case ties an established name in Baltimore’s business and political class—that of the Sapperstein family—to an ongoing criminal investigation.

In the statement of facts filed in the case, which was brought by the Office of the State Prosecutor, Beran and Thrower admitted that they conspired together to inflate invoices under Allstate Boiler’s contract with the city. While Thrower received somewhere between $1,500 and $2,000 for his part in the scheme, Beran received nothing—though her employer received “well over” $120,000 in excess payments as a result of the fraudulent bills, according to case documents.

The court record further explains that the conspiracy began in approximately 1998, at which point “Mr. Thrower was approached by the business owner who employed Ms. Beran [who] suggested to Mr. Thrower, ‘From time to time you could do something for us and perhaps we could do something [for] you.’ . . . [O]n more than one occasion, while acting at the instruction of and in concert with her employer, Ms. Beran prepared the envelopes containing cash for Thrower and provided them to other employees for delivery to Thrower.”

The case documents make no mention of Allstate Boiler or the Back River plant. Department of Public Works spokesman Robert Murrow, however, confirmed for City Paper that the city contract defrauded in the scheme has been held by Allstate for “like 20 years” to provide boiler work for any city agency that needs such services, and that the inflated bills were for work at Back River.

Allstate, which has been in business since 1965, also holds the boiler contract for the Baltimore City Public School System, according to city schools spokeswoman Vanessa Pyatt, though she says the contract is “set to expire in February.”

State prosecutor Robert Rohrbaugh confirms that, “absolutely, this is a continuing investigation,” though he could “neither confirm nor deny” that the investigation continues to focus on Allstate Boiler or the Sappersteins. Rohrbaugh’s reticence aside, the record makes clear that Allstate, not Beran, benefited from the longstanding bribery scheme.

Mark Sapperstein acknowledged to City Paper that Allstate Boiler Service is located at his property, but he declined comment about the company or the bribery scandal. Gilbert Sapperstein did not return calls for comment left at Allstate, and contact information for Beran could not be found. Thrower’s phone at his West Baltimore residence has been disconnected.

Mark Sapperstein is a major player in local real-estate circles. He’s a partner in Silo Point, a $200 million proposal to convert a derelict grain elevator in Locust Point into a residential-retail development. On Jan. 13, the Baltimore Development Corp. awarded development rights to a city-owned parcel at Calvert and Lombard streets to Mark Sapperstein and his partners, who planned to turn it into a $71 million apartment complex called Cityscape. In 2002, he and his partners constructed a $13.5 million parking garage at Calvert and Lombard. Last spring, Sapperstein purchased 200 acres on North Point in eastern Baltimore County, where he plans to build luxury single-family homes on the Bauer Farm tract, where British troops in the War of 1812 marched en route to face Baltimore militias.

Gilbert and Mark Sapperstein, through their respective companies, have been active as donors to campaigns of elected officials. Since the fall of 1999, the two, along with Mark Sapperstein’s wife and several Sapperstein companies, gave at least $33,270 to the campaign committees of various elected officials.

Of the total, $9,650 went to Mayor Martin O’Malley (D), $8,000 went to Baltimore County Executive Jim Smith (D), and $4,250 went to Gov. Robert Ehrlich (R). Nearly all of the rest went to legislators representing Baltimore City and Baltimore County. At the federal level, Gilbert Sapperstein donated $250 each to U.S. Rep. C.A. “Dutch” Ruppersberger (D-2nd District) and the Republican National Committee. Mark Sapperstein gave $1,000 to U.S. Sen. Joseph Biden (D-Del.) and $500 each to Ruppersberger, U.S. Sen. Barbara Mikulski (D), and Virginia Congressman Eric Cantor (R-7th District). Mark Sapperstein’s wife also gave $500 to Cantor.

Gilbert Sapperstein, according to several sources familiar with the workings of the Baltimore City Board of Liquor License Commissioners, is known as a go-to guy for prospective liquor licensees looking to break into the bar business. As a secured creditor for bars that fail, he assumes control of properties and liquor licenses and thus can procure opportunities for new entrepreneurs. According to liquor board documents, for example, Sapperstein was a secured creditor in a March 2003 license transfer for Mary’s Place in West Baltimore. Often, sources say, bar owners who are indebted to Sapperstein, who has been in the poker-machine business for years, agree to keep his poker machines in their establishments.

Both Sappersteins have had run-ins with the law for gambling-related charges. Gilbert, whose Star Coin Machine Co. is housed at 113 W. Hamburg with Allstate Boiler, faced 107 gambling-related charges in state courts in the 1980s and ’90s relating to Star Coin’s poker machines, though prosecutors declined to prosecute nearly all of them. In two cases, he received probation before judgment and was fined $1,475. Mark Sapperstein was charged with four gambling-related counts in 1989, though prosecutors chose not to pursue the cases. State records indicate that Mark Sapperstein’s poker-machine company, Mark’s Vending, has been inactive for more than a decade.

In 1984, Gilbert Sapperstein faced 18 housing-code violations for properties he owned in the city, receiving probation before judgment for 16 of them while prosecutors declined to pursue the remaining two charges. In 2003, Gilbert Sapperstein was charged with 10 housing-code violations in connection with a rowhouse he owned at 3203 Fleet St., receiving probation before judgment and $170 in fines. He sold the property shortly afterward.

Last April, Gilbert Sapperstein sold one of his properties in the Hollins Market neighborhood—the former Tom Thumb/Gypsy’s Café property, which in 2000 collapsed amid ill-conceived renovations. Two of his other properties in the same Southwest Baltimore neighborhood on Carrollton Avenue—one of which housed the Club Medusa, a hipsters’ after-hours social club, in the 1990s—are for sale. In July, he sold a property at 1600 W. Baltimore St., which houses a tavern called Good Times.

Currently for sale in the 800 block of West Cross Street is the property that housed Foul Ball Bar and Grille, which is owned by 2001 Eastern Ave. LLC, one of Gilbert Sapperstein’s companies. The Fells Point address the company is named after houses the Colonial Inn (owned by the same company). In Baltimore County, Gilbert Sapperstein owns 9727 Pulaski Highway, a large restaurant currently under renovation, and 2123-25 Sparrows Point Road, a strip club and bar.

The list of Sapperstein properties—many of them with liquor licenses attached—could go on and on.

In the 1990s, Mark and Gilbert Sapperstein were named, along with dozens of other parties, in a civil Racketeer-Influenced and Corrupt Organizations (RICO) lawsuit brought by Donald D. Stone, a self-described surfer dude who alleged that the Sappersteins, their business partners and lawyers, and the law-enforcement bureaucracy in Maryland and Florida conspired to keep him from shedding light on their allegedly corrupt schemes. The case, which was filed separately in federal courts in Maryland and Florida, went nowhere. That outcome has not kept Stone from posting potentially libelous statements about the Sappersteins and others on the internet—though, so far, Stone says he has not been sued.

Part of Stone’s investigation into the Sappersteins focused on an Anne Arundel County deal for cell-phone towers that led to a lawsuit against Mark Sapperstein and his business partners by George and Mary Jane Chamberlain, who moved from Annapolis to New Hampshire before filing the complaint in 1999. The lawsuit, which has since been settled, alleged that Mark Sapperstein and two partners, both of whom also sat on the Anne Arundel County Economic Development Commission, stole the couple’s idea for dominating the communications-tower industry. The terms of the settlement are confidential, though the amount paid to the Chamberlains—$40,000—later leaked out. The lawsuit was filed shortly after Mark Sapperstein sold his communications-tower companies to a Florida company for $8 million in 1998.

Investigators are keeping mum about where they might be headed as they scour the books. Only time will tell whether the Sappersteins are in the clear or headed for more trouble as the case progresses.

Balling The ‘Jack: Ex-con aims to reopen Hammerjacks as Heaven

By Van Smith

Published by City Paper, Jan. 30, 2008

“The law is very clear that the licensee can’t be a convicted felon,” explains Douglas Paige, spokesman for the Baltimore City Board of Liquor License Commissioners. He’s fielding questions about a newly filed application to transfer a liquor license from the closed Red Lyon Tavern in Canton to the old Hammerjacks nightclub property, downtown at 316 Guilford Ave. The plan is to open a large club called Heaven, but a convicted felon who is not the proposed licensee is listed in the application as its full-time operator. Felons are barred from holding liquor licenses, Paige says, but full-time operators of liquor-licensed businesses can have a felony background, as long as they’re not on the liquor license.

Having paid the $400 filing fee and filled out the necessary paperwork, he says, “the applicants are entitled to a hearing.” Valentine’s Day is the scheduled date of the hearing in the Pressman Board Room in City Hall, Paige says, and the three-member Liquor Board then will decide what to do about the proposed transfer.

“The board would have grave concerns about this, I’m sure,” he predicts. “They will have to look over this application closely to see how this is going to be operated.”

The application lists Leroy M. Brown, 50, and Joanne Giorgilli, 63, as the would-be owners of Heaven’s liquor license, and the full-time operator of Heaven would be Joanne Giorgilli’s 41-year-old son, John Americo Giorgilli.

Known to many as “Johnny G,” Giorgilli’s career as a nightlife impresario includes Club 101 in Towson, which closed in the mid-1990s amid controversy, and the China Room, a downtown club that operated at Uncle Lee’s Szechuan Restaurant and closed down in the early 2000s. He is currently under indictment in Baltimore County for first- and second-degree assault and false imprisonment, and since the mid-1990s he’s racked up charges and convictions for drugs and violence and served at least one stint in jail. The state’s online court-case database lists 85 cases dating back to 1993 in which Giorgilli was a criminal defendant.

On Jan. 25, Liquor Board Chairman Stephan Fogleman told City Paper that “the Liquor Board, in addition to making sure that licensees aren’t felons, wants to make sure the actual operators aren’t felons, too. . . . There are numerous ways we can look at applications such as this, and we will do just that at the hearing.”

