The history of Towson Station puts a spotlight on the pay-to-play culture in Baltimore County.

INTRODUCTION

Last week the Baltimore County Council, on a 4-3 vote, approved the revised contract of sale between Baltimore County and Caves Valley Partners for County property slated to be the site of a commercial development known as “Towson Station.” It is as good a time as any to look back at the history of this project.

When you do look back at the history, a clear pattern emerges.  Sometimes it is less obvious, but the pattern is always there: A bias in favor of the prospective developer, questionable decisions, rules bent and corners cut, and roadblocks thrown in the path of opponents of the project.

You can also detect an odor, and sometimes it is fainter, but it is always there. If you don’t recognize the odor, it is the odor of the pay-to-play culture that permeates the Baltimore County government.

Earlier this month Ann Constantino reported in the Baltimore Post that since 2010 Caves Valley Partners and its affiliates have contributed $61,000 to the campaign fund of County Executive Kevin Kamenetz. They also have contributed a total of $60,350 to the campaign funds of the current members of the County Council. Not included in those figures are contributions that may have come from spouses and other family members.

There’s an old saw used to deflect concerns about the influence wielded by large campaign contributors: They aren’t buying influence, they’re just seeking access to public officials. Read the history and decide if Caves Valley got its money’s worth of “access” to County officials.

By now, almost everyone in Baltimore County has heard about “Treegate,” the name given by community activists to the removal of 30 mature trees on the perimeter of County-owned property at the intersection of York Road and Bosley Avenue in Towson on April 1, 2017. The property was and is under a contract of sale between the County and Caves Valley. At the time of Treegate, Caves Valley planned to develop the property under what is called a “planned unit development,” or PUD.

In 2016, the Baltimore County Council placed a very specific requirement on the Towson Station PUD. The Council exercised its regulatory authority over PUDs under § 32-4-242(d) of the Baltimore County Code to require that the “existing mature trees that surround the site are protected.”

Those trees constituted a partial buffer of the gas station and convenience store that Caves Valley proposed to build on the site. The requirement was imposed by the County Council as a condition of its approval of the PUD by Resolution No. 113-16, passed unanimously by the Council on December 19, 2016.

Caves Valley, however, did not want to retain the trees, and by the evening of Saturday, April 1, 2017 the trees “protected” by the Council resolution were gone. They were cut down by County contractors that day on orders from Baltimore County Administrative Officer Fred Homan without prior notice to either the County Council or the public.

THE HISTORY

The first whiffs of the scandal to come: The secrecy of the selection process.

In 2012, County Executive Kevin Kamenetz decided that he wanted to sell approximately five acres of County-owned land at the corner of York Road and Bosley Avenue in Towson on which a fire station and other County buildings were located. The sale was part of a plan to reshuffle the location of County facilities, and then sell the surplus land. The reason given for the plan was to raise money to install air-conditioners in existing County schools.

Prospective buyers were asked to submit their financial offers as well as their plans for development of the property. The declared intent was that the proposals would be evaluated on factors that considered the amounts offered to purchase the property as well as the quality and compatibility of the development plans with the surrounding neighborhoods.

The five-member panel of County employees put together by Mr. Kamenetz to evaluate the proposals was charged with considering the needs of the surrounding communities; the property is part of Towson’s northern “gateway,” and the project design was of special importance to residents. The panel named by Mr. Kamenetz, however, included no representatives of the surrounding communities. That was the first sign that something was amiss.

The next was when the Baltimore Sun filed a Public Information Act request to see the development proposals submitted to the County Executive’s panel. The request was denied.  Don Mohler, Mr. Kamenetz’s chief of staff, explained that the County wanted to keep the documents secret so that the selection process was “devoid of any kind of external pressure.”

“We’re very protective of the integrity of that process,” Mr. Mohler said.

The outcome of the selection process was as dubious as the process itself. The panel’s initial recommendation in April 2013 was that the County select a $6.2 million proposal submitted by a limited liability company controlled by developer Mark Sapperstein that included a Harris Teeter grocery store.

The County estimated the annual property tax at full build-out of the Sapperstein proposal to be approximately $557,224 and the present value of the sales price plus 20 years of property tax revenue to be approximately $13.7 million. The Sapperstein proposal, however, was soon disqualified by County purchasing officials on questionable grounds.

The notice of award sent to Mr. Sapperstein by the County stated that the award was contingent on Mr. Sapperstein providing the County with “evidence of a firm written commitment to your project by Harris Teeter” within 30 days of the notice. The notice also demanded payment of the full purchase price.

As explained to the Baltimore Post by Brenda Bodian, President of BJB Realty Advisors, Inc., it was not commercially reasonable for the County to demand that Mr. Saperstein produce a firm commitment from Harris Teeter at such an early stage of the process. According to Ms. Bodian:

“It is most common in a bid situation, where the developer does not have control of the property yet, to have a letter of intent, rather than a binding lease on the property. And if a landlord and prospective tenant entered into a lease at that early stage, it would have to have many ways for a tenant to get out of the lease if a lot of factors did not line up that are totally unknown at that early stage.”

The award was withdrawn by County officials when Mr. Saperstein did not produce a “firm written commitment” from Harris Teeter. The County then turned to a proposal submitted by Caves Valley Partners, which included a purchase price of $8.3 million.

The County estimated the annual property tax at full build-out to be approximately $26,125 and the present value of the sales price plus 20 years of property tax revenue to be approximately $8.7 million for the Caves Valley proposal. There was a catch: Under the Caves Valley proposal the County would not get paid for the property unless it first approved a PUD that would allow Caves Valley to build a gas station and a convenience store, uses not permitted under the zoning of the property.

• Why did the County accept a proposal from Caves Valley that was contingent on the approval of a PUD when it demanded that Mr. Sapperstein produce an immediate unconditional commitment from Harris Teeter? Approval of a PUD is an uncertain, lengthy process involving approval by the County Council and an administrative hearing officer. Opponents of a PUD may appeal the approval of the PUD by an administrative hearing to the County Board of Appeals and then seek judicial review of the decision by the Board of Appeals if it is unfavorable to the opponents.

• Why did the County agree to a contract with Caves Valley that gave Caves Valley until December 31, 2018 to pay for the property when it demanded immediate payment of the purchase price from Mr. Saperstein? The contract gave Caves Valley five years to obtain approval of its PUD as the contract purchaser. If the PUD was approved, the County got paid. If the PUD was not approved, the County did not get paid and had to start over to try to sell the property.

The County Council approved the contract of sale for the property to Caves Valley Partners (dba CVP-TF, LLC) at its meeting on December 3, 2013 over the strenuous objections of most of the community organizations in Towson. The objections were directed at Caves Valley’s proposal to build a gas station and convenience store on a site in Towson’s northern “gateway” because neither use was permitted by the zoning of the property.

Residents and nearby business owners alike believed that they had been thrown a curve ball by the County. And they had been, in more ways than one, not the least of which was the structure of the deal struck by the County.

The structure of the contract of sale between the County and Caves Valley for the property: A built-in conflict of interest.

The selection of the Caves Valley proposal created a practical problem. The problem was that the proposal included the construction of a Royal Farms gas station and convenience store on the site, a use of the property not allowed by the existing zoning classification of the property.

The “solution” to the problem was making the sale contingent upon the County approving a planned unit development (PUD) for the site. A PUD may be used to allow uses not permitted under the applicable zoning of the property as a matter of right. In theory, a PUD must offer some special benefit to the community that justifies relaxing rules that otherwise would apply.

Because a PUD allows exceptions to the zoning classification and regulations generally applicable to a site, the process for approving a PUD confers due process rights on other property owners who may be affected by and object to the exceptions. Therein lies the rub.

By structuring the contract of sale in the manner that it did, the County placed its pecuniary interests and regulatory responsibilities in direct conflict. Because the sale is contingent on the County’s approval of a PUD, the County gave itself a financial incentive to approve the PUD; the County wouldn’t realize the $8.3 million from the sale unless it approved the PUD.

The problem with that is that a PUD is supposed to be reviewed and approved in an objective, arm’s length manner that protects the rights of persons opposed to the PUD. The conflict of interest built into the contract was more than a potential one; it was an actual one because of the intense opposition in the community to putting a gas station on the property. Because the County had a direct financial interest in approving the PUD, the opponents of the project already had two strikes against them when they came to the plate during the regulatory process.

The County never should have structured the contract of sale in a manner that fatally compromised the integrity of its regulatory role by placing its regulatory role in conflict with its pecuniary interests. It was a decision that sowed the seeds of the greater scandal that would come later. The County administration should have known better, and probably did.

The structure of the transaction blurred the lines between the County’s interests and the interests of Caves Valley. That didn’t seem to bother the County as much as it should have.

The first major step in the PUD process is approval by the County Council of a resolution that allows the PUD to move forward in the regulatory process and which may be used by the Council to place certain conditions on the PUD. Gaining the Baltimore County Council’s approval of the Towson Station PUD would not be easy. In fact, it was ugly.

The alleged threats against Councilman David Marks: Did County Executive Kevin Kamentz use threats to influence the outcome of the regulatory process?

On or about March 16, 2016, Caves Valley submitted its application for approval of a PUD as a contract purchaser of the property. The PUD is identified by the County as PUD-2016-00002.

Section 32-4-242 of the County Code requires that “an application for approval of a site for a Planned Unit Development shall be submitted to the County Council member in whose district the PUD is proposed to be located.” The Council is required to hold a “post-submission community meeting” to solicit public comment on the proposed PUD, and to submit the application to the Department of Permits, Approvals and Inspections for review by the applicable County agencies. The reviewing County agencies submit a preliminary evaluation of the application to the Council. Both of those steps were accomplished.

Section 32-4-242 of the County Code further provides that, after considering the information from the post-submission community meeting and the preliminary agency review, the County Council “by adoption of a resolution, may approve the continued review of the Planned Unit Development in accordance with the procedures of this title and the requirements of the zoning regulation.” The resolution, however, must be based on a finding by the County Council “that the proposed Planned Unit Development will achieve a development of substantially higher quality than a conventional development would achieve.” [Emphasis added.]

“Conventional development” of the site would not have included a gas station and convenience store, because they are not permitted by the zoning classification of the site. Is there any wonder why the citizens of Towson were outraged by the prospect of the PUD being approved by the Council?

The proposition that a gas station and convenience store could constitute “development of substantially higher quality” than development permitted by the underlying zoning was controversial from the beginning. It would have to be a very special gas station.

Council Resolution No. 113-16 was drafted to approve the continued review of the PUD. By practice, the Council member to whom the application was submitted also is expected to introduce the resolution approving the continued review of the PUD. Councilman David Marks represents the Fifth District, the district in which the proposed site of Towson Station is located.

Mr. Marks initially balked at introducing Resolution No. 113-16 because of the opposition of his constituents. Mr. Marks told the Towson Flyer in September 2016 that he heard from many constituents who do not want the gas station, but he also said that he heard from the Kamenetz administration:

“Senior members of the administration have made it clear that at least $8 million will be cut from the Fifth District [his councilmanic district] if the resolution is not introduced to review the Towson Gateway Planned Unit Development. The $8 million could affect road resurfacing, flood control in east Towson, and school projects miles away from the Towson Gateway site.”

As a reminder, $8 million was the approximate amount of the price to be paid for the property by Caves Valley if the PUD was approved. The Flyer reported the response to the statement by Mr. Marks from Don Mohler, chief of staff for Mr. Kamenetz:

“The allegation of a threat is simply not true. A PUD is totally at the discretion of the council. In terms of the County Executive, he spent 16 years on the council and he does not weigh in or invade their turf.”