One issue raised by information in the Heaven liquor-license application is the source of funds for starting up the club. The application shows that Brown has no money in it, but, since the Giorgillis live in Baltimore County, he satisfies board requirements that a resident city taxpayer be on the license. Joanne Giorgilli, a 29-year employee of Maryland School for the Blind, is listed as 100 percent owner, with the money for the club coming from her Bank of America savings account. Not mentioned in the application is the fact that Joanne Giorgilli is listed as co-debtor in her husband’s 2005 filing for bankruptcy protection. Two others listed in the license application–John Goertler and Ron Jones–are named as each having $200,000 available to pay for remodeling, should the club need financial assistance.

“If the question is, do I have that kind of money, the answer is yes,” says Goertler, one of John Giorgilli’s former partners in the China Room. “If the question is, have I committed fully to [putting $200,000 into Heaven], the answer is, not at this time. I’m thinking about it.”

Jones declined to be interviewed, but sources who spoke to him about it say he, like Goertler, is considering the Heaven proposal. Jones, a former Baltimore City police officer whose interests over the years include for-amusement-only gambling devices, dry cleaning, used cars, bars, and strip clubs. (“Mob Rules,” Oct. 6, 2004).

The Hammerjacks property is owned by 316 Guilford Avenue LLC, controlled by Richard W. Naing, and is on the footprint of a proposed skyscraper. Lonnie Fisher, project manager for RWN Development Group, says “we do not care to make any comment on the liquor application at this time.” The license application states Heaven has a three-year lease on the building for $15,000 per month.

John Giorgilli would not answer questions about Heaven during a phone interview on Jan. 28 unless, he said, City Paper gave him “final proof and approval of whatever is written” about the deal. When asked if he had a financial stake in the proposed club, his response was, “No, not at this time.”

Brown says the plan for Heaven is for it to be like Hammerjacks was–a place for large crowds to gather for a good time. “It’s going to be just basically like it was before,” he explains, “for enjoyment, for partying.” Brown refuses to say whether he has a monetary stake in the club, stating only that “I’m going to be a part of it. As for John Giorgilli, Brown says, “we’re friends, business friends.”

For 12 years, Brown’s job has been, as he explains it, to “assist, teach, and counsel mildly mentally challenged adults” for the National Center on Institutions and Alternatives, a Woodlawn-based nonprofit that promotes ways other than incarceration and institutionalization to help troubled people. Brown says he’s never before been on a liquor license and is not entirely familiar with what the requirements are.

“As a juvenile, there was some stuff,” Brown says of his own criminal record. “But I thought that was expunged.” When reminded that public records indicate that a man with his name and birthday was convicted of breaking and entering, in 1986, and of theft, twice, in 1993–long after Brown passed his juvenile years–he exclaims, “You have a computer there and you can look that up?” He asks for the web address, says, “I’m going to look that up,” and abruptly ends the phone call.

Subsequent attempts to reach Brown for this article were unsuccessful. Whether his record of criminal convictions came up in the Liquor Board’s required review of his background was unclear as of press time, as was the question of whether Brown’s theft-related background, which includes a history of incarceration, bars him from being on a liquor license.

“Leroy Brown, I didn’t know he didn’t have a clean record, and that pisses me off,” Giorgilli says. As for his own background, Girogilli owns up to having one felony conviction–“and that’s under appeal,” he says, “so that doesn’t even really count, according to my lawyer. I served jail time, I paid restitution, I paid my debt to society, and it’s under appeal.”

Giorgilli refused to discuss or confirm details of his criminal charges and declined to have an attorney explain any possible discrepancies in the online court records, which show he was guilty of second-degree assault and false imprisonment in 1997, drug possession and telephone misuse in 1998, a traffic violation with $14,000 in court costs and fines in 2000, and theft and passing a bad check in 2005. A pending sentence-modification motion was filed in the drug case in 2005. His arraignment on the open assault charges was held on Jan. 7, though no court date had been set as of Jan. 28.

Melvin Kodenski, a veteran lawyer for clients appearing before the Liquor Board, is the attorney for both parties in the license transfer for Heaven. At a Jan. 24 hearing, Kodenski appeared before the board with Craig Stanton, the current owner of the Red Lyon liquor license that owners are hoping to move to Heaven. The Red Lyon shut its doors last July, Kodenski told the board. Since inactive licenses die for good after 180 days of disuse, unless a 180-day “hardship extension” is granted, Kodenski asked the board to extend the license’s life for another six months.

“This is the license that’s up for transfer to John Giorgilli for the old Hammerjacks,” Kodenski said. “So while the board’s mulling that, we’re asking you to give [Stanton] an extension.”

The board agreed, pushing back the deadline for transferring the license to July 9. Thus, if Stanton’s Red Lyon license does not go to Giorgilli, as proposed, Stanton still has time to find another buyer.

In the Liquor Board’s conference room the day after the Red Lyon’s extension, board spokesman Paige is reminded that the circumstances surrounding Giorgilli’s application for Heaven are similar to a case uncovered by City Paper 12 years ago. That situation involved a large club called the Royal Café slated for the old Sons of Italy Building on West Fayette Street downtown. In that case (“The High Life,” Jan. 3, 1996), Kenneth Antonio “Bird” Jackson, owner of the Eldorado Gentleman’s Club and a felon and former lieutenant in “Little Melvin” Williams’ drug organization, appeared to be the co-owner (with his mother, Rosalie Jackson) of the proposed club, but a high-school guidance counselor named Mary Collins applied for the license. Though the Liquor Board approved the Sons of Italy license, the club never opened and Jackson eventually sold the building to the University of Maryland.

Why, Paige is asked, is there a prohibition on felons being on liquor licenses when felons are permitted to own and operate liquor-licensed businesses? Isn’t the point to keep felons from owning and running nightclubs, whether they are on the license or not?

“That’s a matter for the legislature,” Paige responds. “The law is the law. We just administer it.”

Club Dreams: The Paloma’s crew follows its bliss in West Baltimore

By Van Smith

Published in City Paper, May 3, 2006

Paloma’s, the Mount Vernon nightclub whose run on West Eager Street from 1999 to 2003 started strong but fizzled in debt by the end, is planning an invitation-only reopening at its new location May 5. The invitations, which were gift-wrapped and delivered to the City Paper editorial staff April 26, announce that “the spirit and energy of Paloma’s has moved to Sowebo!” The catered, open-bar event promises five DJs, living sculpture, and valet parking. “Industrial sheik attire” is encouraged.

The new Paloma’s is marketing itself as “Sowebo’s Esoteric Nightclub,” and its new abode—at Ramsay and Woodyear streets, near the Mount Clare Junction shopping center—has been renovated to fit the bill. The concept and design of the club belongs to a middle-aged self-described artist who calls herself River, and it includes graffiti-style murals on the walls, fabric hanging from the ceilings, high-tech lighting, loungy furniture arrangements, computer stations, and sketch-pads with colored pencils. While the new Paloma’s isn’t actually located in Sowebo—a Hollins Market-centered arts-community concept dating from the 1980s that lives on in the annual Sowebohemian Arts Festival—it’s pretty close.

River, in an April 30 telephone interview, points out that, unlike the original Paloma’s, she is not a part of the business running the new club. The liquor license is held by others: River’s daughter Charity Deeb, 34; a 26-year-old Ellicott City guitarist named Jason B. Crebs; and a 45-year-old man River calls her husband, Robert A. Fogle Jr., who says he works for BGE. Fogle, she emphasizes, is the main owner of the business. “I’m involved with Paloma’s in the concept and design,” she explains. “But my husband is the one who wanted to make it happen.” River lives upstairs, above the club.

The reason River isn’t officially involved with Paloma’s is because she’s consumed with “other projects,” according to its liquor-license application. She is preparing to open another club, Eris, in October. “I’m the owner of Eris,” River says, though both Fogle and Crebs appear in official documents as partners in Eris. She sketches out her plans: a 1,500-capacity live-music venue on the 500 block of South Monroe Street, about 10 blocks west of Paloma’s, where River says she plans to showcase “national and seminational acts,” drawing crowds from Washington.

She and Fogle and Crebs, operating as Monroe Street Properties LLC, have already closed on the real estate for Eris—a $1.8 million multiple-property deal with a $200,000 down payment to former owner Abdolreza Parvizian, a D.C.-based rug merchant who, River says, holds the note for the transaction. The loan involves $10,000 payments each month, with the balance due after two years. On top of the $350,000 deal for the Paloma’s property, these transactions add up to rather large commitments to draw entertainment revenue from West Baltimore.

“We have some investors,” River explains, without elaborating, and adds that part of her enterprising spirit is to bring life to neglected places. If Eris’ business plan, which was submitted to the Baltimore City Board of Liquor License Commissioners during its ongoing licensing process, is borne out, it would be a surprising shift in the neighborhood’s lagging fortunes. In its first year of operating, the plan states, Eris will host “at least five high-profile, sell-out concerts of nationally recognized acts, such as Moby,” a famous electronic musician.

A look at River’s previous stabs at success suggests that her plans should perhaps be taken with a grain of salt. As the original Paloma’s was withering, River’s attempt to gain federal bankruptcy protection in 2002 failed. (City Paper was listed as a creditor in that case, but publisher Don Farley says the $1,180 owed was written off as bad debt.) According to Maryland court records, River has a total of 13 outstanding judgments against her, some dating back to the mid-’90s, for a total of more than $82,500, not including interest and attorneys’ fees. Those cases are against River personally, and do not include judgments against her various defunct companies. Fogle, meanwhile, emerged from bankruptcy protection in 2000.