Mr. Mohler’s assertion that Mr. Kamenetz “does not weigh in or invade [the Council’s] turf” was called into question by a subsequent story story in the Baltimore Post. Ann Constantino reported an allegation by Mr. Marks that a threat by Mr. Kamenetz to punish his constituents if he failed to introduce the resolution was relayed to Mr. Marks by Steven Sibel on Mr. Sibel’s cell phone. Mr. Sibel is one of the partners of Caves Valley. Mr. Marks told the Post:

“I was at a meeting where Mr. Sibel showed me his cell phone and there was a message from the county executive claiming that $8 million would be cut from my district if the Planned Unit Development resolution did not advance.”

Ms. Constantino reported that a witness confirmed Mr. Marks’ account, stating that Mr. Sibel approached Mr. Marks with the cell phone message from Mr. Kamenetz. According to the witness, the message said, “tell David he just lost $8 million from his district’s budget.” The witness added that when Mr. Marks read the message he “was very, very upset.”

According to Ms. Constantino, neither Mr. Kamenetz nor Mr. Sibel responded to her requests for comments. A grand jury taking testimony under oath should be able to confirm or deny the truth of the allegations.

Let me stop and underscore something: If the allegations of threats of retaliation are true, then Mr. Kamenetz was flirting with the crime of misconduct in office. The County Council performs a key role in the regulatory process for approving an application for a PUD that implicates the due process rights of persons who may oppose the PUD.

The PUD does not go forward unless the Council makes the necessary findings of fact and gives the PUD preliminary approval. The lawful role of the County Executive does not include trying to influence the outcome of a regulatory process by threats against members of the County Council.

If Mr. Kamenetz put his thumb on the scale at the front end of the process by using threats to induce Mr. Marks to introduce a resolution giving the PUD preliminary approval, he compromised the integrity of the process as much as if he tried to pressure the Board of Appeals at the back end of the process. Mr. Marks has made very serious allegations against the County Executive that, standing alone, merit investigation by the State Prosecutor.

Mr. Marks introduced Resolution No. 113-16 on October 3, 2016. It was passed by the County Council on December 19, 2016.

Removal of the trees: A smoking gun.

We now know, thanks to Ms. Constantino, that County Administrative Officer Fred Homan formed his intent to defy Council Resolution No. 113-16 almost immediately after it was passed. In a story published in the Baltimore Post last week she revealed that as early as January 2017 Baltimore County Administration Officer Fred Homan was working with lawyers representing Caves Valley Partners to thwart the condition placed on the Towson Station PUD by the County Council.

The Towson Station PUD, like other developments, is subject to State and County forest conservation laws. In May 2016, a consultant, Eco-Science Professionals, Inc., applied on behalf of Caves Valley for approval of a Forest Conservation Special Variance that would allow removal of six “specimen” trees from the property. Specimen trees generally are larger and more mature trees, and merit special protection under State and local forest conservation laws. The consultant claimed that retention of the six specimen trees was incompatible with the proposed design of the project.

The application for the Special Variance in May 2016 drew immediate flak from community groups, particularly from the Green Towson Alliance, a large and active environmental advocacy group. The six specimen trees were among 30 trees that rimmed the northern part of the property and partially screened the buildings on the site from York Road and Bosley Avenue. The application for the variance to cut down the trees was withdrawn, apparently because of the pressure from the community groups.

The County Council passed Resolution No. 113-16 on December 19, 2016. The Council, responding to the community concerns about the trees, placed a condition on the PUD requiring “that existing mature trees that surround the site are protected.”

Ms. Constantino obtained a copy of an email exchange on January 18, 2017 between Donna Morrison, Mr. Homan’s deputy, and Robert Hoffman. Mr. Hoffman is the partner of Venable LLC in charge of its Towson office. Venable was and is the law firm that represents Caves Valley in the Towson Station project.

“Fred” is Fred Homan, the County Administrative Officer. The “Chris” to whom Mr. Hoffman’s email refers is Christopher Mudd, then an associate and now a partner with Venable.

Ms. Morrison to Mr. Hoffman: “You were going to send Fred the site plan with the trees that needed to be removed.”

Mr. Hoffman to Ms. Morrison: “Hi Donna. Yep and got your phone message. Chris is on it!

This email exchange provides hard evidence that the County Administrative Officer was told by representatives of Caves Valley which trees “needed to be removed.” As explained later, Mr. Homan did for Caves Valley that which Caves Valley could not do for itself – remove the trees.

Removal of the trees: Dubious explanations.

On Saturday, April 1, 2017, a contractor for the County cut down the 30 trees that surrounded the property, including the six specimen trees. All the trees that were subject to the condition placed on the PUD by Resolution No. 113-16 were gone.

County Attorney Michael Field later would tell Ann Constantino that it was County Administrative Officer Fred Homan who ordered the trees removed. Mr. Kamenetz’s chief of staff, Mr. Mohler, confirmed that the purpose was to prepare the site for development.

On April 3, 2017, Mr. Homan was present at a regularly-scheduled meeting of the County Council, and he was asked by Councilman David Marks why the trees were cut down in defiance of the conditions placed on the PUD by the Council resolution. Mr. Homan’s response:

“That [the PUD condition] has nothing directly to do with the fact that the county owns the properties, Sir. That would be at the point that the property would transfer.”

Mr. Homan went on to explain:

“And quite frankly, the County is currently moving to accelerate the settlement on the property, so the County can receive the $ 8 million that it’s currently had to forward finance through the sale of debt. That keeps the revenue as a receivable, which does not help. The County needs the cash from the sale of the property. So, the County is trying to accelerate the close of the property. That’s what going on at this point in time.”

In his statement to the County Council Mr. Homan staked out his position that it was Caves Valley that would be bound by the conditions of the PUD once Caves Valley owned the property, and that conditions placed on the Towson Station PUD by the Council technically were not binding on the County administration while the County still owned the property. He was telling the County Council in so many words that he done for Caves Valley that which Caves Valley could not do for itself – remove the trees.

Why did Mr. Homan order the trees removed? According to his statement on April 3, 2017, the County needed the money from the sale of the property. Mr. Homan saw the retention of trees as an impediment, delaying the closing of the sale.

There are two points that need to be made about Mr. Homan’s explanation:

• Assuming that Mr. Homan was correct that he was not technically bound by the conditions placed on a future PUD, it was not his job as a member of the executive branch of County government to find a way to thwart the will of the County Council as expressed in Resolution No. 113-16. In fact, he had a legal duty to do his best to implement the will of the legislature as expressed in Resolution No. 113-16.

Mr. Homan may have taken himself out of the frying pan and placed himself in the fire with his explanation to the County Council. If the State Prosecutor concludes that Mr. Homan abused his authority by removing the trees with the intent to defeat a condition lawfully imposed on the Towson Station PUD by the Baltimore County Council, Mr. Homan could find himself charged with misconduct in office, especially if the State Prosecutor believes that Mr. Homan acted in concert with the developer who would be bound by that condition. Mr. Homan is supposed to take his lead from the wishes of the County Council, not from a developer’s attorney.

• Mr. Homan’s explanation that he was trying to “accelerate” that closing of the deal so that the County could realize the $8.3 million from the sale of the property does not square with his later actions. On July 26, 2017, Mr. Homan signed an amendment to the contract of sale with Caves Valley that extended the Closing Date for the sale of the property from December 31, 2018 to December 31, 2023.

In April 2017, Mr. Homan states that he is in a hurry to get to settlement on the property, but in July 2017 he agrees to delay settlement by up to five years? Did he order the trees cut down because he was in a hurry to get to settlement, or was he merely doing the bidding of Caves Valley?

Removal of the trees: Other “legal technicalities” disregarded?

• Did Mr. Homan use County funds to cut down the trees that were lawfully appropriated for that purpose? In my opinion, the answer is No.

The trees were cut down by a contractor, Excel Tree Expert Co., Inc., working under a County contract administered by the Property Management Division of the County’s Office of Budget and Finance. The Fiscal Note prepared by the County Auditor on the second amendment to the contract of sale, discussed below, reports that the County spent $29,052 for the tree removal.

As a threshold matter, no expenditure of County funds was justified to remove the trees because the contract of sale called for the property to be transferred from the County to Caves Valley “as is.” There was absolutely no duty imposed by the contract on the County to prepare the site for development by cutting down trees.

Even if the contract called for the removal of the trees, the money used to do so would have to be appropriated for that purpose. It was not.

The funds used to pay Excel Tree Expert Co., were appropriated by the County Council for the use by the Property Management Division in its Grounds Maintenance Program. The purpose of that program is described in the budget is “to provide grounds maintenance for all County facilities to the citizens of Baltimore County so that they can participate in leisure activities in recreation facilities in a safe and clean environment.”

The services provided by Grounds Maintenance Program are listed as “including grass maintenance, ball diamond grooming, turf management, and general landscaping.” Removing 30 trees to prepare a site for development is not “general landscaping” and it is not “maintenance.”

Using County funds for a purpose for which they were not appropriated is a violation of Section 715 of the County Charter for which the offending official may be removed from office. It can also subject a violator to criminal penalties if the misuse is deemed theft or misconduct in office.

There were calls for a formal audit by the County Auditor to determine whether there had been a misappropriation of funds as described in Section 715. No such audit has been done nor is likely to be done under the present composition of the County Council, which has the power to order such an audit under Section 311 of the County Charter.

I don’t know how you describe the failure of the County Council to order an audit as anything other than a cover-up. My hunch: The County Council does not want to risk the possibility of an audit finding of a misappropriation of funds. That would mean that the Council would have to respond with some sort of action. Airing the County’s dirty linen when it comes to development issues is the last thing that current members of the Baltimore County Council want to do.

It is worth noting that the County Auditor also reported in the Fiscal Note for the second amendment to the contract of sale that the County spent $91,881 to demolish buildings on the site to prepare it for development by Caves Valley. As with the removal trees, no duty was imposed on the County under the initial contract of sale to demolish the buildings. The Fiscal Note does not indicate the source of the funds used for the demolition.

• Did Mr. Homan violate State and County forest conservation laws by ordering the removal of the trees, especially the six “specimen” trees? In my opinion, he violated the spirit of the law; a determination of whether he violated the letter of the law is in the hands of the Maryland Department of Natural Resources.

I am not going to include in this article a full analysis of the removal of the trees under State and County forest conservation laws and regulations. I will say that I believe that, for purposes of forest conservation laws, there is overwhelming evidence that the County administration in effect acted as an arm of the prospective developer, Caves Valley, in removing the trees from the development site.

That places the removal in a completely different legal context because Caves Valley would have had to jump through a series of hoops to try to get the trees removed. In my opinion, Caves Valley would have been required to preserve all or most of the six specimen trees even in the absence of Resolution No. 113-16.

Even when the County engages in “tree cutting activity” on its own property for its own purposes, it generally is subject to its own forest conservation regulations if the size of the tract of land is 40,000 square feet or greater. There are limited exceptions, but in my opinion, none of them applied to the removal of six specimen trees to prepare the site for future development by a private developer. There is no indication that the County followed its own process for justifying the removal of the trees.

The secret extension of the closing date under the contract of sale: Why did Mr. Homan agree to it?

There are serious questions raised by the length, terms and conditions, and timing of the extension. Mr. Homan or Mr. Kamenetz need to answer those questions. To date they have not.

On July 26, 2017, Mr. Homan signed an amendment to the contract of sale with Caves Valley that extended the Outside Closing Date for the sale of the property from December 31, 2018 to December 31, 2023. The extension was secreted from the public (and from at least some members of the County Council) and only came to light in November 2017 when it was discovered by by Ms. Constantino in a file produced under a Public Information Act request.

The contract of sale, before the most recent amendment approved by the County Council, provided that the sale could not be closed until the PUD was approved. If the sale was not closed on or before the original Outside Closing Date of December 31, 2018, the contract would expire by its own terms and Caves Valley would lose its right to purchase the property under the contract of sale.

A five-year extension is an extraordinarily long period under the circumstances; a series of shorter extensions, if necessary, would have been customary for the protection of the County. In the context of the terms and conditions of the amended contract the extension is even more troubling.

The amendment extending the closing date contained none of the language protecting the interests of the County that you would expect. Nothing in the amendment provided any compensation to the County for the loss of the use of the revenue from the sale of the property attributable to the delay in settlement. That revenue included not only the sale price but also revenue from the property tax that Caves Valley would have paid from the date of conveyance.

Nor was there any provision for an upward adjustment in the purchase price because of any appreciation in the value of the property. The offer of $8.3 million for the property was made in 2013. Would the value be the same in 2023?

The contract left the County vulnerable to a slow-down by Caves Valley, making the length of the extension even harder to comprehend. There are no intermediate benchmarks that Caves Valley must achieve (“feet to the fire” provisions), such as deadlines for submitting the various documents required during development review, that would allow termination of the contract before the contract expiration date if the deadlines were not met.

Under the contract as amended on July 26, 2017, Caves Valley arguably could have sat on the deal for years, done nothing, and the County would have been powerless to do anything about it. Had that happened, the contract would have expired on December 31, 2023, leaving the County with nothing to show for ten years of efforts trying to sell the property. The County even would have been required by the contract to return to Caves Valley the $83,000 “earnest money” that Caves Valley deposited in 2013.

The extension in effect allowed Caves Valley, if it chose to do so, to hold the property hostage by tying up the property until 2024 without having to improve it or pay taxes on it. In my opinion, the length and terms and conditions of the extension were inexplicable, at least when viewed from the perspective of the County’s best interests.

So, again the question is why did he do what he did? Why did Mr. Homan agree to the extension at all, and why did he agree to it 17 months before the contract was due to expire?

One thing that the amendment did do, of course, was protect the interests of Caves Valley. If the contract of sale had expired on December 31, 2018 without completion of the sale to Caves Valley, it would have been up to the next County Executive and County Council to decide what to do about the sale and development of the property, with no further legal obligation to Caves Valley.

Many opponents of the gas station and convenience store proposed by Caves Valley saw starting over next year with Caves Valley out of the picture as the best option. Caves Valley probably did not.

What about the timing of the extension? Why did Mr. Homan agree to it 17 months before the contract was due to expire?

When the extension was signed on July 26, 2017 things weren’t going well for Caves Valley and the Towson Station PUD. If anything, opposition to the gas station and convenience store had intensified, and members of the County Council as well as the County Executive were beginning to feel the political pressure from that opposition with an election year looming.

On July 3, 2017 Councilman David Marks had introduced Resolution No. 68-17 which, if approved, would have withdrawn the Council’s preliminary approval of the PUD. It was the doomsday scenario for Caves Valley; approval of the resolution likely meant that Caves Valley would lose its right to purchase and develop the property under the contract of sale.

Was the timing of the extension in relationship to the introduction of Resolution No. 68-17 a coincidence? I don’t think so.

The timing of the extension operated as a poison pill, restricting the County’s options. It also shifted the advantage to Caves Valley for purposes of negotiating any changes to its development plan or any further changes to the contract of sale.

Because of the extension it no longer was practical for the County Council to withdraw preliminary approval of the PUD and let the clock run out on Caves Valley: The property was now under contract to Caves Valley until December 31, 2023. Stalled development plans could result in an eyesore parcel of County-owned land in the heart of Towson sitting idle and producing no income for over six more years.

Resolution No. 68-17 was tabled on a 4-3 vote by the County Council on August 3, 2017. On August 11, 2017 Mr. Kamenetz announced that he wanted Caves Valley and the Greater Towson Council of Community Associations (GTCCA) to mediate their differences over the proposed development and try to come to a compromise proposal.

With the five-year extension in its back pocket, Caves Valley was freed from pressure to make a lot of concessions. And it didn’t.

On January 12, 2018, Caves Valley and the GTCCA reached agreement on a revised development plan that does not include a gas station and convenience store. Last week the County Council approved a second amendment to the contract of sale lowering the sale price because the revised development plan eliminates the the gas station and convenience store.

Are the new deals good deals or raw deals?

Under the compromise reached between Caves Valley and the GTCCA, Caves Valley will place a covenant on the land prohibiting it from placing a gas station or convenience store on the property for 25 years. Caves Valley also agreed not to use the site for a fast food restaurant other than a Chick-fil-A. (Your guess as to the reason for exempting Chick-fil-A from the exclusion is probably the same as mine.)

Although Caves Valley will not pursue its current application for approval of a PUD, it does have the right to reapply for approval of a PUD if its revised development plan is not approved or is approved with material changes. Finally, the agreement between Caves Valley and GTCCA was contingent on the approval by the County Council of a reduced sale price for the property negotiated by Caves Valley and the County administration.

The agreement does not achieve the original vision of the community or County planners for the “gateway” project by adhering to the Towson Overlay District guidelines that provide for, among other things, a more pedestrian-friendly design than the layout proposed by Caves Valley. It is, however, a proposal more compatible with the neighborhood than a Royal Farms gas station and convenience store.

The fact that residents of Towson were able to achieve anything with the deck so heavily stacked against them is a testament to their dedication and perseverance. Ron Council, a resident of West Towson who participated in the negotiations, put the matter in perspective for the Towson Flyer:

“I think where we are today is where we could have been four years ago if Baltimore County’s government hadn’t acted irresponsibly in allowing the [gas station project] to be weaponized against the community as it has been for the last four years. It would have saved volunteers thousands of hours of time that they could have spent on something else, and we wouldn’t have had an undeveloped piece of land sitting on the corner of York and Bosley.”

There is less reason to be sanguine about the revised sale price negotiated by the Kamenetz administration and approved last week by the County Council. The deal as advertised by the County lowered the sale price from $8.3 million to about $6.9 million although, as it turned out, the $6.9 million number is more than a little suspect.

Caves Valley insisted that its agreement with GTCCA be contingent on final approval by the County of a reduced sale price within 90 days. The Kamenetz administration and Caves Valley reached agreement on the $6.9 million figure in early March, leaving the County Council and the public precious little time to review the proposal.

Was limiting the time to scrutinize the deal done by design? Why the big hurry now, when Caves Valley agreed in the middle of last year to a five-year contract extension?

The reduced sale price was based in part of two appraisals done at the request of the Kamenetz administration. There is little doubt that those appraisals would not have been made public in time for the Council hearing on the revised contract except for a Public Information Act request made by a Towson resident. Even then, shaking the appraisals loose required the intervention of the lawyer who also is the author of this article.

The advertised sale price of $6.9 million included the present value of an agreement by Caves Valley to waive its entitlement to revitalization property tax credits for 10 years. The waiver was assigned a present value of about $1.9 million. What you don’t know until you read the appraisals is that the appraisers, at the instruction of an unnamed County official, used $0 as the “base value” for calculation of the projected tax credits.

If you interested in the detailed reasons why that was wrong, read my letter to the Council dated April 12, 2018. The executive summary: The purpose of a revitalization tax credit under State and County law is to give the owner a tax credit based on the extent to which the improvements that the owner has made to a piece of property increased the assessed value of the property.

All property in the State, improved or unimproved, has an assessed value. No property has an assessed value of $0. It defies logic as well as the purpose of the revitalization tax credit to calculate the credit using $0 as the starting, or “base,” value of the property. A proper calculation of the projected tax credits places the present value of those credit at around $1 million, reducing the sale price to about $6 million.

A group called Save Towson’s Gateway prepared a detailed statement for the County Council that shredded assumptions and calculations upon which the reduction in sale price was based. Not surprisingly, the purported “analysis” contained in the Fiscal Note prepared by the County Auditor for the County Council on the proposed contract revision included no comment on the manner of calculating the revitalization property tax credits or the other issues bearing on the sale price identified by Save Towson’s Gateway.

The revised contract of sale was approved by the County Council on April 16, 2018. The vote was 4-3, and there was no discussion by Council members of how Caves Valley and the Kamenetz administration arrived at the reduction in the sale price and whether it reflected a fair price for the property.

CONCLUSION

The history of the Towson Station project is an illustration of what corruption looks like in the pay-to-play culture of Baltimore County. It may not involve the type of “hard” or criminal corruption that has occurred in the past in Baltimore County, with bribes and kickbacks ending up in the pockets of politicians. But, in my opinion, it does involve so-called soft corruption, in which considerations other than the best interests of their constituents shape the actions of public officials and influence the outcomes of processes that are supposed to fair and even-handed.

Soft corruption does not involve criminal wrongdoing, but that does not mean that it is any less corrosive to the public’s trust in elected officials. And it is difficult to prove. To paraphrase the statement regarding obscenity by former Supreme Court Justice Potter Stewart, however, you know it when you see it. You discern it in the pattern of questionable decisions and actions by County officials over time that appear to favor one developer’s interests over another’s and over the interests of the citizens most directly affected by the development.

Although I accuse no one of criminal wrongdoing, I believe that there were actions taken during the history of Towson Station that demand investigations to determine if crimes or other wrongs were committed:

• The alleged threats by County Executive Kevin Kamenetz against Councilman David Marks (allegedly relayed through Steven Sibel of Caves Valley) to induce Mr. Marks to introduce the resolution giving preliminary approval to the Towson Station PUD should be investigated to determine if Mr. Kamenetz improperly tried to influence a regulatory process implicating the due process rights of third parties.

• The action taken by County Administrative Officer Fred Homan to remove the trees protected by County Council Resolution No. 113-16 should be investigated to determine if Mr. Homan abused his authority in violation of the prohibition against engaging in “misconduct in office.”

• The authorization by one or more County officials of spending $29,052 in County funds appropriated for general maintenance and landscaping to remove the trees from County property in order to prepare the property for development by a private developer should be investigated to determine if there was a misappropriation of County funds in violation of Section 715 of the County Charter, a provision that subjects offending County officials to removal from office.

Do I believe that campaign contributions from builders and developers influence land use and other decisions by local government officials? Yes, based on decades of experience in county government, I certainly do. And the larger the contribution, the greater the influence. In fact, I will say this: Anyone with similar experience who tells you otherwise is lying to you.

It certainly is true that some local government officials are more easily influenced than others. And right now, resistance to influence appears to be at a low ebb among Baltimore County officials. Consequently, the Towson Station saga was not an isolated occurrence in Baltimore County.

The good news, however, is that there are bright and dedicated people in the County in groups such as Save Baltimore County who are trying desperately to take back control of the County from developers and other special interests. The number started small, but it is growing rapidly. I wish them well.

Additionally, the efforts of these citizens are being helped by journalists like Ann Constantino and Kris Henry. The citizens of Baltimore County, including me, owe them a debt of gratitude for what they do.

Ms. Constantino is a freelance investigative reporter, whose stories often appear in the Baltimore Post, a local news site. As indicated by the multiple references to it throughout this article, her work is invaluable. Ms. Henry is the Towson Flyer, and she reports on County government in depth, going behind the press releases and other self-serving pronouncements by County officials to get the full stories on events.

David A. Plymyer
April 21, 2018

The sale price for the “Treegate” property in Towson is $916,085 less than the Kamenetz administration says it is.

I recently wrote a guest commentary for the Towson Flyer in which I suggested that there was an allergy to audits among Baltimore County elected officials when it comes to the operations of County government. [“Kach should demand audit of Treegate and put fellow council members on record,” The Towson Flyer, April 4, 2018.] I want to revise my diagnosis.

I now believe that there is an allergy to truth-telling in general. It is the most recent example of perfidy in Towson that changed my mind:

The consideration for the sale of the property as represented to the Baltimore County Council and the public by the administration of County Executive Kevin Kamenetz under the revised contract of sale between the County and Caves Valley for the “Treegate” property owned by the County is not $6,912,685. It is $5,996,600.