Judy Laylon, a retired Harford County public-school teacher, is one of River’s creditors. The wife of retired postal worker and military veteran Leonard Laylon of Bel Air holds a $16,000 judgment against River. Because she is hard of hearing, Leonard Laylon answered questions for her.

“When the judge ordered [the judgment]” in 2004, Leonard Laylon recalls, “we thought we could find this woman, but she stayed one step ahead of us.” After loaning the $16,000—which Leonard says Judy Laylon did because she believed her brother Caitlyn Lance Antrim, a postoperative transsexual son of a former U.S. Navy admiral and an international-law expert, was a partner in Paloma’s—the Laylons came to the conclusion that they’d been duped. Although Antrim was a Paloma’s liquor licensee, the Laylons later decided that the business, in fact, was all River’s. (As of press time, Antrim could not be reached for comment.)

“I was told so many stories” about the ownership of the business and the real estate, Leonard says over the phone, “that I’m not sure what to believe.” In the background, Judy Laylon proclaims, “I want my money!”

Another creditor, Hail Haleem, was River’s landlord in Rockville in the mid-’90s. He says she parsed out partial payments on the monthly rent during her entire tenancy. “I’ve been following her ever since” says Haleem, who won a $10,437 judgment against her, plus interest, in 1995. “I’ve never written it off,” he says, adding that “this is the first time I’m actually learning that she’s in Baltimore.”

River, when asked about the court judgments against her, says that “things aren’t always as they appear.” Which brings up another issue: her real name. Records of past charges against her for driving while intoxicated, passing bad checks, and theft (she pleaded guilty and received probation before judgment in the 1994 DWI case, and prosecutors declined to pursue the other charges, dating from 1999 and 2002) show her legal name to be Martha Jane Biton. In more recent liquor board and corporate records, she is listed as “Martha River Bitton Fogle” or “River Fogle.” This confusion was one of several “material misstatements” that were unearthed during Eris’ licensing process that were brought up in a liquor board investigative report from last fall. The city liquor board, as a result of the report, is awaiting clarification pending license approval.

To explain her various names, River says she “went through a spiritual cleansing and was given a new name” a few years back. In the process, she continues, “a little girl named Martha Jane went away. I released her, and I released her pain, and I let her go. She’s free now, but River does exist.”

Haleem, meanwhile, is happy to have learned her various new names— he says when he knew her she was “Marti Biton”—because now he can look forward to pursuing repayment. “I want her to succeed,” Haleem says of River’s new enterprises, “because that just makes it better for collections.”

Friends of Ed Reisinger: Three challenge 10th District veteran

By Van Smith

Published in City Paper, Aug. 22, 2007

Edward Reisinger and his family own a tiny little bar in Morrell Park called Good Times, where amusement devices line the narrow walls. Reisinger, a Democrat, is the 10th District city councilman and chairs the Land Use and Transportation Committee, which in April recommended expanding the presence of such regulated devices in neighborhood businesses like his. The machines are known to be used for illegal gambling, yet the Baltimore Licensed Beverage Association, which represents bars and other liquor establishments, requested the bill, and its supporters have donated heavily to Reisinger’s re-election campaign. The measure still awaits a full City Council vote.

Let’s recap: A bar-owning councilman’s committee touts a law backed by his campaign donors to expand opportunities for illegal gambling at bars.

That is some old-school politics, but Reisinger comes from the old school. His father was a South Baltimore state delegate during the midcentury apex of the Stonewall Democratic Club’s since-waned power, when the late state senators George W. Della Sr. (father of today’s 46th District state senator) and Harry J. “Soft Shoes” McGuirk ran the show south of the Inner Harbor. Reisinger himself showed his Morrell Park colors three summers ago, when he got into a scrap with a convicted drug dealer who assaulted him after Reisinger stepped out of Good Times and confronted the guy for throwing trash in the street.

“The system took a drug dealer off the streets of Morrell Park, and that’s what I wanted,” Reisinger told the judge after his attacker got six months in jail.

Like its politicians, the 10th is traditionally old-school territory, and its boundaries are wide. Morrell Park’s Good Times is a long way from, say, Thumpers in Curtis Bay, but like their respective neighborhoods–and like the amusement devices found at both bars–they share a sense of lowbrow stability. Little seems to have changed in the last half-generation or so, just as little has changed in the neighborhoods between them: Brooklyn, Cherry Hill, Westport, and Lakeland. These are places where incomes are low and working-class traditions are old.

While many good jobs left long ago, the number of voters registered there has grown recently. According to the latest data from July, the Democratic electorate in these communities is nearly two-thirds of the district’s 15,345 registered Democrats, and it has grown by nearly 1,500 voters since July 2003, prior to the last city primary. If Reisinger has a territory, this should be it, since all three of his challengers hail from the district’s northern, more posh quarters on the South Baltimore peninsula.

Donnie Fair, 30, is a community activist and computer-network administrator who grew up on a farm, moved to Baltimore in 1999, and bought a rowhouse on Fort Avenue in South Baltimore in 2005. Terry Hickey lives in Federal Hill and is a 37-year-old community lawyer who started a nonprofit to help kids grow up to be good citizens. Hunter Pruette, a 31-year-old North Carolina native, is a criminal defense attorney who moved to South Baltimore after working in 2003 as traveling chief of staff of U.S. Senator John Edwards’ presidential campaign.

These three challengers live in some of the hottest neighborhoods in the Baltimore real-estate market, where a new breed of residents has been drawn. Long-rooted families have moved on in recent years, getting top dollar for their ancestral rowhouses. Taverns have changed hands, accommodating new tastes. Aging industrial sites have been rezoned and redeveloped. The yuppies took over.

Times have changed since 1990, when Reisinger, as an appointed councilman (he lost re-election in 1991, and regained a seat in 1995), told The Washington Times in an article about Locust Pointers that “I don’t think anybody’s moving out. They’re hanging tough.”

Here’s the twist: Reisinger’s committee chairmanship has involved facilitating the district’s fast-paced redevelopment that has supplanted the old-timers with newcomers–including his challengers in this race. Voters on the South Baltimore peninsula between Middle Branch and the Inner Harbor make up a little more than a third of 10th’s Democrats, and 1,974 more voters are registered there today than in 2003. The downside: Only 625 of them are Democrats. But they vote; average turnout by Democrats voting in these precincts in 2003 was high at 42 percent, compared to 33 percent in the rest of the district.

But if this is the challengers’ political base, and they’re splitting it three ways, they’ll have to look beyond the peninsula for success.

A measure of Reisinger’s support comes from the results of his last election, which he almost lost. It was a similar scenario in 2003, with three challengers. Reisinger won with 39 percent of the vote, but the only precincts where the majority voted for him were in Locust Point, Morrell Park, and South Baltimore. Nicole Pastore-Klein got more than half the votes in Federal Hill and ended up with 36 percent districtwide, while Charlie Metz took 21 percent and a fourth candidate barely made a showing. Thus, the challengers undermined one another by splitting the large anti-incumbent vote and Reisinger kept his council seat by a hair.

Could it happen again?

“Based on Ed’s approach to his campaign,” Hickey responds, “that’s what he thinks is going to happen again. But there is a lot of anti-Ed sentiment, and whoever gets that [voting bloc] wins.”

“I don’t necessarily agree” that a reprise of 2003’s split vote is in the offing, Pruette responds. “People want new ideas and new leadership and they’re tired of the same old promises.”

“Well, sure we’re going to split the vote,” Fair says. “But that’s only because that’s the way math works. I’m going to win because I have a different kind of connection to voters than these other guys.”

Reisinger sees these thirtysomethings as “political opportunists” who are misperceiving a weak incumbent where there is none, and trying vainly to cash in. “I’m not being arrogant,” he explains, “but these are three people who want to run, and they are running from the peninsula. That’s not something I can control. If they want the job, they got to hit the rest of the district.”

All three challengers have some money to spend, but only one has anything like Reisinger’s war chest, which on Aug. 14 carried a balance of $36,600: Pruette, with $29,400, thanks to a national donor base that stretches from Washington to Dallas, Chicago, and Los Angeles. Hickey’s balance of $9,800 is next in line, and his top donor, with $4,000, is Leonard Bush of Pasadena in Anne Arundel County, better known as “Len the Plumber,” who grew up in Morrell Park. Fair had about $1,200 on hand, just enough to cover outstanding bills. But one of Fair’s most generous donors–Joyce Bauerle, president of the Locust Point Civic Association, who gave $300, compared to the $50 she gave Reisinger last year–carries some clout on the peninsula.

Raising funds to underwrite even a modest campaign can be a Sisyphean task, especially for neophyte challengers like Reisinger’s opponents. It’s not so hard for most incumbents, but Reisinger, as the chairman of the Land Use and Transportation Committee, has it especially easy. The position draws big-money political donors, since legislation developers need passed must be approved by his committee first. (It also helps to have Good Times in the family; the bar contributed $3,100.)

Reisinger’s political fundraising, as with many politicians’ campaigns, can be directly tied to his legislative record. He was sole sponsor of two enacted bills that came through his committee to permit redevelopment of the old Chesapeake Paperboard property in Locust Point, for instance, and his efforts were rewarded with a total of at least $3,950 in campaign donations from the developer, his lawyer, and his family members. Another enacted bill, sole-sponsored by Reisinger and approved by his committee, was to down-zone a Locust Point property on Beason Street from manufacturing to residential use, prompted donations totaling $1,575 from the owner and his lawyers. There are other examples in Reisinger’s record of the same pattern, though there was one notable example, the Harborview development, in which he sided against the developer.

“Any developer who comes to me, I say, `You got to go to the community first, and if they see it as a win-win, then I’ll introduce the bill and I’ll support it,'” Reisinger says, explaining his protocol for handling land-use bills. As for how the same developers often donate to his campaign, he implies that they’re simply in the list of potential donors whom he calls. “I hired Colleen Martin-Lauer as a consultant to do my fundraising,” Reisinger explains. “And she has a book with a number of businesses and individuals that I call, tell them my spiel, and ask for a contribution. It doesn’t mean I carry water for them.”