How could that be? The answer is that the County played games with the calculation of the revitalization tax credits to which Caves Valley would be entitled if it buys and improves the property, and that Caves Valley has agreed to “waive” as part of the contract of sale. Those credits are closer to $1,012,532 than the $1,928,617 calculated by the County because the County improperly assigned a base value of $0 to the property for purposes of its calculation.

If you are interested in the details, there is a link below to my letter to the County Council explaining in detail what I will politely refer to as a “discrepancy.” The following is an executive summary of that explanation:

The purpose of a revitalization tax credit under State and County law is to give the owner of a piece of property a tax credit based on the extent to which improvements made by the owner to the property increased the assessed value of the property.  (The assessed value of the property includes the value of both the land and any improvements.)  You don’t have to be a [adjective bleeped out] Nobel Prize-winning economist to recognize that using $0 for the starting value (“base value”) of property in calculating an entitlement to a revitalization property tax credit is wrong – and very, very obviously wrong.

So, the Kamenetz administration believes that you can take a piece of County property currently assessed without the improvements at $17,810,000 and calculate the projected entitlement of Caves Valley to revitalization tax credits by using $0 as the base value for the property? That’s bullshit [noun not bleeped out], and the Kamenetz administration knows it.

The revised contract of sale negotiated by the Kamenetz administration is on the agenda of the Baltimore County Council for approval on Monday. The manipulation of the revitalization tax credit numbers made it past the County Auditor’s “Fiscal Note” on the transaction and a Council work session this past Tuesday without a single question raised. The farce never would have been discovered before Monday (or maybe ever) but for the diligence of a handful of responsible citizens who have taken on lonely roles as County government watchdogs.

The modus operandi of the Kamenetz administration on matters such as this is predictable. It presents the County Council with a hurried, artificial deadline by which the Council “must” act to preserve some deal, and then gives the Council (and the public) the information relevant to the deal at the last minute. The Council apparently doesn’t mind the arrangement, because it seldom rebels at being backed into a corner.

In this case, a citizen obtained the appraisals that the County used to justify its calculation of the value of the waiver of the revitalization tax credits. As usual, getting information from the County wasn’t easy. Below is a link to a redacted copy of the letter that I sent to shake loose the appraisals. I am afraid that the letter reflects my experience and frustration with the County; the good news is that the County knows from its experience with me that I will go to court to enforce the law, and the appraisals were produced.

The report of the appraisal done by Collier International sent up a red flare: On page 20 of the report, Collier notes that, for purposes of the calculation of the revitalization property tax credit, “it is our understanding that the base value for the credit would be based on the taxable assessment of $0, and not the full assessed value of $17,810,000.” [Emphasis added.] That language indicates that the instruction to use $0 as the base value came from Collier’s client, Baltimore County. And even I couldn’t miss the signal sent by Collier. There is a link to the Collier report below.

I have no opinion on whether the discrepancy in the sale price should affect the Council’s decision whether to approve the revised contract of sale. After all, it is “only” a difference of $916,085, or 15% of the sale price. It would be nice, however, if just once the County would play it straight with the facts, and with its citizens. It is almost as if County officials simply can’t help themselves – as if hiding and distorting the truth has become habitual.

I do not believe that this type of deception would have been attempted in any other county or in the City of Baltimore. It is too brazen, and too easily debunked. The problem in Baltimore County is that the checks and balances internal to County government are not functioning, and there is insufficient scrutiny from the media. The County government has gotten away with similar behavior so often that it no longer thinks twice about pulling the wool over the public’s eyes.

The Baltimore Sun’s coverage of Baltimore County government is too superficial to be of much use. Kris Henry of the Towson Flyer and Ann Constantino of the Baltimore Post do yeoman’s work, but there is more going on than they can get to. So, as an aside, I have a plea to the editors of the Sun who decide where reporters get assigned, and maybe even to the Maryland State Prosecutor: Send some help to the citizens of Baltimore County who are desperately trying to keep track of the shenanigans that go on in the Old Courthouse in Towson.

April 14, 2018

Letter to County Council:              Ltr to County Council 4 12 18_0001

Collier appraisal:                            Towon Gateway Appraisal report 2 16 18

Letter to Asst County Atty:           Ltr to ACA Losher 3 20 18 redacted

Baltimore County: Under-told stories.

Let’s just say that if my pet peeves were pet dogs I’d have to buy a kennel. One of them is what I consider to be the inadequate news coverage of Baltimore County by the mainstream media. In the case of the Baltimore Sun, my criticism has nothing to do with the quality of the Sun reporters covering the county; it has to do with the quantity. There are just too few reporters assigned to cover the county, especially the county government.

People like Ann Constantino of the Baltimore Post and Kris Henry of the Towson Flyer (and Pam Wood of the Sun) do yeoman work, but they could use some help. The following are examples of relatively recent stories that I believe would have benefited from more in-depth coverage.                ____________________________________________________________________________________________

The Chabad-Lubavitch House: How Baltimore County, paraphrasing its own Board of Appeals, “left the neighbors stranded” by failing to protect the residents of Aigburth Manor in Towson from the consequences of an unlawfully-obtained building permit issued by the county.

The saga of the structure built on property owned by Friends of Lubavitch, Inc. to house what is now known as Chabad of Towson and Goucher, a facility serving the Jewish communities at Towson University and Goucher College, is a contentious one. In pertinent part, that history began on 2016 with the application for a building permit by Friends of Lubavitch to construct what was described as a residential addition to an existing single-family home in the residentially-zoned community of Aigburth Manor. The Baltimore County Department of Permits, Approvals and Inspections issued the permit, and the addition was built.

Long story short, the Baltimore County Board of Appeals, in a decision issued on September 5, 2017, held that the structure represented to the county as a proposed addition to the house intended to accommodate the expanding family of Rabbi Menachem Rivkin, who is associated with the Friends of Lubavitch, was from its inception intended to be a “community center” serving the mission of the Friends of Lubavitch, a use not permitted in the neighborhood. The Board of Appeals noted that the residential addition ended up being “a 9,000 square foot institutional-looking structure in a residential neighborhood of 3,000 square foot homes,” and the Board described in exquisite detail how the building is designed and outfitted to serve as a community center, not a residence.

The Board of Appeals found that Friends of Lubavitch “acted in bad faith in obtaining the building permit and constructing the addition,” referring to the permit as a “dishonestly procured permit.”  The Board concluded that “Friends of Lubavitch is and has been using the property at 14 Aigburth Road as a community center without having obtained the necessary approvals or complying with the necessary regulations.”

It is worth reading the decision by the Board of Appeals to gain a full appreciation of the fact that the conclusion by the Board of Appeals that the issuance of the building permit had been based on the misrepresentation of facts by Friends of Lubavitch was based on an overwhelming amount of carefully-considered evidence. A link to the decision appears below. In its analysis, the Board commented:

“Sadly, Lubavitch has achieved its goals by manipulating both the administrative system as well as everyone’s natural inclination to defer to religious organizations. In the end, Lubavitch has left [the Board of Appeals] with very few options, but leaving the neighbors stranded cannot be one of them.” [Emphasis added.]

But after the Board of Appeals issued its decision, “leaving the neighbors stranded” is exactly what the Kamenetz administration decided to do. The neighbor who has been leading the fight against the community center recently told a reporter for the Sun that, after the ruling by the Board of Appeals, it was the county’s responsibility to tear down the building. The county did not concur:

“We disagree with [the neighbor’s] interpretation that the County must require the addition to be removed,” county spokeswoman Ellen Kobler wrote in an email, according to the Sun. “The Board’s issue was the use, not the size of the building.”

Ms. Kobler’s explanation ignored the finding by the Board that the building permit was obtained by a bad faith misrepresentation of the purpose of the structure. As described in detail by the Board, the permit never would have been issued if the true purpose of the “addition” had been disclosed to the Department of Permits, Approvals and Inspections. And Ms. Kobler’s interpretation of the county’s responsibility under the law for removal of the building was wrong.  The following is from the Baltimore County Building Code:

PART 112.6 REVOCATION OF PERMITS. THE BUILDING OFFICIAL MAY REVOKE A PERMIT OR APPROVAL ISSUED UNDER THE PROVISIONS OF THIS CODE IN THE CASE OF ANY FALSE STATEMENT OR MISREPRESENTATION OF FACT IN THE APPLICATION OR ON THE PLANS ON WHICH THE PERMIT OR APPROVAL WAS BASED. IF ANY PERMIT IS ISSUED IN VIOLATION OF THE PROVISIONS OF THIS CODE OR OTHER LAWS, RESOLUTIONS AND REGULATIONS OF BALTIMORE COUNTY, OR LAWS OF THE STATE OF MARYLAND, OR WITHOUT PROPER AUTHORITY, IT MAY BE VOIDED AS IF IT HAD NEVER BEEN ISSUED.

The provision applies whether there has been construction done under the permit or not. Revocation of a permit obtained by a bad faith misrepresentation of fact is the first step in the legal process for having construction done under the permit demolished.

Once a year for ten years I went to Madison, Wisconsin to help teach a week-long course put on by the University of Wisconsin College of Engineering for building code officials. As a lawyer, my focus was on enforcement of building codes. A virtually immutable principle in building code enforcement is that a jurisdiction must seek the removal of construction done under a permit obtained by fraud if only because failure to do so is an invitation to people to lie on applications.

In its decision, the Board suggested that the Department of Permits, Approvals and Inspections suspected that it had been misled when it approved the building permit but believed itself “powerless” to do anything other than issue the permit. Assuming that excuse is correct, the Department of Permits, Approvals and Inspections was no longer powerless after the Board issued its decision finding that the permit had been obtained by a bad faith misrepresentation of the purpose of the structure.

Why hasn’t Arnold Jablon, the Director of the Department of Permits, Approvals and Inspections, revoked the building permit and initiated legal action to have the structure removed? Why hasn’t County Executive Kevin Kamenetz said anything at all about the situation?

In Baltimore County, the answer to such questions typically has to do with the political connections of the principals. There is an important story to be told about why Baltimore County is trying to weasel out of enforcing its own building code in the case of the Chabad-Lubavitch House, but to date no one is telling it.

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The contract of sale for the Towson Station site: How Baltimore County whipsawed its own citizens.

Back in the summer of last year, the deal between Baltimore County and Caves Valley Partners for the sale of county land in Towson to Caves Valley Partners was in trouble. The development proposed by Caves Valley, initially known as Towson Gateway and later as Towson Station, was under fire, primarily because it called for the construction of a gas station and a convenience store (not permitted by the underlying zoning) on this northern “gateway” to downtown Towson. The removal of a treed buffer on the property by the county administration, in defiance of a resolution by the county council, further intensified community anger.

By July, there was a problem for Caves Valley: The contract of sale was expiring on December 31, 2018. Because of the opposition to the proposed development, approval of the Planned Unit Development (PUD), upon which the sale was contingent, had dragged on so long that Caves Valley was at risk of losing the property because the approval process could not be completed by the deadline. Once the contract of sale expired, the county was free to start over and seek a more acceptable proposal from another developer – something many in the community would have viewed favorably. What the public did not know was that the Kamenetz administration had a plan to solve Caves Valley’s problem.

On July 26, 2017, without prior notice or explanation to the public, County Administrative Officer Fred Homan signed an amendment to the contract of sale with Caves Valley that extended the closing date for the sale of the property from December 31, 2018 to December 31, 2023. The gratuitous, lengthy extension took all the pressure off Caves Valley to reach a compromise on its proposed development and transferred that pressure to the community groups negotiating with Caves Valley.

Not only were the community groups facing five more years of battling over the PUD, they now had to contend with the possibility that the developer could just sit on the vacant property and seek an up-zoning of the property during the quadrennial review of the county’s zoning maps in 2020. Two weeks after the extension was signed, County Executive Kevin Kamenetz told the developer and groups opposing the developer to work out their differences.

In summary, the extension of the contract of sale protected the interests of Caves Valley not only by avoiding the expiration of its contractual rights to buy the property, but also by putting all the pressure to compromise on the community groups. Two things stand out about the amendment extending the expiration date. First, the extension was a very long one. Second, there was no consideration to the county for the loss of use of the money from the sale, let alone for any increase in property value.

Both things make sense once you realize that the reason for the extension was to apply pressure to the community groups trying to negotiate with Caves Valley. A shorter, more reasonable extension would not have been as effective in placing the pressure on the community groups. As to the absence of consideration to the county for the extension, it is my opinion that there was no concern about protecting the county against financial harm because neither the county nor Caves Valley thought that the extension to 2023 would be necessary.

Sure enough, Caves Valley and the community groups reached a “compromise” last week. And, it included a provision requiring the closing to take place on or before June 30, 2018, over five years before the extended deadline. After closing Caves Valley will seek formal approval of the revised development plan; if the revised plan is not approved, Caves Valley could revive its PUD and seek approval of the gas station and convenience store.

The new proposal, which includes a reduced purchase price, is a very good deal for Caves Valley. I believe that it is fair to say that the county’s whipsaw of the community groups had the desired effect.

As I’ve said before, I don’t blame Caves Valley for negotiating the best possible deal for itself. It is up to the county to protect the interests of citizens, rather than to try to maneuver them into the toughest position possible.

It was Ann Constantino writing for the Baltimore Post who broke the story about the extension of the contract of sale, and it was reported by the Sun. There has been no attempt, however, to dig a little deeper into the story told above about how Baltimore County agreed to a contract extension with Caves Valley that, in my opinion, accomplished nothing more than put the county’s own citizens behind the negotiating eight ball with a private developer. Why would the county do such a thing?

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The proposal to expand the duties of the Baltimore County Auditor: A smokescreen with absolutely no substantive value.

The next two stories are not earth-shattering ones, I admit.  But it bugs me when things that come out of politician’s mouths are taken at face value, and shouldn’t be.

Baltimore County Executive Kevin Kamenetz has found himself under fire for not supporting an independent audit of the purchasing and contracting practices of Baltimore County Public Schools (BCPS) in the awake of the convictions of former school superintendent Dallas Dance and another former BCBS official, Robert Barrett.

Mr. Kamenetz has supported the resistance of the Baltimore County Board of Education (BOE) to demands for an independent audit not controlled by the Board. Mr. Kamenetz did not support HB 428, the purpose of which was described by the General Assembly’s Department of Legislative Services as follows:

“Requiring the Office of Legislative Audits to conduct a special comprehensive audit of the procurement practices and contracts of the Baltimore County public school system to determine whether certain acts occurred during the time period from January 1, 2012, to June 30, 2018, both inclusive; and requiring the audit to focus on certain procurement practices, certain contracts, interactions between certain persons and vendors, and compliance with certain ethics standards and requirements.”

In other words, just what the doctor ordered to put the Dance/Barrett/White controversy behind the BCPS. Unfortunately, the bill died in committee, with a vote generally along party lines.  The Democrats on the House Appropriations Committee apparently agreed with Mr. Kamenetz that no independent audit was needed.

To try to regain some credibility on the issue, Mr. Kamenetz floated a proposal to expand the duties of the county auditor to give the auditor that authority to “review school board contracts,” whatever that means. There is of course considerable irony in his proposal, given the county’s reluctance to have the county auditor perform her primary duty: Auditing the county government. See “No County Circles the Wagons Like Baltimore County,” The Baltimore Sun, March 5, 2018.

In addition to the irony of Mr. Kamenetz’s proposal, there is also this: It lacks substance and is no more than political grandstanding. The county auditor already has the power under state law to perform a financial audit of BCPS and, with the concurrence of the BOE, to perform a performance audit of BCPS functions such as contracting and procurement. If you are looking for a discussion of the relevant provisions of state law, I refer you to 92 Op. Att’y Gen. 137, 141-143 (2007) and 91 Op. Att’y Gen. 145, 146 (2006).

So, it is not clear what Mr. Kamenetz believes the county auditor should be able to do in the future that she doesn’t already have the power to do now. It is worth noting that the county could not compel the BCPS to allow the county auditor to audit or review its contracts for compliance with procurement law without a change to state law, if that is what Mr. Kamenetz intends.

And, if the county auditor, Lauren Smelkinson, is looking for work reviewing contracts, I’d suggest she start by reviewing the county’s questionable agreement with the developers of Towson Row. See “Will Towson Row Funding Come Back to Haunt Baltimore County,” The Daily Record, January 18, 2018. Maybe Ms. Smelkinson should get some practice on the county’s own contracts before she takes on review of BCPS contracts.

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The College Promise scholarship program: A case of getting the cart before the horse.

On the same day (March 19th) that he floated the idea of expanding the duties of the county auditor, Mr. Kamenetz announced his plan to establish Baltimore County’s version of a “College Promise” program. According to Forbes, there are about 200 existing programs in 40 states providing for some form of tuition and fee waiver for community college students.

Under the proposal by Mr. Kamenetz, the county would make up the difference between the tuition bill and what a student gets from grants and financial aid – a so-called “last dollar” scholarship program. To be eligible, students must have graduated from high school within the previous two years with a grade point average of 2.5 or better and have a household income of no more than $69,000.

The students must also be “college ready” and maintain a full-time enrollment of at least twelve credits. It appears that this will exclude students who need remedial coursework before they can begin taking college courses for credit. According to the Community College of Baltimore County (CCBC) statistics, 59% of its students needed to take remedial math classes in 2017.

The proposal requires budgetary approval by the county council. First of all, however, it  requires a separate ordinance establishing the scholarship program and setting forth the eligibility requirements for participation. Those are policy matters for the county council to decide, and they must be set forth in a separate ordinance because of the prohibition against “legislating in the budget.”

It is of course decisions on the various eligibility requirements that will dictate how much funding must be included in the budget; first things first, as it were. The Kamenetz administration frequently treats the county council as an afterthought (and the council frequently acts like a useless appendage), but the important policy decisions about the scholarship program are for the county council, not the county executive, to make.

I am not saying that the College Promise is a bad idea. In fact, I think it is a good idea. But work remains to be done. No draft ordinance has yet been circulated for comments, and there will be comments.

As College Promise programs go, this is one is somewhat limited, and the restrictions on eligibility raise questions about who will benefit from this program, and who will not. Why exclude part-time students who need to work to support themselves, or students who graduated from high school more than two years ago? Questions like that merit public discussion.

The College Promise program appeared on the CCBC website the day Mr. Kamenetz made his announcement and described the program as if it was already up and running. Although the website was corrected within a day after I pointed out to the Director of Media Relations for CCBC that the program had yet to receive council approval, it made me wonder if things were being done a bit hastily – or if the county council was, as usual, being ignored or its approval being taken for granted.

To get the scholarship program up and running for the fall semester of 2018, the ordinance establishing the program should have been presented to the council for their consideration well before the end of last year. A last-minute scramble to pass a bill of this importance is a poor way to proceed.

For one thing, Mr. Kamenetz must submit the proposed county budget for FY 2019 to the county council no later than April 18th.  There is no way to have the ordinance establishing Baltimore County’s College Promise program enacted by that date.  I suppose that getting the cart before the horse is not the worst thing that has happened in Baltimore County recently.

March 29, 2018

14 Aigburth Rd BOA decision

 

The Treegate Anniversary Rally: A turning point for Baltimore County?

There is an event scheduled for Monday, April 2nd at 5:00 p.m. at the intersection of York Road and Bosley Avenue in Towson that deserves more attention than it is getting. The event is the Treegate Anniversary Rally organized to remember what, at least in my memory, is the single greatest affront by a county executive in Maryland to a county council and the citizens that the county council represents.

I had nothing to do with organizing the rally but, in my opinion, as many citizens of Baltimore County as possible should try to attend. To paraphrase the infamous admonition by Baltimore County Executive Kevin Kamenetz at an event in Timonium in 2013, this is the citizens’ turn to talk, and his – and members of the Baltimore County Council – turn to listen.

“Treegate” is a symbol of just how bad the pro-developer, “pay to play” culture of Baltimore County government has become. The goal of the rally, however, is not to look backward. Hopefully, the rally on April 2nd will mark the beginning of a concerted effort by citizens to regain control of their county.

A bit of history: The property at the location of the rally is owned by the county and is under a contract of sale to Caves Valley Partners, which intends to develop the property as a project now known as “Towson Station.” On December 19, 2016, the county council passed Resolution No. 113-16, conditioning future development of the property by Caves Valley on the retention of thirty mature trees that ringed the property.

On Saturday, April 1, 2017, a county contractor, without prior notice to either the Baltimore County Council or the public, showed up at the property and cut down the trees. On April 3, 2017, County Administrative Officer Fred Homan, the second-in-command to County Executive Kevin Kamenetz, appeared before the county council and told the council that he ordered the trees cut down over the previous weekend without regard to the council’s resolution.

Mr. Homan explained to the council that Resolution No. 133-16 was legally binding only on a future private developer of the property – not on the county administration. If you are thinking that the Kamenetz administration should have been more concerned with the intent of the county council that the trees be preserved than with a legal technicality, then you know nothing about Baltimore County.

Caves Valley was not happy with the requirement that the treed buffer be retained. Mr. Homan gave the following reason for cutting down the trees, which effectively removed the condition placed by the council on the development of the site:

“And quite frankly, the county is currently moving to accelerate the settlement on the property [with Caves Valley] so the county can receive the $8 million that it’s currently had to forward finance through the sale of debt. That keeps the revenue as a receivable, which does not help. The county needs the cash from the sale of the property. So, the county is trying to accelerate the close of the property. That’s what going on at this point in time.” [Emphasis added.]

Was Mr. Homan telling the truth about the reason the Kamenetz administration defied the intent of the county council? On July 26, 2017, again without notice to the county council or the public, Mr. Homan approved a five-year extension of the closing date for the sale of the property to Caves Valley from December 31, 2018 to December 31, 2023. So, in April he was accelerating the sale, but in July he was decelerating it? To my knowledge, the Kamenetz administration never explained why it changed its mind about the immediate need for the money from the sale of the property.

You might think that the county council would have been outraged by the removal of the trees by the Kamenetz administration. If you think that, I will remind you again that this is Baltimore County we are talking about.

At the council meeting on April 3, 2017 at which Mr. Homan told the council that he had ordered the trees removed, the best that the council could muster came from David Marks, the councilman who represents the Towson area. Mr. Marks admonished Mr. Homan for not giving him a “heads up” about the removal of the trees. A heads up?

Nor was the county council upset enough to do anything about it when the council later found out that the Kamenetz administration paid the contractor to cut down the trees with funds appropriated for the general landscaping of county parks and other property. Not that the council inquired about the source of the funds; it was Ann Constantino working for a news site known as The Baltimore Post who obtained the documents relevant to the funding that I then reviewed.

The funds used to pay the tree-cutting contractor were appropriated by the county council for use by the Property Management Division of the Baltimore County Office of Budget and Finance in its Grounds Maintenance Program. The program is described in the budget as having the purpose “to provide grounds maintenance for all County facilities to the citizens of Baltimore County so that they can participate in leisure activities in recreation facilities in a safe and clean environment.”

The services provided by the program are listed as “including grass maintenance, ball diamond grooming, turf management, and general landscaping.” Removing thirty trees to prepare a site for private development is not “general landscaping,” and it is not “maintenance.”