Fair’s gloves come off when he talks about how Reisinger raises money: “It’s easy to raise money when everyone knows you’re for sale.” Hickey says he doesn’t want to hire a fundraiser–“I don’t want that book to raise money from.”–but acknowledges that if he becomes an incumbent running for re-election, “you may end up writing an article later that says I’m a hypocrite.”

Pruette says Reisinger’s fundraising strategy is “very common, and that’s the power of incumbency. But you have to be careful to represent your constituents and not those who fund our campaign. People have come to expect better than that, and I think that’s part of this race.”

In this race, the three challengers are all trying to slay a giant–Reisinger, the incumbent, who has all the trappings and advantages of longstanding power. If Reisinger wins, then his vote-splitting opponents, despite their intentions, will actually have served as his friends.

Law of the Land: Maryland General Assembly works to restore weakened Critical Areas Act

By Van Smith

Published in City Paper, March 31, 2004

Shortly after Tropical Storm Isabel’s floodwaters hit the Chesapeake Bay shoreline last fall, carrying away chunks of waterfront land and destroying vast sums of bay-side investments, the Maryland Court of Appeals relaxed key provisions of a 20-year-old law restricting development within 1,000 feet of the water (“Time and Tide,” Oct. 22). Backers of the Critical Areas Act of 1984 assaulted the court’s opinion and argued that the law had slowed the pace of coastal construction for nearly a generation, and thus, by constraining new development where storms exact the heaviest tolls, had prevented further losses from Isabel. But the judges’ blow to the law, coming from the state’s highest court, was final. The job of straightening its spine now falls to members of the Maryland General Assembly, who are now attempting to trump the court’s move with legislation to restore the law to its original ecologically protective intent.

The Critical Areas Act, which bans new construction within a 100-foot buffer zone closest to bay waters and curtails it in specified areas within a 1,000-foot strip, is overseen by the state Critical Areas Commission for the Chesapeake and Atlantic Coastal Bays. The commission’s chairman, former Republican state Sen. Martin Madden, was sworn in less than a year ago and immediately alerted lawmakers of his hope to firm up the act’s enforcement provisions. Then came Lewis v. Department of Natural Resources, a case before the high court in which Edwin Lewis, an apparel-industry executive, belatedly sought permission to build a hunting lodge and cabins on a tidewater hummock he owns in Wicomico County. By the time Lewis had applied in 2000 for a county variance to build on his site, which is in the critical-areas buffer zone, construction had already started.

The seven-member court’s 4-3 decision relieved Lewis, and therefore other landowners in the critical areas, of the burden to prove that their proposed building projects won’t harm the bay. Instead, local governments now have to show that such projects would harm the bay. That’s a tall order for governments to fill, say Madden and others who criticized the court ruling. Asking cash-strapped counties to prove the harm caused by each proposed project in the critical areas, Madden says, would effectively undermine the law’s intended goal of protecting the shoreline from damaging development. To make matters worse, the decision condoned Lewis’ course of action: build first, seek permission later, then claim the remedy–the removal of illegally built structures–is an undue hardship.

“The ruling turned everything on its ear,” says Dru Schmidt-Perkins, executive director of the 1,000 Friends of Maryland, a nonprofit coalition that advocates environmentally sound growth. “Twenty years ago, when the law passed, we said, ‘We all agreed that we’re going to protect this fragile shoreline,’ but now we have to come back and re-establish the intent of the law. I find that extraordinary.”

In the decision’s aftermath, Madden, like the many homeowners repairing post-Isabel wreckage, set about patching up the court’s blows to the Critical Areas Act. He has been working his persuasive magic on his former colleagues in the state legislature, and his efforts appear to be paying off: The legislation, introduced this session, is moving through the General Assembly process at a brisk pace with little controversy or fanfare.

“The main bill basically brings us back to where we were prior to Lewis,” Madden says. It clarifies the law’s overall intent to protect the bay and plugs the holes shot through the law by the Lewis decision. It also increases penalties–from the existing maximum of $500, to a proposed $10,000–for violations. And it gives local governments the option of asking the state Critical Areas Commission to handle tough enforcement cases. The measure was supported by a broad array of interests–everyone from realtors and builders to the Chesapeake Bay Foundation and the Maryland Association of Counties–and passed, 41-6, in the Senate on March 22. The House will consider the bill after a hearing scheduled for April 2.

“It was agreed by everyone that we needed to go back” to the law’s pre-Lewis strength, says lobbyist Bill Castelli, of the Maryland Association of Realtors. “[But] everybody needed to get comfortable that the bill wouldn’t go beyond that.”

A comfortable consensus was reached, Castelli adds, after a few, minor clarifying amendments were added. Still, he points out a cautionary note about future litigation over a restored Critical Areas Act: “You just can’t predict what will and won’t get challenged in court.”

Field of Schemes: A cavalcade of Baltimore projects, done and undone

By Van Smith

Published in City Paper, Nov. 12, 2003

It may sound crass, but development is pure and simple speculation. One can dress it up with high-minded jargon–“public-private partnership” or “urban renewal”–but the game remains a tangled, chancy knot of land deals and debt-fueling projects aided or underwritten by taxpayer dollars.

And so it’s been played in Baltimore since Colonial times, when Baltimore Town, Jones Town, and Fells Point were first laid out in the 1730s. As historian Sherry Olson writes at the beginning of her authoritative tome Baltimore, “the city itself was to be the great speculation,” with its growth driven from the start by the overlapping financial affairs of private and public interests.

Similarly, developers today commonly reduce their risks by relying on public money to build on scarce harbor-front land. This business-government alliance, then-Rouse Co. chief executive officer Mathias DeVito told City Paper back in 1995, “is a part of our culture here.”

Sometimes this development dance has worked, sometimes it hasn’t–and sometimes it turned out differently than intended, or was never done at all. The high-end residences of Mount Vernon Place, built in the 19th century, comprise what many say is the most beautiful urban space in the United States. The high-end condo complex Scarlett Place, on the other hand, looks as much like a Lego creation today as it did in the go-go 1980s, when it rose in the footprint of a closed President Street warehouse. The 6-year-old Columbus Center sits forlornly at the Inner Harbor, an unmitigated failure as a science-based tourist attraction. Next door, though, the brand-name draws at the Power Plant (Barnes and Noble, ESPN Zone, Hard Rock Café) have preserved a striking century-old relic. Harborview Towers along Key Highway broke ground 14 years ago and is only half-built, its lone high-rise bearing a cartoonish resemblance to a lighthouse, but the Howard Street Arts District, meant to revitalize the old west-side shopping district by nurturing the muses, was never built at all.

Successful or not, Baltimore’s drive to build and rebuild has been inexorable, even in the face of the Great Fire of 1904, the Great Depression and other financial disasters, the tenacious flight of jobs and residents to the suburbs, and the riots of 1968. Housing, highways, hotels, industry, office space, public transportation–it’s all gone up, in one way or another, shaped by geography (especially the city’s waterfront and watersheds) and the resolve and resources of the rich and powerful, be they in business or government. And thus we, for better or worse, have places to live, work, play, shop, and travel–places whose stories, sampled below, echo the strains and harmonies of Baltimore’s development.

The Fairfield Ecological Industrial Park

When Baltimore was awarded a $100 million federal Empowerment Zone grant to boost jobs for poor residents in 1994, city leaders confidently called the proposed Fairfield Ecological Industrial Park the “crown jewel” of the plan. Located on a South Baltimore peninsula far from downtown, the industrial park–a polluting cluster of oil-tank farms, factories, and scrap yards–was to become an economic engine fueled by recycling and reuse; one plant’s waste would be another’s raw material. Residents of the city’s other two Empowerment Zones, one each in East and West Baltimore, were expected to fill the coming jobs, along with the handful of people still living in Fairfield, and businesses would claim tax benefits for hiring them.

Then, nothing really happened. There were planning symposiums, community meetings and strategy sessions–even enrollment in a federal program to make environmental permitting more flexible for businesses there. Much feel-good rhetoric was spun about the eco-industrial park. Then-Mayor Kurt Schmoke and luminaries from Washington used it in speeches as a model for the economy of the future. The city made ambitious promises for capital improvements–new roads, new storm drains, new curbs and lighting. In 1997, the state passed brownfields legislation to make it easier to redevelop abandoned and polluted industrial land, a step that ostensibly would help facilitate the eco-industrial park plan.

Other than the wholesale buyout by the city of the homes of the remaining 300 or so Fairfield residents in 1998, little change came about. In 1999, the eco-industrial park was withdrawn from the flexible-permitting program for inactivity and lack of interest. By 2000, the city was already quieting on the ecological part of the equation, though efforts to bring new business to the area continued. The city has spent about $5.5 million to date on road and drainage improvements in Fairfield. A granite-slab company was enticed with a $150,000 city loan to move there in 2000, the same year that the city forgave $300,000 in debt owed by the Struever Bros. Eccles and Rouse development company, which has been trying since 1989 to revive a polluted portion of Fairfield called Port Liberty. In the end, though, the eco-park concept was abandoned, and Fairfield remains the same old petro-chemical industrial park that it’s been for decades.

The Middle Branch Waterfront

In 1724, just six years before Baltimore Town was founded on the North Branch of the Patapsco River, landowners in the area approached the legislature with plans for a town at Spring Gardens, near where the Gwynns Falls empties into the Patapsco’s Middle Branch in what is now known as South Baltimore. Their efforts were blocked by John Moale, who owned the land and preferred to mine for iron there–which he did until he died in 1740–so a first settlement was chosen instead on the North Branch. Thus, if not for Moale’s self-interest, Middle Branch would be Baltimore’s Inner Harbor today. Instead, it’s Baltimore’s other, overlooked waterfront.