Councilman Wade Kach appeared genuinely upset when he learned about the source of the funds, describing county government as “out of control.” “As a former auditor, I can tell you, this ill-advised action cries out for a full audit to get to the bottom of this deplorable behavior by county government,” Mr. Kach said.

No audit, “full” or otherwise, has taken place since Mr. Kach made those remarks last November. This is Baltimore County, remember, where there seems to be a peculiar allergy to audits.

Ordinary citizens in Baltimore County have little chance when their interests collide with those of the developers who contribute to the campaigns of County elected officials. Ms. Constantino has done tremendous work in documenting the flow of money going to the campaigns of those officials, and the following are links to stories that I consider must-reading for citizens of the county:

http://thebaltimorepost.com/county-council-consider-43-million-grants-large-campaign-donors                                                                                              http://thebaltimorepost.com/developers-trail-campaign-donations-lead-towson-gateway

http://thebaltimorepost.com/caves-valleys-campaign-contributions-pave-way-towson-gateway-project

What distinguishes Baltimore County from other jurisdictions is not only the large amount of the campaign contributions, it is also the fact that the contributions are spread around to all the members of the county council. When a well-connected developer contacts Mr. Kamenetz about a project and asks the county to jump, it seems that all that remains to be done is for Mr. Kamenetz to call the members of the county council and tell them how high.

Mr. Kamenetz tried to sell the narrative that major financial and other concessions to developers were necessary to help the county grow. Nothing could have been further from the truth. Baltimore County enjoys the advantages enjoyed by the other counties in the Baltimore metropolitan area: A strategic location in a very affluent state with a skilled and highly-educated workforce; access to major sea, land and air transportation facilities; large federal employment centers; and proximity to a major city with educational, cultural, entertainment and medical amenities – but without all the problems of the city.

Growth was going to come to Baltimore County. It was never a question of if; it was always a question of the quality of the development and how well the county planned for it. Howard and Anne Arundel Counties grew without mortgaging their futures to subsidize a favored group of developers, as I described in a previous post. Baltimore County could have done so as well, but it did not.

The good news is that there appears to be an awakening among the citizens of Baltimore County as they realize that they are going to have to pay more attention, and work harder, to make sure that their government keeps their best interests at heart. It is a recognition that applies to the Baltimore County Public Schools, and it certainly applies to the Baltimore County government. Let’s hope that the Treegate Anniversary Rally builds on the momentum that already has begun.

David A. Plymyer
March 24, 2018

 

Be part of the solution, Mr. Gilliss, not part of the problem.

If it is to have any usefulness or credibility, the much-debated audit of the contracting and procurement practices of Baltimore County Public Schools (BCPS) must be done by the Office of Legislative Audits of the Maryland General Assembly or under the supervision of the Maryland State Board of Education, and its scope must be broad enough to include an investigation into the reasons behind any breakdowns or deficiencies in those practices. The auditors must have free rein to follow the facts wherever they lead.

The first thing that I would like to see happen is for Ed Gilliss, Chairman of the Baltimore County Board of Education, to recognize that someone other than himself should take the lead on the audit. He has been the public advocate for the position taken by the board that the audit should be done by an accounting firm selected by the board, and he and that position have become lightnings rod for controversy.

Mr. Gilliss has a solid reputation as a lawyer and has given generously of his time to public service, but he is much too closely identified with former superintendent of schools Dallas Dance to have any role in selecting the auditing firm or shaping the scope of the audit. I believe that, once he acknowledges that fact, the other members of the board who wish to retain control over the audit will also change their minds. Changing their minds would not be an admission that they or their predecessors did anything wrong; it would be a recognition that sometimes appearances do matter.

If the audit is done under the supervision of Mr. Gilliss and the board, it is going to continue the nasty rift among board member and it will lack the credibility that it needs to get BCPS out from in under a cloud. It is difficult the overstate the climate of mistrust that exists. See Ann Constantino’s latest story illustrating why citizens (and teachers and principals) are hesitant to believe anything coming out of the BCPS central office on contracting and procurement issues.

Mr. Dance pleaded guilty to four counts of perjury for failing to disclose nearly $147,000 that he earned from consulting jobs, including payments from a company, SUPES Academy, that Mr. Dance helped win a no-bid contract with the school system to train school principals. The statement of facts read after his guilty plea was jaw-dropping in several respects, but none more so than the fact that Mr. Dance’s chicanery began almost as soon as he was hired by the Board of Education in 2012.

When the story of Mr. Dance and the BCPS is written, it will have two parts. The first part, about Mr. Dance, will be a tragedy of Grecian proportions. Hired by the Board of Education at age 30, Mr. Dance was a rising star in the world of public education. Less than a year into his job at BCPS he already had earned glowing praise from such educational luminaries in Maryland as former state superintendent of schools Nancy Grasmick.

Six years later he probably is headed to prison, and his life and career are in tatters. For what? A few thousand dollars per year on top of his $275,000 salary as superintendent of county schools.

The second part of the story will be how some members of the Baltimore County Board of Education were blinded by reflected glory, and perhaps failed to see warning signs that they should have seen. There is no doubt that some members of the Board of Education basked in the glory of what appeared to be their inspired selection of Mr. Dance as his star continued to rise during his tenure with BCPS.

Mr. Dance’s signature initiative when he arrived at BCPS was his Students and Teachers Accessing Tomorrow (STAT) program, under which every student would be supplied with a laptop computer paid for by the school district. For reasons that remain controversial, BCPS chose HP’s Elitebook Revolve to begin the initiative.

In September 2014, shortly after the first schools received the HP laptops, HP invited Mr. Dance to give the keynote speech at a major education conference in New York City. Gus Schmedlen, HP’s vice president for worldwide education, described the event at a meeting of the Baltimore County Board of Education:

“We had to pick one group, one group to present what was the best education technology plan in the world for the last academic year,” Mr. Schmedlen said. “And guess whose it was? Baltimore County Public Schools!”

[Emphasis added.]

Microsoft, whose Windows software runs the laptops, named the district a Microsoft Showcase school system. Intel, whose chips power the laptops, gave Ryan Imbriale, the executive director of the district’s department of innovative learning, an Intel Education Visionary award. As described in the BCPS press release:

“Ryan Imbriale, executive director of the Department of Innovative Learning at Baltimore County Public Schools, has been named one of the Intel® Education Visionaries, an elite group of approximately 40 education leaders from all over the world who will be exemplars for global education transformation; inspire and share best practices with other educators, administrators and parents worldwide; and help Intel design the future of education technology.”

Here is part of a BCPS press releasepress release from April 2016 that gives you some sense of the chest-thumping that went on at school headquarters over STAT:

“STAT has since won attention both from national and international observers, including recognition through two national Digital Innovation in Learning Awards, a $1.5 million grant from the W.K. Kellogg Foundation, being named the sole ‘Showcase’ school system by Microsoft in 2015, being admitted to the League of Innovative Schools, receiving a Digital Content and Curriculum Achievement Award from the Center for Digital Education, and earning a grant through Maryland’s 2014 Digital Learning Innovation Fund. Dr. Dance also has discussed STAT before audiences including the Federal Communications Commission and a technology symposium in the Republic of Korea.”

And on it went.  The board members who reveled in Mr. Dance’s celebrity status had the full support of most members of County government. County Councilman Julian Jones said that the school district benefited from Dance’s growing national reputation as a digital-savvy superintendent appointed by President Barack Obama in 2014 to the Advisory Commission on Educational Excellence for African Americans and invited to events at the White House.

My point is that some members of the board had hitched their own reputations to Mr. Dance’s star, and had a hard time facing reality when that star began to fade. In my opinion, Mr. Gilliss was one of those members.

Mr. Gilliss jumped to the defense of Mr. Dance after the Baltimore Sun reported in October 2017 that Mr. Dance was traveling outside the school district during more than a third of all school days in 2016, and that most of that travel was for conferences focusing on education technology products and policies:

“Dr. Dance was present at everything that was important,” Mr. Gilliss said. “He was available to me at any time I called him. The mere fact that he was able to do a great job as superintendent is enough said. The fact that he traveled shouldn’t impact the recognition of the good things he accomplished for our district.”

Had I been Mr. Gilliss, I believe that I would have been a bit more circumspect in my response.  By time of the Sun story, Mr. Dance had given Mr. Gillis and other members of the board ample reason to be concerned about his conduct.

After the no-bid contract with SUPES Academy described above was approved by the board of education in 2012, Mr. Dance went to work for SUPES training principals in the Chicago public schools, where his friend and mentor, Barbara Byrd-Bennett, was the CEO. Mr. Dance, however, did not disclose his employment with SUPES to the board until it was reported in 2013 in a story by Liz Bowie of the Baltimore Sun.

In 2014, the Ethics Review Panel of the county school board found that Mr. Dance had violated ethics rules by taking a consulting job with a company doing business with the school system. The panel “found no evidence that Dance had been paid” for any work by SUPES, however, which ostensibly mitigated the severity of the violation. As we found out later, the finding that Mr. Dance had not been paid by SUPES was not correct.

In 2016, Mr. Dance had a second run-in with the board’s ethics panel. The panel determined that he should have disclosed both his pay as an adjunct professor at the University of Richmond and the fact that he had created a limited-liability corporation in 2012 known as Deliberate Excellence to conduct an outside consulting practice.

Again, the violation apparently was mitigated in the eyes of the panel based on Mr. Dance’s statement that Deliberate Excellence had not received any income. As it happens, that also turned out to be wrong.

In September 2017, the Sun reported that an investigation by the State Prosecutor of Mr. Dance’s relationship with SUPES Academy was underway.  The investigation had been initiated before Mr. Dance abruptly announced his resignation as superintendent of schools in April 2017.

In other words, by October 2017 there were enough questions to warn Mr. Gilliss against getting too far out in front in defending Mr. Dance’s conduct. Even Mrs. Grasmick, who had been effusive with her praise of Mr. Dance in 2013, suggested that Mr. Dance’s frequent absences meant that he could be neglecting his day-to-day leadership responsibilities with the school system. In other words, wiser heads had begun to worry about Mr. Dance.

The bad news kept coming, and the board of education again stumbled badly in the aftermath of reporting by the Sun in November 2017 that both Mr. Dance and his successor, interim superintendent Verletta White, failed to report on financial disclosure forms money that they received from the Education Research & Development Institute (ERDI), based in Chicago.  ERDI represents technology firms seeking to do business with school systems. ERDI also pays leaders of those school systems to advise them on how technology firms can improve their products.

Ms. White worked for ERDI from 2013 through 2016 while at the same time serving as the chief academic officer for BCPS. According to the Sun, BCPS awarded no-bid contracts to several ERDI client companies, including Discovery Education, DreamBox Learning and Curriculum Associates, during the time Mr. Dance and Ms. White were paid by ERDI. The New York Times reported that after Mr. Dance participated in confidential meetings with two of BCPS’s tech vendors at an ERDI conference last year, the BCPS extended both companies’ contracts.

Under public pressure, Ms. White proposed (with the apparent blessing of the board) that an audit be performed of educational technology procurements that took place between July 1, 2016 and June 30, 2017 by an independent accounting firm hired by the school district. That proposal never should have seen the light of day, and public confidence in the board of education was irretrievably lost.

First, Ms. White should have recused herself completely from any participation in the design or execution of the audit. It is true that I say “only in Baltimore County” a lot, but the fact remains that only in Baltimore County would an official whose conduct helped trigger the need for an audit believe that it was okay to make decisions about the audit.

Second, what about the years from 2013 through 2016 when she was being paid by ERDI? (Both she and Mr. Dance were paid by ERDI in 2014 and 2015.) It was astounding that she would propose an audit that omitted that critical period. It was not until after urging by the state superintendent of schools that the scope of the audit was expanded.