The Middle Branch was committed to industrial purposes during Baltimore’s formative years in the 19th century. The Baltimore Gas and Electric Co.’s precursor in the 1850s chose Spring Gardens as the site for a gas-making plant, then later chose Westport, across the river, for a giant coal-fired power plant. The Carr Lowery Glass Co., which closed this year, first set up shop on the Middle Branch’s shores in 1889. Rubble from the 1904 fire was pushed into Middle Branch marshland, as was fill from city subway excavations in the 1970s.

The waterway’s other favorite use was recreation, as city dwellers at the turn of the 20th century chose places like Ferry Bar Park and the various rowing clubs dotting the shoreline as weekend destinations. They were always cheek-to-jowl with the smokestacks, but today the BRESCO trash incinerator is the only stack still belching.

Nascent signs of new investment have started to peek through the industrial detritus of Middle Branch. On the former Port Covington railroad yards sits a new Wal-Mart and Sam’s Club that opened in 2002, thanks in part to tax credits. Nearby, at the dilapidated city-owned marina next to the Hanover Street Bridge, a team of investors is planning extensive renovations, including a new restaurant and entertainment venue. The National Aquarium had been planning a $30 million Center for Aquatic Life and Conservation at a 7-acre city park on the west side of the Hanover Street Bridge, but it recently ran into cleanup problems.

Also poking up from the urban detritus–and the refuse and sewage coming into the Middle Branch from the Gwynns Falls and various storm drains–is an ecology of sorts. Herons, kingfishers, and even beavers frequent its shores and rotted piers, which themselves have become vegetated islands of habitat.

For the last quarter century, city planners and local architects have been calling for the Middle Branch to become the city’s “second waterfront” by creating access and amenities along its shores and promoting recreational uses like fishing, biking, and picnicking. As the city strives to solve its extensive leaky-sewer problems and also installs a debris collector to keep trash from entering Middle Branch in the first place, the degraded waterway may yet become a destination again–this time without the heavy industry.

Coldspring NewTown

Back in 1970, when Abell Foundation President Robert Embry was the city’s housing commissioner, Moshe Safdie captured his imagination. The young Israeli-born Canadian architect had wowed the crowds at Montreal’s 1967 World Fair with Habitat, a complex of modular, mass-produced housing and retail space arranged as a self-contained community for urban markets. With residents fast abandoning Baltimore for the surrounding suburbs, Embry and other city leaders were willing to commit urban-renewal funds to try new things–even something along the lines of Habitat–in order to keep the city’s dwindling middle class. And try they did with Coldspring NewTown.

Located just south of Cylburn Arboretum between Greenspring Avenue and the Jones Falls, the project was initially designed to straddle Coldspring Lane on 370 acres and comprise 3,700 dwelling units for 12,000 people. Some were to live in “deck houses”–raised concrete, aluminum, and-stucco condominium complexes with parking beneath the homes and walkways and green space throughout–and many more in apartment buildings, including a top-entry high-rise to be built down the face of the old Woodberry Quarry. The price tag was $200 million, with $50 million coming from federal coffers. City voters approved a bond sale to insure condo buyers’ mortgages.

In 1977, the first phase was completed: 252 deck houses. They were snatched up by a mixed bag of professionals–including high-ranking city bureaucrats, architects, lawyers, teachers, doctors, and journalists. More public money was spent to lay the foundation for the project’s next phase–the NewTown part of the concept, with stores and community services–when Ronald Reagan became president and nearly turned off the spigot of federal funds that had fueled Baltimore’s urban-renewal gravy train during the 1970s. The project stalled, only a fraction completed.

Until the 1990s, when construction started on a different tack–a hundred or so suburban-style homes along Coldspring NewTown’s boundary with the Cylburn Arboretum–the isolated development was surrounded by vestiges of its failure. Mounds of earth had been moved, sewers and roads installed, foundation work laid down, but much of it was left eerily idle. Almost 900 people, however, now live in what had been uninhabited woodland. Their combined property taxes contribute approximately $500,000 per year to city coffers. That’s not much return for tens of millions of dollars in public investment–unless, of course, you’re one of the original condo buyers who scored unique urban homes for $30,000 to $60,000 with low-rate, bond-insured mortgages.

Inner Harbor East

Three or four decades ago, Inner Harbor East–a 20-acre parcel around where the Jones Falls empties into the harbor, right next to Little Italy–was slated for a highway interchange. After that proposal crashed and burned, thanks to an epic political battle that spawned several careers (including that of now-U.S. Sen. Barbara Mikulski), a decade-long community planning process started to create a vision for the property.

What was ultimately agreed upon, in a plan made official in 1990–a cluster of upscale townhouses, a marina, offices, retail space, and an 18-story hotel–was “to balance all the interests of neighborhood life with the interests of commercial developers,” as then-Mayor Schmoke explained at the time. New buildings, all agreed, were to have low elevations and a street-level orientation, so as not to overshadow the rowhouses and restaurants of nearby Little Italy and Fells Point.

With a hard-fought plan in place, community activists rested easy. The city held up its end of the bargain, building roads and water lines and completing marina renovations, and then started to sweeten the deal for the property’s main owner–H&S; Bakery owner John Paterakis.

The favors started with $1.5 million in federal money, which was chipped in for a $9.2 million office and apartment complex where Sylvan Learning Systems is now based. Then the city subtracted first $1.7 million, then another $1 million, from Paterakis’ $4 million share of the costs for infrastructure (roads, water lines, marina renovations, etc.). Then, in 1995, the city gave Paterakis another $1.8 million in financial breaks, and deferred his $6.5 million obligation to purchase two city-owned parcels in the development area. But that was just for starters.

The real surprise at Inner Harbor East didn’t come until 1997. At that point, the city’s $150 million Convention Center expansion was completed, but the center needed about 1,000 more hotel rooms in order to support the expected growth in bookings. Two-thirds of the Convention Center’s cost had been covered by the state, so legislators all around Maryland were anxious to see it succeed.

To the surprise of many, Inner Harbor East–about a mile from the Convention Center–was chosen as the Convention Center headquarters hotel’s home in 1997 over two other closer sites. What’s more, Paterakis’ proposed hotel blew the Inner Harbor East plan out of the water–as initially approved, his hotel was to be a 48-story behemoth, costing nearly $150 million, with a third of the cost covered by public funds.

Ultimately, Paterakis’ Baltimore Marriott Waterfront Hotel rose 32 stories–not quite twice the height spelled out in the 1990 urban-renewal plan–and vocal critics have tempered their complaints since its construction was completed in 2000. After all, with a significant public stake in the project, its success significantly impacts city coffers. And now it is joined by a proposal for a $130 million Four Seasons hotel and condo complex made up of two 20-story towers, also receiving healthy public subsidies. So much for Inner Harbor East having the scale and feel of the quaint neighborhoods surrounding it.

HOPE VI

President Bill Clinton came and went, but Baltimore will bear the mark of $150 million his administration gave to the city’s public-housing program for years to come. The money came in the form of HOPE VI grants, and they were used to demolish and replace antiquated public-housing high-rises with mixed-income townhouse developments for homeowners and public-housing residents alike. Lafayette Courts, Hollander Ridge, Flag House, Murphy Homes, Lexington Terrace, Broadway Homes–for nearly 50 years, these were familiar addresses and home to thousands of Baltimore’s poor. Now they are all gone, some of them replaced with new housing–but for vastly fewer people, and less of them poor, than were living there before.

“When the towers come down, the tenants have to go somewhere, and what they do is fan out to nearby working-class neighborhoods, using federal housing vouchers to pay the rent,” according to an article in the October issue of Governing magazine. “Most of these are aging, fragile communities struggling to stave off dysfunction themselves. A large influx of welfare families brings increased crime and disorder and sometimes threatens a neighborhood’s very survival.” In Baltimore, a study released this year by the Johns Hopkins Institute for Policy Studies found this effect to be the main problem with the HOPE VI program.

The critics aren’t saying the old high-rises–which Al Gore called “monuments of hopelessness”–were preferable. But they make the argument that big-money, big-impact moves like imploding high-rises and replacing them with mixed-income townhouses fails to address the complex root causes of poverty and all its ills. In fact, some call the program government-funded gentrification and complain that HOPE VI amounts to little more than a massive dereliction of duty for the nation’s giant public-housing system, which is supposed to support the poor. Residents lucky enough to obtain housing at the suburban-style complexes, though, find a lot to like–they’re new, clean, and generally safer than what they replaced.

The Public Rails

Controversial highway plans to link interstates 70 and 95 near Fells Point, then build a bridge over Locust Point, fell through in the 1970s–but not before a portion of I-70 was constructed through a slice of West Baltimore neighborhoods. East-west traffic in Baltimore and those West Baltimore communities have struggled ever since. But part of the strain was meant to be relieved by rail-based public transportation, an idea that has never fully blossomed in Baltimore, despite its demonstrable boost to economic development in cities that have extensive systems.

Baltimore’s extensive trolley system had been phased out entirely by the early 1960s, thanks in part to the indirect efforts of General Motors to shut it down. The new generation of rails now consists of the 15-mile Baltimore Metro subway between Owings Mills and Johns Hopkins’ East Baltimore medical campus, and the 30-mile light-rail line between Hunt Valley and BWI Airport. Combined, the projects cost nearly $2 billion in public funds, with construction lasting two decades.

That price tag is nothing compared to a current proposal, announced earlier this year, to create a six-line, 109-mile, 122-station system for $12 billion over a period of 40 years. The extensive, expensive scheme, dubbed the Baltimore Regional Rail System, was cooked up by an advisory committee of the Mass Transit Administration and has the backing of heavy hitters like the Greater Baltimore Committee, a large and respected business group. But Gov. Robert Ehrlich’s administration is balking at its lofty ambitions, saying a rapid-bus plan may be a feasible alternative, given the tight state budget.

The chilly reception at the State House suggests Baltimore’s rail future, for now, has much more humble possibilities–such as a monorail to carry tourists around the Inner Harbor’s attractions. The idea has cropped up periodically over the last 25 years, most recently in the late 1990s, when then-Mayor Schmoke proposed a $210 million system that officials likened to the one at Disneyland. Others were reminded of the fictional Springfield, where the Simpsons, in a classic episode of the animated show, saw firsthand where monorails lead you–around and around in a runaway train sold to the public by a passing huckster. So, instead of rails for the Inner Harbor, the Greater Baltimore Committee is backing a $26-million electric tram system with dedicated lanes on existing roads. Either way, it sounds like tourists to Baltimore will have their public-transportation problems solved long before Baltimore as a whole does.

Time and Tide: Will the erosion of Maryland’s Critical Areas Act mean even bigger trouble when the next Isabel comes along?

By Van Smith

Published in City Paper, Oct. 22, 2003

Tropical Storm Isabel’s short visit exacted a pricey tribute on the Baltimore region’s shoreline. Thousands of homes were damaged and hundreds destroyed in Baltimore and Anne Arundel counties. Well water in many low-lying communities remains contaminated from the polluted floodwaters. Piers, boats, and boat-lifts were battered, broken, or carried away, while sea walls failed in some places, allowing Isabel to scour away chunks of earth from people’s properties. Bethlehem Steel’s Sparrows Point facility lost its multimillion-dollar power plant and had to close down production for six days. An Anne Arundel sewage-treatment plant also lost power, sending a hefty dose of untreated waste into Cox Creek near the city line. Baltimore City’s tourist-drawing waterfront choked on inventory losses, building damage, and missed business from Isabel’s historic tidal flood, which here and there breached the 100-year flood line. In all of Maryland, estimates of total losses from Isabel are in the hundreds of millions of dollars and climbing.

Given Isabel’s high cost and human suffering, it seems almost quaint to survey her effects on Baltimore County’s North Point State Park, a 1,300-acre tract of marsh, woodlands, fields, and bay-side frontage on the Dundalk peninsula between the Patapsco and Back rivers. But Steve Takos Sr., at 80 and after five surgeries in the past eight months, has good reason to visit on this sunny October afternoon. He first came here in 1937 as a duckpin-setter for a nickel a game, and later took tickets for amusement rides. That’s when it was Bay Shore Park, a resort on a trolley line that drew throngs from around the region to play on the water. One way or another, Takos has been working here ever since. When Beth Steel owned the property from 1946 to 1987, he served as a guide for Sparrows Point executives on lunch-hour hunting and fishing trips. Today, he’s a volunteer park ranger. His long past with the property now compels him to see how it fared in the flood.

“Holy Moses! I’ve never seen it this bad,” Takos exclaims as he stands at the foot of Ferry Grove Pier, where a cluster of waterfront buildings once sat, receiving visitors and trade from the Eastern Shore. Isabel tossed around the scattered remnants of the long-gone structures like so many grains of sand, creating high dunes of rock, brick, and Belgian block stretching back into the woods. Nestled among the mounds are hefty chunks from the shattered sea wall and pier, a section of which collapsed in a jumbled mass of cement and twisted rebar. “Thousand-pound boulders were just picked up and thrown” by the wind-driven waves, Takos marvels, adding that “this may have been worse than the storm of 1933,” which tore down the trolley line’s trestle bridge over nearby Shallow Creek.

Takos has already checked out the pounding the 1,000-foot-long fishing pier took (it’s closed indefinitely) and how storm-driven flotsam knocked the support posts of the restored trolley house out of whack. But he’s mystified by what he finds further up the park’s shoreline. Large trees toppled over a retreating bluff onto a newly expanded beach, where roughly 30 yards of high ground fell into the bay. A butte of sandy earth topped with grass and stones, eight feet high and five feet in diameter, was left standing like a sentry on the gouged-out shore. At its foot, a segment of old “corduroy road” was excavated by the bay’s storm-churned waters. Constructed of large timbers set side by side, the road served mule-drawn carts bringing building materials for the Bay Shore trolley line a century ago but has been buried for decades. The sudden reappearance of the corduroy road pleases Takos: “That’s one good thing [Isabel] did. I always said the tracks ran right through here, and there they are.”

He points to where a drowned section of Bay Shore’s sea wall pokes up through the tide a hundred or so yards offshore. Once a stout, six-mile-long barrier, he explains, the wall has since become an increasingly fragmented line of broken cement and rocks that here descends into open water, forming a shallow bay behind it. “There was all high land up to that sea wall,” he remarks while standing on the edge of the bluff. “Lost all of it in 60 years.” Takos has been around over the decades to watch firsthand as the bay swallowed up the land here. With Isabel’s help, it took another big bite.

The day after Takos’ visit to the park, on Oct. 10, a storm of another sort came down from the state’s highest court and took a bite out of the law designed to protect the bay’s shoreline. The 1984 Critical Areas Act governs development in almost 700,000 acres within a 1,000-foot strip around the Chesapeake Bay’s Maryland shoreline and virtually bans new construction inside a 100-foot buffer zone closest to the water–the so-called “critical areas” where new construction is reviewed, guided, and in some cases stopped altogether. In its final word on the case of Lewis vs. Department of Natural Resources, the seven-member Court of Appeals declined to reconsider a July decision that the three dissenting judges say hobbled the act. Unless the state legislature repairs the damage to the law–and it is expected to try in the coming session that starts in January–planning boards in the 16 bay-side counties and 45 municipalities affected by it can expect to see property owners try to exploit the Court of Appeals decision with new building proposals. Already, “it’s seeping into arguments that we are hearing on the local levels,” says Martin Madden, a former Republican state senator from Howard County who in late spring was named chair of the Critical Areas Commission charged with implementing the law.

North Point State Park’s eroding waterfront has a lesson to teach about the Critical Areas Act: Government may try to legislate development along the shore front, but nature bats last. Scientists expect the coming decades to bring more frequent and stronger storms for the Mid-Atlantic, as the bay rises in step with global sea-level rises. If the experts are right, North Point’s history serves as a graphic harbinger of what ultimately can happen to shoreline development: buildings and piers smashed by the sea, once solid ground eaten away and reclaimed by flooding and erosion. By paving the way for more bay-side development, the Appeals Court’s decision on Lewis virtually assures that more property owners will face those inexorable natural forces in the future, likely losing homes, improvements, and raw acreage in the bargain.

“The [Critical Areas] Act says it’s good to move people out of that buffer area for the bay’s sake,” says J. Court Stevenson, an ecologist and sea-level rise expert at the University of Maryland Center for Environmental Sciences near Cambridge. The law, he points out, theoretically gives the Chesapeake more of a chance to rebound from its various environmental ills by discouraging human activity directly on its shoreline. But, he adds, rising seas and violent storms “show that it’s also good to move people out of the buffer for people’s sake.”

Crafting a passable critical-areas bill back in 1984 meant pulling a few of its teeth. Thousands of undeveloped parcels were legally partitioned into buildable lots before the law took effect and grandfathered in, Madden and the Critical Areas Commission’s executive director, Ren Serey, explain in an interview, but there is no way to estimate how many or their combined acreage. And the law designates 5 percent of land as a “resource conservation area,” subject to a low development density of one dwelling per 20 acres, to be reclassified by local planning boards in a “growth allocation” process to allow more intense uses. The law’s untapped–and largely unknown–potential for future shoreline development is enormous. The only way to slow that growth is for legislators to change the law.

The law’s built-in weaknesses are the source of much browbeating from people who expected it to have done more to rein in waterfront development as its second decade begins. State Del. Joan Cadden, an Anne Arundel County Democrat and member of the General Assembly’s joint Committee on Chesapeake Bay Critical Areas, voiced this sentiment with great frustration at a July 7 committee hearing: “How do we allow them to do these things? I thought that’s what we were all about, making sure that kind of development didn’t happen anymore. I thought that is what we were here for.”

“You all need to get some teeth,” chided Calvert County Democrat Del. George Owings III at the hearing. He told the story of how novelist Tom Clancy cleared a wide swath of trees down to the waterfront of his Calvert County property, “and got a tiny little fine.” “Just pay the fine and take the view, that’s what’s happening here,” Owings said.

Madden had an answer to that. “Enforcement is spotty, inconsistent, and deteriorating,” he told the joint committee. “It’s easier [for property owners] to pay a $500 fine and freely develop the property.” His solution: “We will probably look for penalties in the area of $10,000 instead of $500. We will also work to allow the local governments to refer to the commission on a voluntary basis a violation that they feel maybe they just don’t have the ability to handle because they are overwhelmed with other issues.” Madden also pointed out that the commission has no powers to strengthen its rules or enforcement powers: “The legislature has to do that.”

Madden didn’t have an answer to a big-picture gripe from the committee’s co-chair, state Sen. Roy Dyson, a Southern Maryland Democrat: “The truth of the matter is, what has happened with the bay cleanup is that it has stalled. Million-dollar homeowners support the bay cleanup without understanding their own contributions to the problem.”

The contributions Dyson referred to are actually codified as “findings” in the critical-areas act, making it a matter of law in Maryland that human activities like building and tree-clearing and their cumulative effects harm the bay, while minimizing such activity aids in the bay’s restoration. But Dyson’s allegation of hypocrisy among wealthy waterfront property owners underscores one of the law’s most noticeable impacts: rising property values in the critical areas.