In early December 2017, a group of parents and four of the twelve members of the county board signed a letter to the state board of education. The letter asked that the state be involved in “developing and implementing an independent, comprehensive forensic audit” of how BCPS has conducted its ambitious and expensive program of procuring information technology intended to enhance the education of its students.

Mr. Gillis, who did not sign the letter, reacted testily. He told WBAL-TV: “First, if members of the board went (to the state board), they went without my knowledge. Second, if they went, I hope they said, “we’re just citizens of Baltimore County and not board members.’ They don’t speak for the board.” While the latter statement may have been true, there was a larger point that he seemed to miss.

That point was that a critical mass of people both inside and outside of the school system in the county had begun to question both the wisdom and implementation of the school system’s technology initiative. They had begun to wonder whether the school system took seriously enough the conflicts of interest that had been reported as well as the possibility that decisions about the technology initiative had been driven by the greed or self-aggrandizement of school system officials.

In my opinion, Mr. Gilliss also overreached in his assurances about Robert Barrett. Mr. Barrett pleaded guilty in September 2017 to tax evasion charges arising from his failure to report thousands of dollars in bribes paid to him from 2011 through 2013 while he was a senior Baltimore County school system employee. The guilty plea was not made public until earlier this month.

Mr. Gilliss stated that he was “wholly confident” that Barrett did not influence the award of any school system contracts because Barrett “did not have any role in any manner” in the purchasing process. Mr. Barrett may not have had any formal role, but how was Mr. Gilliss so sure that Mr. Barrett had not used his position to steer contracts in a certain direction?

Less than a month earlier, Mr. Gilliss had explained that local school boards do not provide “oversight of day-to-day administration of local school systems.” So, whose word did Mr. Gilliss rely upon that Mr. Barrett had kept his fingers out of the purchasing process? I am sure that Mr. Gilliss meant well, but his assurances were not very reassuring.

I understand the inclination by Mr. Gilliss to rush to the defense of the institution in which he has invested so much time and effort.  Mr. Gilliss needs to understand that his history of doing so raises questions about his objectivity in the minds of many citizens and public officials.

After Mr. Dance was indicted in January of this year, Mr. Gilliss urged people not to rush to judgment on the charges against Mr. Dance. He denied that the Board of Education had been negligent in its oversight of the former superintendent and said that the board had “been a positive steward of the trust placed in it by its elected officials on behalf of the community.”

Mr. Gilliss is smart enough to know that the citizens of Baltimore County are not going to take his word for that, and the case for the board being a good steward of the trust placed in it by the public was weakened by a story last week in the Towson Flyer. The Flyer reported that BCPS officials had resisted a recommendation in 2015 by the Office of Legislative Audits of the Maryland General Assembly that BCPS “amend its existing policies to require competitive procurement methods to be used for all contracts for services.” No-bid contracts are, of course, more subject to manipulation and abuse than competitively-bid contracts.

The Flyer also reported that BCPS officials declined to say whether the recommendation had ever been adopted. As if stonewalling the media and public does anything but contribute to suspicion of BCPS.

Mr. Gilliss is not running for election, and this will be his final year on the board. It would be a meritorious end to his tenure on the board, and a credit to his leadership as chairman, if he joined the voices calling for the state to assume control of the audit of the contracting and procurement practices of the Baltimore County school system.  Be part of the solution, Mr. Gilliss, not part of the problem.

∞ ∞ ∞

If you want to see what a worthwhile audit or investigation looks like, look at the Final Report prepared for the Maryland State Board of Education by a company called School Bus Consultants in the aftermath of the death of six people in a 2016 accident caused by the driver of a school bus under contract to Baltimore City Public Schools. The audit was performed at the recommendation of the National Transportation Safety Board (NTSB) “that [Baltimore City Public Schools] request that the Maryland State Department of Education (MSDE) have an independent and neutral third party conduct a performance audit of (the BCPS) transportation department that includes a review of crash reports and of disqualifying conditions for school bus drivers.”

A few takeaways from the School Bus Consultants audit: It was overseen by the state rather than by the city board of education, and it was performed by an independent and neutral third party. Those measures, recommended by the NTSB, ensured that the entity under review – Baltimore City Public Schools – had no say in either the selection of the auditor or the scope of the audit. And those are exactly the safeguards upon which the citizens of Baltimore County should insist for the audit of the contracting and procurement practices of the Baltimore County school system.

The audit done by School Bus Consultants went beyond what went wrong in the course of the operation of the Baltimore City Public Schools Office of Pupil Transportation that allowed a driver with a disqualifying medical condition behind the wheel of a school bus. It also investigated why it went wrong, and concluded that the “culprit” for what is described as an “accumulation of errors” was “a systemic absence of leadership over an extended period of time.”

Similarly, the audit of the contracting and procurement practices of the Baltimore County school system must go beyond identifying what if anything went wrong. If something went wrong, why? Are the proper protocols in place to prevent abuse of “piggy-back” procurements? If so, were they were followed? If they were not followed, why? Was it a failure of management, or was it corruption?  It is only when those questions are answered that BCPS can get past this controversy.

March 18, 2018

 

What in the world are you talking about, Councilman Jones?

The Baltimore Sun approached various people for their comments on the last-minute guilty plea by former Baltimore County Schools Superintendent Dallas Dance. Dance pleaded guilty today to four counts of perjury, admitting that he lied about outside income on financial disclosure forms that he signed under oath, and that he steered no-bid technology contracts to a company he worked for on the side.

Nothing inane or offensive that comes out of the mouth of a Baltimore County official should surprise me anymore, but I was dumbfounded by the statement by County Council President Julian Jones. Mr. Jones reportedly told the Sun:

“I was shocked and disappointed. I don’t like what happened. I don’t condone it, but … he’s owning up to what he did.”

“Owning up to what he did”? What in the world are you talking about, Councilman Jones? Dance pleaded guilty on the day that trial was scheduled to begin and did so only because the state’s case against him was not only strong, it was devastating.

Dance had many chances to “own up” to his misdeeds over the five years that he pulled the wool over the eyes of the Board of Education and the citizens of the county, and never did so.  That’s five years during which he could have come clean, but didn’t.  He didn’t “own up” to anything, Councilman.  He got caught.

Here’s an example of what Dance was up against if the case went to trial: It appears from the statement of facts read by State Prosecutor Emmet Davitt that Davitt had evidence showing that Dance told Gary Solomon, one of the owners of SUPES Academy, that he (Dance) was going to fire Anissa Brown-Dennis, who at the time was Director of Leadership Development for the Baltimore County Public Schools. Brown-Dennis apparently had become a fly in the ointment in the relationship between Dance and SUPES, from whom Dance was receiving income that he had not disclosed to the Board of Education.

Brown-Dennis informed a sales representative for SUPES that she was not interested in pursuing a contract with SUPES for leadership development services. Dance wrote to the sales representative telling him that he would reach out to Anissa Brown-Dennis about the status of the contract. Thereafter, Dance allegedly told Solomon that he would fire her, presumably to remove her as an obstacle. The no-bid contract eventually was approved, after being sent directly to Dance.

A threat to fire an employee to grease the skids for a sleazy deal is ugly stuff, and won’t be forgotten when it comes time for the judge to sentence Dance.  Dance pleaded guilty because he couldn’t afford to pass up a plea bargain in which the State Prosecutor recommended that Dance spend only 18 months in jail.

Given what I read in the statement of facts, and given Dance’s history of ethical lapses, I think that even with that recommendation there is a chance that Dance will spend more than 18 months in jail. Without it, my guess is that Dance was facing twice that much time in jail.

I would not have paid any attention to the comment by Councilman Jones if I thought it was just an isolated, improvident remark. The problem is that I believe that it reflects a certain mind-set. In my opinion, this isn’t the first thing that Councilman Jones hasn’t taken seriously enough or has been too willing to overlook during his time on the Council.

Councilman Jones, there is nothing redeeming about what Dance has done, at least not yet. Be willing to call things for what they are and worry less about whom you are pleasing or offending.

March 8, 2018

Have Kamenetz and company mortgaged Baltimore County’s future?

Unfortunately, I believe the answer is Yes. The problems didn’t start with the current administration, but they certainly have accelerated under Mr. Kamenetz’s leadership. His successor, and his successor’s successor, will be left with crumbling infrastructure and revenue streams inadequate to repair or replace roads, schools, storm water management facilities, and government buildings. The day of reckoning is coming sooner rather than later, and it is going to be painful.

I chuckled, albeit ruefully, when I read the story by Pam Wood of the Baltimore Sun about the latest report from the County’s Spending Affordability Committee. Councilman Tom Quirk, who often has served as Mr. Kamenetz’s mouthpiece on the Council, seems suddenly to have found fiscal religion, grousing that Mr. Kamenetz has refused to provide a long-term plan to pay for all the county’s school construction projects and for health care for retirees, among other things.

Mr. Quirk, one of the members of the Spending Affordability Committee, wrote in the report: “The county’s financial outlook presents immense challenges that the next administration and council will be forced to address.” I am thinking that Mr. Quirk’s new-found willingness to challenge Mr. Kamenetz may have something to do with the decision by Mr. Kamenetz to fund the construction of a new high school for Dulaney Valley rather than for Lansdowne, which is in Mr. Quirk’s district.

I am sure that Mr. Quirk felt especially aggrieved by the Dulaney Valley decision, given his loyalty to Mr. Kamenetz over the past eight years. I have only one question for Mr. Quirk: What did you expect? That Mr. Kamenetz wouldn’t kick you to the curb when it served his purposes? I hope that you are a better financial adviser than you are a judge of character.

In any event, Mr. Quirk and the rest of the members of the Spending Affordability Committee are correct: There’s tough sledding ahead.

Mr. Kamenetz has robbed Peter to pay Paul, with Peter being the repair and replacement of infrastructure and financing long term obligations such as retiree health care, and Paul being development interests. The $43 million in assistance to developers intended to kick start the stalled Towson Row development is just the most recent (and most outrageous) example, but Mr. Kamenetz has been nothing if not consistent in the priority that he gives to the desires of developers over the needs of ordinary communities.

There is a reason that Mr. Kamenetz has been reticent to produce the long-term plans described by Mr. Quirk. Such plans can be uncomfortable reminders of expensive and unsolved problems. A few years back the Anne Arundel County Director of Public Works put together a long-term plan to fix that county’s neglected storm water management infrastructure. The price tag for implementing the plan was eye-popping. After the plan was released, politicians in the county expended most of their efforts on attacking the plan and its author, trying to make the bad news go away.

Mr. Kamenetz is the absolute master at reducing his exposure to criticism. He releases the minimum amount of information necessary; less if he can away with it. He doesn’t do interviews with the media on county problems or controversies – he issues self-serving statements on issues. Everything in county government is kept as close to the vest as possible, and public debate is discouraged. You think he is going to allow his departments to produce plans illustrating the unmet needs in the county, and how prohibitively expensive it will be to meet them? Not a chance.

I was glad to see that Ms. Wood mentioned impact fees in her story. The failure of Baltimore County to use impact fees or development excise taxes to fund the expansion of facilities necessary to accommodate new residential and commercial development in the county has been its single greatest fiscal mistake, and it has been an enormous one.

I’ll start with a question: Why do you think that developers lavish such enormous sums of money on Mr. Kamenetz and members of the County Council? Answer: Because development in Baltimore County is extremely profitable, in part because builders and developers do not pay for the costs of the expansion of public facilities necessary to support new development. The general taxpayers of the county do. Development in Baltimore County is subsidized by general taxpayers more than in any other comparable county in Maryland – and that does not include direct assistance such as provided to the developers of Towson Row.

The impact of no impact fees.