The ink had hardly dried from then-Gov. Harry Hughes’ pen before the land rush started on properties within its yet-to-be-drawn border. Prices started going up immediately, and they’ve never stopped. As a result, wealthier people have been supplanting middle-class waterfront owners. “McMansions are springing up where bungalows used to be,” an Anne Arundel County planner puts it. With the monied property owners come lawyers. From 1984 until 1999, the Critical Areas Act went largely unhindered by adverse court decisions. Then, before the Lewis decision came down, three cases hit the Court of Appeals in succession, and the unanimous rulings of the court knocked open loopholes for more development. As a result, the General Assembly in 2002 revisited and strengthened the act.

Enter Edwin Lewis and his lawyer, Raymond Smethurst Jr. of Salisbury. Working for apparel-industry giants Tommy Hilfiger and Polo Ralph Lauren had been good to Lewis, an avid hunter who’s long enjoyed the Eastern Shore at his waterfront estate. In 1999 he added to his idyllic holdings, buying up nearly 300 acres of Wicomico County marshland. In the middle of it is a five-acre hummock, a rise in the marsh with trees growing on it, where in early 2000 Lewis proceeded to build a hunting lodge, four cabins, and a shed–all of it without permits and all of it inside the 100-foot critical area buffer zone.

Construction was almost over before anyone noticed. Once the authorities caught up with Lewis, Smethurst stepped in, bringing his experience working for those accused on the Eastern Shore of breaking land-use laws. Lewis didn’t purposefully break the critical-area rules, Smethurst explained. Then Lewis sought a zoning variance to allow the lodge and one cabin to remain in the buffer area. When it was denied, Lewis had Smethurst appeal it all the way up to the top–and won, because the court ruled there wasn’t sufficient evidence to show the project harmed the environment.

To Ren Serey, who’s been the executive director of the Critical Areas Commission since 1995, the Lewis ruling was a serious blow both to the commission and to zoning laws generally in Maryland. First off, he explains, it shifted the burden of proof from the property owner to the government in assessing the potential harm a project may cause. Thus, instead of requiring property owners to show local planning boards why their projects would not cause harm, it’s now up to the government to show why the project would cause harm. “That’s new,” says Serey, “and in our viewpoint, a significant burden on local government, both in and outside the critical areas, because now they, not the applicant, have to prove the question of harm.”

The ruling also flouted “the self-imposed hardship rule,” Serey argues. Now, the fact that something has already been built without permits, and that the remedy–removing the structure–would be a “self-imposed hardship,” can be used to argue that it should be allowed to stay. “The court even said,” Serey continues, “that the fact that Mr. Lewis actually started constructing these cabins benefited everybody because he could use their construction to prove that he wasn’t causing harm.” Finally, Serey contends that the court overlooked the findings of the legislature about the cumulative human impacts that harm the bay.

Appeals Court Judge Alan Wilner minced no words in his dissenting opinion on the Lewis case, in which he was joined by two other judges. “This was not just a disagreement over a point of law,” he writes of the 4-3 ruling. “In my view . . . the majority Opinion was deliberately designed, and, unless the General Assembly acts swiftly and decisively, may be effective, not only to dismantle the critical areas program but to seriously weaken fundamental zoning and land use controls generally.” Wilner further wrote that the decision was as “an invitation to the very kind of lawless behavior that occurred in this case–ignore the law, destroy the habitat and build where the law does not permit, do it all in secret, and then claim hardship.”

The majority opinion on Lewis plays down the case’s broader impact. But within days after the Lewis decision came down on July 31, Madden recalls, “we had a hearing in Anne Arundel County where a local zoning examiner had a complaint by some neighbors that a person was building their house much larger than had previously existed within the sensitive buffer area. And it was pointed out that this person had already built it, so to tear it down would be a big inconvenience, but it is a self-imposed hardship, so be it. And the hearing examiner made the comment that, ‘Well, until three days ago, I would have thought that was the case.’ I suspect we’re going to hear a lot more of that.”

The build-first, ask-questions-later mentality is alive and well along the bay. Serey doesn’t know the total number of violations found annually, but says construction without permits is a regular occurrence and that they are usually discovered after a neighbor complains. If the Lewis ruling ends up encouraging lawlessness, as Judge Wilner predicts, and if the fines imposed for breaking the act aren’t increased, the mentality is likely to bloom, resulting in even greater investment in bay-side improvements. To Court Stevenson, the University of Maryland sea-level expert, the whole trend is ass-backward.

Stevenson is standing on what he thinks may be one of the highest points in Dorchester County, the waterside lawn of the Horn Point Laboratory near Cambridge. At the bottom of the grassy slope heading down to the banks of the Choptank River is a sea wall, with a tumble of large rocks behind it. Isabel’s flood tide breached both the wall and the rocks, allowing the bay to scour out large patches of earth and grass along the steep riverbank. Stevenson has worked here since 1972 and says he’s never seen a storm do this.

“We really can’t say what will happen with these storms,” he muses, “so that’s why talking about futures is dicey.” But he does know that the seas are warming measurably on on the Atlantic, which is fueling more hurricanes to hit the Mid-Atlantic coast. “We’re now prone to storm activity that 100 years ago we wouldn’t have seen, with hurricanes just lining up from Africa,” he says. “Isabel did this, and it wasn’t even technically a hurricane anymore. Get a category 2 or 3 hurricane in here, and really get a surge in here–instead of seven feet, say, get eight feet–and there’s going to be wholesale damage.”

So the damage from Isabel, Stevenson hopes, will be read as a warning sign to keep new development out of harm’s way. And, in planning circles, that’s exactly how Isabel was interpreted. “There was a large difference between what was forecast in terms of flooding and what ultimately came to pass,” Baltimore City planner Peter Conrad explains. “In some areas of the city and elsewhere, the water came above the 100-year tidal flood line on the maps used to determine the flood zone for insurance and permitting purposes.”

Ultimately, after a lengthy public process that has yet to begin, new maps could move that line farther inland. “We may add another half-foot or foot of elevation on all new construction” in the city’s flood-prone areas in order to reduce potential storm damage in the future. This “will take several years,” Conrad says, but its impact on shoreline development could be significant. “From the city’s perspective,” he concludes, “we want to encourage development along our tidal area, but we need for it to be safe for 50 or 100 years.”

Stevenson’s research has for years now been focused on trying to help planners like Conrad figure out what more storms and flooding could mean in the context of rising sea levels. The observed rise at the Baltimore City tide gauge is 13 inches from 1903 to 2003, but Stevenson says “most of us believe that we’re seeing an acceleration, and that the rise could be two or even three feet in the next century. Unless we get the greenhouse-gas problem under control–because that’s what’s really driving the rise, the warming atmosphere due to greenhouse gases–it’s just going to get harder and harder and harder in low-lying areas.

“But you’ve got to watch yourself when talking about this stuff,” he jokes. “If you start worrying about this too much, people start to wonder about your sanity.”

Stevenson reaches down and uses his index finger to draw in the sand a profile of a house, the shore, and the sea. “Here’s what Jim Titus says we should do,” he begins. Titus is the federal Environmental Protection Agency’s top sea-level expert, and has long been involved with how the issue pertains to the Chesapeake. “He says let the tide come up, move the houses back, and then buy shore front easements to protect the land in between. But it’s not clear where the money for all those easements will come from. I think it’s more likely that people harden the shoreline to keep the sea-level rise out, with sea walls or bulkheads. And that causes all sorts of ecological problems.”

“There are choices that sea-level rise confronts us with,” Jim Titus explained during a seminar at a national coastal-zone management conference held at the Baltimore Convention Center in mid-July. “But they boil down to this question: Are we going to hold back the sea, or are we going to let our wetlands migrate inland?

“In Maryland, property owners can hold back the sea where they choose to hold back the sea,” he continued. “The general policy seems to be to encourage armoring [the shoreline] and discourage coastal development.” But, he pointed out, conservation easements in Maryland–legal arrangements that, for a price, take away development rights from property owners–don’t affect the right to armor the shoreline, so there would have to be a change in the law to use easements to allow inundated wetlands to re-establish themselves further inland. “We simply haven’t yet completely decided what we intend to do,” he concluded.

Kerry Kehoe, who recently came to the Maryland Department of Natural Resources to direct its coastal program, shares Titus’ and Stevenson’s concerns about how to handle sea-level rise. But he also foresees people’s reactions when they get warning signs that the seas are coming too close to home. “Storm surges and flooding will send a message to get out of there,” he predicted at the coastal conference. “The physical impacts will start to make it obvious–erosion, flooding, higher water tables causing contaminated drinking-water supplies.” Along the undeveloped Chesapeake shoreline, Kehoe points out that “there are still plenty of potential wetland-migration areas” where bulkheads have not been constructed. “The bad news is those very same areas are under substantial development pressure–that’s where people want to live.”

That’s also where the Critical Areas Act was intended to limit growth and development. But, in Stevenson’s estimation, the law’s constraints have had limited–and sometimes dubious–effects. “I think it’s had an impact,” he says with a note of irony. “I’m not so sure it’s all positive, though.” The first thing that comes to mind is the land rush back when the law first passed, which created all those untold thousands of grandfathered tracts. Then there’s the issue of wealth and class: Rising land values in the critical areas mean the waterfront is less and less available to the working-class people who have traditionally lived along the bay. And finally, he points out–and Serey and Madden confirm this–the fact that the 1,000-foot critical-area line doesn’t move inland with sea-level rise, but remains based on wetlands maps drawn in 1972. Although the 100-foot buffer line does shift with rising sea-level, property owners are entitled to bulkhead back to the 1972 tide line.

“The act largely ignores the unavoidable issue of sea-level rise,” Stevenson contends, “and ultimately that’s going to reduce the amount of land subject to it.”

“In the long run,” Stevenson says of the Critical Areas Act, “it had a lot of good ideas, good concepts” about what harms the bay and the human role in that harm. But he says it “hasn’t really delivered” the goods in terms of lessening human impacts. “I don’t know exactly, but it seems to me it hasn’t stopped much development, even in the buffer zone.” He’s waiting for local governments to use up their growth allocations–something that Madden says is years away–because then, presumably, much of the new construction on vacant shoreline will cease. “When the growth allocation really runs out, that’s when I’ll be happy,” he says

Madden, though, defends the act’s impacts. Despite the grandfathering and the growth allocations, it still has significant muscle, he says, and the legislature is always free to strengthen however it sees fit. “We’re going to look for Senator Dyson and Delegate [Barbara] Frush to take the lead on that, based on our recommendations.” Dyson and Frush, the oversight committee’s co-chairs, did not return phone calls about possible critical-areas legislation to be introduced in the coming session.

In the meantime, Madden explains, about 2,000 projects go through critical-areas review each year, a process that sends the commission’s staff through a proposal’s details with a fine-tooth comb, looking to make sure the design and construction minimizes harm to the bay. And that process, along with the more stringent requirements in the buffer zone, has made for more sensible, if not less, development.

“It is going to be interesting,” Madden says, “to compare the damage from Isabel to affected properties that were built after the critical area law took effect, as opposed to properties that existed prior to that. Because I think you’ll find that the development that took place after the critical area law, where we protected the buffer as much as possible while still accommodating growth, had much less damage than pre-existing properties that were built within the buffer right up to the shore. There are good environmental reasons to have a buffer . . . but I think Isabel shows that there are good, sound economical reasons to have a buffer also.”

The question is, how protected is that buffer after the Lewis ruling? And if it is in fact gutted, will expensive, newly developed properties soon face the fate of the thousands of homes hit hard by Isabel–and, in the long run, the fate of Bay Shore Park. Sea-level rise and hurricanes will ultimately rule the shape and scope of future shoreline development, but for now, repeats Madden, shoring up the Critical Areas Act is “up to the legislature.”

Brown to Green: A South Baltimore brownfield becomes a rezoning test case

By Van Smith

Published in City Paper, Apr. 30, 2003

Race Street in South Baltimore has long been a demarcation line between working-class homes and bygone blue-collar jobs. Classic Baltimore rowhouses, block after tidy block of them, extend to the east of Race Street, while to the west lies the Spring Garden Industrial Area–acres of underutilized industrial land, some still productive, much of it vacant or cleared of structures, and a large hazardous-waste site where hundreds of tons of toxic waste were dumped decades ago.

After an April 24 hearing, the Baltimore City Planning Commission recommended breaching this divide by rezoning a two-acre heavy-industrial tract at Race and Ostend streets for residential development. If all goes as planned, the developers–1300 Race Street LLC–hope a warehouse on the site will be converted to condominiums, and that 18 townhomes with two-car garages will rise along the property’s eastern edge. With the commission’s thumbs-up, the proposal will now go before the City Council for final consideration.

The case is the first application of a developing framework of guidelines the city plans to use evaluate rezoning such brownfields for nonindustrial uses. “It’s an old Baltimore situation where industry and rowhouses come right together,” explained city planner Chris Ryer during the hearing. The quasi-public Baltimore Development Corp. (BDC), which works to spur economic growth in the city, has “started to develop some criteria for how we would evaluate these parcels” for redevelopment, Ryer continued. Known as the “Industrial Land Use Analysis,” the framework is not yet finalized but is far enough along that it could be applied to the Race Street conversion.

BDC executive vice president Andy Frank, in an interview before the hearing, explained that brownfields such as the Race Street parcel tend to lie fallow until moneymaking uses are found for them–and more money can be made from residential uses than from offices, retail, or industry.

“In many cases,” Frank said, “it is not unlikely that an industrial reuse will generate enough revenue to underwrite the cost of redevelopment. Some sites, though, are so dirty that they would never be anything else than industrial.”

At the Race Street property, the developers are seeing green in the potential for more homes in what has long been a hot market for housing in South Baltimore. Stephen Strohecker, a realtor and partner in 1300 Race Street LLC, says the new townhomes will likely sell for about $350,000, a somewhat higher price tag than the $250,000 or so that nearby rowhouses cost.

“Significant changes have come to South Baltimore since 1971, the last time the city undertook comprehensive rezoning,” Ryer told the commission, “but not enough change in the immediate area to justify” large-scale conversion of industrial land. “But BDC’s new criteria did give justification to extend an existing residential zoning category across the street to this property.”

The criteria, Ryer explained, are meant to evaluate the selection of marginal or historic industrial properties for rezoning “as long as the conversion does not compete with other activities in the area,” and, just as important, that it doesn’t start “a domino effect” in which more and more of Baltimore’s industrial land is converted to other uses, leading to a scarcity of industrial zones which might someday be needed again.

“Generally, the economy of Baltimore is changing, and has been over the last 20 years,” Ryer’s boss, city planner Susan Williams, told City Paper before the hearing. “We still have a manufacturing base, but we have other kinds of demand for land use–mixed-use, offices, commercial space. And the old loft-style structures of the past are no longer as useful for the industrial marketplace–they don’t want to build up, they want to build out. So there has been creative reuse of these older buildings.” As examples of this, she pointed to new or upcoming projects like Brewers Hill in Canton, Tide Point in Locust Point, and Clipper Mill in Woodberry.

Actually, as Frank points out, the trend goes back even further. The city’s tourism-encrusted waterfront all used to be industrial land, from Harborview on the south side all the way around the Inner Harbor East and Harbor Point on the north side, and has been converted to other uses since the early 1970s, by which time industry had largely abandoned the Inner Harbor.

“So it is not a new issue,” Frank said. “But it is new in that we don’t have as much industrial property to convert anymore, and there have been worries that there may be none left if we need it. So, about a year and a half ago, we decided to pause and get a good, comprehensive look at the demand for industrial property and determine what factors we should consider in converting more land.”

BDC hired Bay Area Economics, a San Francisco-based economic consulting firm, to come up with guidelines; the company completed a draft set of criteria last fall. “It’s still an evolving policy,” Frank explained. “But we tested the Race Street property against the criteria and we’re comfortable that it’ll be a better use. The main question was, would nonindustrial use negatively affect adjacent industrial properties? And we decided it wouldn’t.”

The surrounding residential community has voiced its support for the Race Street rezoning in letters to the Planning Commission. “The reaction has been positive,” South Baltimore Improvement Committee President Amy Grace says. “Any time we can turn an old, run-down, vacant property into something positive for the community, it’s a good thing.”

The Idea Man: Creditor says city rehabber is long on vision, short on cash

By Van Smith

Published in City Paper, Jan. 22, 2003

Last September, developer Charles Jeffries was on the cusp of winning historic-district designation for a large swath of East Baltimore (“Prophet or Loss?,” Sept. 25, 2002). He won, so nearly 5,000 structures in the newly dubbed Broadway East/South Clifton Park Historic District are now eligible for tax credits. The new district includes Perlman Place, Jeffries’ long-stalled housing-rehab project that landed him and his company on the losing end of a court judgment in 1999 for bilking three working-class women in a housing scheme. Jeffries hopes the designation will spur a critical mass of investment in the declining neighborhoods and is hard at work attracting new players to this long-decaying part of the town.

The effort, though, has left Jeffries on the wrong end of another lawsuit–this one from Goodwin and Associates of Frederick, the cultural-resources management firm that prepared Jeffries’ historic-district application at a cost of $47,000 but has yet to receive payment.

“He called me literally daily in December to give some reason or another why he hadn’t paid,” recalled the firm’s president, Chris Goodwin, in a recent telephone interview. Then, Goodwin says, “he pulled a disappearing act and dropped off the face of the earth.” When Goodwin couldn’t get a return phone call from Jeffries, and then couldn’t locate him at the Cathedral Street address on record with the state as the principal office of Jeffries’ Center Development Corp., he says he “smelled a rat” and asked his attorney to draft and file the lawsuit. On Jan. 18, Goodwin says, Jeffries was served the lawsuit at his house in Guilford.

Interviewed by phone on Jan. 16 (before being served the papers), Jeffries said he was unaware of the lawsuit and was not trying to avoid payment or evade service–behavior that was noted of Jeffries during the Perlman Place litigation. “I have lines of credit with all sorts of people who pay bills,” he explains, and this one “should have been paid. I think you are trying to paint some picture that I don’t pay my bills. I have never walked away from a debt that I owed, ever.”

Though Goodwin is pursuing payment from Jeffries, he remains a fan of the developer’s core idea: to redevelop long-abandoned urban tracts. “If you look at East Baltimore, the decay is palpable,” he muses. “And, God, what a housing stock–if it only could be brought back. The potential is huge; Charles Jeffries is right about that. But it requires capital, and I’m skeptical he has what it takes.”

Since winning designation for the new historic district, Jeffries has continued to be active on several development fronts. In November, he and several partners, including the Baltimore Cable Access Corp., the Arena Players, and Baltimore developer Jerry Lymas, announced their vision for the Media Arts Network School. The planned $450 million development would create a campus, a theater, and student housing in an area that now contains scores of blocks (including Perlman Place) that resemble post-war Dresden. Jeffries says his company is also “literally on the verge of starting” renovation of the long-abandoned, 115-year-old Lake Clifton gatehouse, a dilapidated city structure where he hopes to house Center Development Corp.’s offices.

Also in the works is what Jeffries calls a “complicated transaction” to transfer ownership of Mount Vernon’s historic Winans mansion from Agora Publishing to an anonymous donor represented by Jeffries, and finally into the hands of the University of Baltimore. The long-pending deal was first announced nearly a year ago. Bill Lynerd, UB’s vice president of university advancement, says that, “at least according to Charles, we are going to nail this thing very shortly.”