The last time that Baltimore County gave serious consideration to the imposition of impact fees was in 2005. It was a study by Anirban Basu and the Sage Policy Group commissioned by the Maryland Homebuilders Association (a trade group) that helped persuade Baltimore County officials that impact fees were not justified in Baltimore County. Mr. Basu concluded in 2005 that existing taxes and fees paid by the owners of new construction more than offset the costs of expanding the capacity of public facilities to accommodate the new construction.

Suffice it to say that other economists have studied jurisdictions with similar tax and fee structures and concluded that, without impact fees or development excise taxes imposed on builders and developers, the owners of existing homes and businesses subsidize the expansion of infrastructure capacity necessary to support new construction. In any case, Baltimore County remains the only metropolitan county in Maryland (and the only county in Maryland with a population of over 100,000 except Wicomico County) that does not impose either impact fees or development excise taxes on builders and developers – and it shows.

When you drive around the streets and road of the county, and visit schools and other public buildings, two words come to mind: Deferred maintenance. Infrastructure is not being repaired or replaced when it should be in Baltimore County. As it happens, I often have occasion to drive the back streets in District 4, the district represented by Council Chairman Julian Jones, one of Mr. Kamenetz’s other biggest cheerleaders on the County Council.

The condition of many of the streets in District 4 is dreadful. If Mr. Jones expected something in return for his unconditional support of Mr. Kamenetz, he sure didn’t get it in the form of improvements to the condition of the streets in his district.

The shortage of funds to do basic maintenance is directly attributable to the absence of impact fees. Money that otherwise could be used for basic maintenance of existing facilities goes toward supporting new development. Let’s look at two neighboring counties for a comparison.

The combined populations of Anne Arundel County and Howard County are just a little more than the population of Baltimore County. In the past three fiscal years, those two counties collected a combined total of about $96.5 million in impact fees.

That’s $96.5 million that the two counties did not have to spend on expanding the capacity of streets and roads and other public infrastructure to support new residential and commercial development and could use to take care of existing infrastructure. Think of what Baltimore County could have done to fix its streets, roads, schools, and other infrastructure with $96.5 million over the past three years.

For example, the developers and builders of Towson Row will not have to pay transportation impact fees. So, who is going to pay for the widening and other improvement of streets and roads in Towson necessary to cope with the traffic generated by Towson Row? That’s right, the same taxpayers paying for the $43 million bailout.

Ironically, it was Mr. Basu and his Sage Policy Group that also helped persuade the Baltimore County Council that the financial assistance package for Towson Row was a good idea. Maybe Baltimore County could ask Mr. Basu to calculate what the developers would pay in impact fees for Towson Row if it was in Anne Arundel or Howard County.

It is almost certain that if Baltimore County had enacted impact fees in 2005 it would not be facing the problems identified by the Spending Affordability Committee. It would have been better able to keep pace with the need for replacing schools, repairing roads, etc., and would not be confronting the choice of either increasing property or local income taxes, or drastically reducing spending.

Citizen apathy.

It is wrong to place all the blame on Mr. Kamenetz and his supporters on the County Council for the fact that the county has mortgaged its future. The notorious apathy of a large percentage of the citizens in Baltimore County has played a critical role. Although Mr. Kamenetz did not create that apathy, he exploited it. He certainly never told citizens that an increase in the rate of their property or local income taxes was inevitable, or that the longer the increase was delayed the greater it would have to be.

So long as their elected officials don’t raise their taxes, many Baltimore County citizens are content to ignore county government. The day is coming when those citizens are going to have to accept either an increase in taxes or a precipitous decline in their quality of life.

Because the problem has been ignored for so long and exacerbated by the policies of the past eight years, the reference by the Spending Affordability Committee to the “immense challenges” that lie ahead may be understatement. One thing is for sure, and that is that Mr. Kamenetz will not be around when it comes time to pay the piper.

David A. Plymyer

[Some of the material in this post on impact fees was drawn verbatim from prior posts on the subject.]

 

Without changing more than the commissioner, the BPD will remain on course for a rendezvous with an iceberg.

I wish the absolute best of luck to newly-appointed Baltimore Police Commissioner Darryl De Sousa. What a blessing it would be for Baltimore to once again be a safe city to live in, visit, and enjoy. It would lift a terrible cloud over a great city. On the other hand, as I am often reminded: This is Baltimore, hon. It pays not to be too optimistic.

Far be it from me to throw cold water on the enthusiasm over his appointment to replace Kevin Davis, but here is the note of realism that I hope to interject: If nothing is done other than change the captain of the ship, the Baltimore Police Department (BPD) will remain on course for its rendezvous with an iceberg.

I am not talking about a change in police strategy or tactics, per se. It remains to be seen exactly what De Sousa will do differently, but I am willing to assume that there will be the return to more focused, proactive policing that many in the law enforcement community have urged. It sounds as if the new commissioner starts off with the confidence of his officers, and that is a positive development.

What I am talking about is altering the culture of corruption and mediocrity that has gripped the BPD for a long time.  It grated on the nerves of Mr. Davis when I and others complained about the ineffectiveness of discipline and qualitative performance management within his department. In his final interview as commissioner, he complained that “the whole notion that accountability is not underway is crap.”

At the same time, however, Mr. Davis admitted that the BPD “is a dysfunctional police department.”  Davis added:  “I’m telling you as a person who has seen what a healthy organization looks like. This is not one of them.” He also said that the BPD has a “culture that looks at accountability as a four-letter word.”

Ironically, the language used by Mr. Davis in his final days was remarkably like language used by his predecessor, Anthony Batts, in his last days as commissioner. Shortly before he was fired in 2015, Mr. Batts lamented that when he came to the BPD as commissioner in 2012 “the cycle of scandal, corruption and malfeasance [within the department] seemed to be continuing without abatement.” He predicted that his reform efforts would see more officers arrested or forced out.

My fear is that Commissioner De Sousa made the same mistake made by his predecessor.  To my knowledge, Mr. Davis did not insist, as a condition of taking the job as commissioner in July 2015, that he be given the tools necessary to turn the department around in a timely fashion. By not doing so, the failure of Mr. Davis as police commissioner was pre-ordained. Individual personalities and skills make a difference, but not enough to overcome structural deficiencies so profound that any commissioner lacks definitive influence over the culture of the department – and it is the culture that must be changed.

So, if Commissioner De Sousa didn’t make it clear to city officials, I will say it for him: Don’t expect him to make enough of a difference to really matter unless he is given adequate authority to run the department.  By run the department, I mean to be fully in charge of who stays, who goes, and who does what within the department.

There are two primary impediments to restoring to whomever is the Baltimore police commissioner the power to control his or her own department, and the hurdles are interrelated: The first impediment is a statewide Law Enforcement Officers’ Bill of Rights (LEOBR) that is generally considered the most restrictive in the country. By restrictive, I mean that the Maryland LEOBR poses the highest bar to the imposition of discipline by a police chief. By design, it slows the disciplinary process to a crawl and assures that only the very worst officers get terminated.

The last line in a story by Justin Fenton of the Baltimore Sun makes a key point. In trying to answer the question why officers against whom allegations of misconduct had been made nevertheless were named to initiatives such as the now-infamous gun trace task force, a former internal affairs supervisor observed: “The [internal affairs] system was slower than the movement of the rest of the agency.” That is another way of saying that the disciplinary process takes so long that it is almost irrelevant to management of the department.

The second impediment is the inordinate influence asserted by the both statewide and local police unions. On the state level, the Fraternal Order of Police (FOP) and other representatives of law enforcement officers have fought changes to the LEOBR. On the local level, the mayor and city council are so cowed by Lodge No. 3 of the FOP that they have subjected far too much control over the operations of the BPD to collective bargaining.

The editorial statement by the Maryland Daily Record in January 2016 that the BPD could not be reformed unless someone managed to “dismantle the police union’s grip on city government” is as true now as it was then. The grip is as tight as ever.

I’ve been through the following litany of things that must be done so many times that it bores even me to repeat it: Scrap the Law Enforcement Officers’ Bill of Rights (LEOBR) as currently written, at least as it applies to the BPD; give the commissioner the sole power to decide, in the first instance, whether an officer’s actions or inactions merit discipline and, if so, what that discipline should be.

To anyone who says that the LEOBR is not a problem for the BPD, I say this: You either are a cop with an agenda or you have no idea what you are talking about, or both. It’s not the only problem, but it is the problem that makes solving all the others too hard.  If the internal disciplinary system isn’t fixed, the commissioner will continue to have to rely on the FBI and the United States Attorney to address misconduct within the BPD.

Something else that needs to be done is to get sergeants and lieutenants out of the same union as the rank-and-file officers they supervise. Increase their pay significantly and, in return, make them at-will employees subject to being fired with or without cause by the commissioner.

I’ve gone on ad nauseam about the fatal weakness of the department at the level of sergeant and lieutenant. I first suggested the idea that the commissioner needed the power to clean up the mess at the front-line supervisory level in an op-ed published in August, 2015. It was a point I emphasized again a year later in another op-ed. Both were published well before the United States Attorney for the District of Maryland announced the indictment of members of the BPD’s “elite” gun trace task force in March, 2017.

What is the most jarring phenomenon that emerged from the saga of the gun trace task force, probably the biggest single scandal in the modern history of the BPD? For me, it is the role played by Sergeants Thomas Allers and Wayne Jenkins, supervisors of the unit.

These were the men expected to keep their subordinates within the bounds of the law. As I described in one of the op eds referenced above, sergeants are the guardians of the culture of the BPD. In the case of the gun trace task force, they were the ringleaders of a ruthless, organized criminal enterprise.

How can a police force function with supervisors like Sergeants Allers and Jenkins? Answer: It can’t. Those two may be the worst of the worst, but on what basis would you conclude that two sergeants in a hand-picked “elite” unit are the only examples of a structural weakness in the department? Read the DOJ report about the quality of the field-level supervision within the BPD.

The focus of this post is on the task of reducing corruption and other abuses within the BPD. There is of course another monumental task at hand: Reducing the rate of murder and other violent crime in the city. Make no mistake about it, the two tasks are related.

Mr. Davis announced the general end of plainclothes units after the gun trace task force indictments, stating that they were doing more harm than good. Although his claim that uniformed teams can be equally effective at performing certain tasks is debatable, it is hard to fault his concern over what he described as a “cutting-corners mindset.”

Current and former members of the BPD tend to look back on the now-defunct Violent Crimes Impact Division, or VCID, with a certain degree of nostalgia. The plainclothes unit is widely credited with helping reduce homicides to their lowest level in decades under former Commissioner Fred Bealefeld in 2011. Even assuming that is true, it is also true that the VCID had its own history of running amok.

It is axiomatic that the more aggressive the tactics used by police, the better trained and supervised the officers need to be to stay within constitutional limits on their powers; the closer you get to the line, the more discipline and self-control that you need to avoid stepping over it. And herein lies a problem right now for the BPD: There aren’t enough sergeants and lieutenants that can be trusted with the responsibility for supervising officers under those circumstances.

Commissioner DeSousa and his commanders need the power to run the rule over all the current sergeants and lieutenants, deciding which to keep and which to force out. Is that a draconian measure? Yes, but it is a necessary one. It is the only way to cut out the cancer before it is too late.

Mr. Davis certainly was correct about the unhealthiness of the department, but here is where Mr. Davis was wrong about accountability in the department: Accountability may be “underway,” but it is not underway quickly or comprehensively enough to get ahead of the corruption curve. The sickness of the culture has been spreading faster than either he or his predecessor could get rid of it.

To me the most telling sign of the diseased culture is the ubiquitous lying. Officers lying on the stand, lying on statements of charges and search warrant affidavits, lying on time sheets, lying about evidence depicted on body cameras, and lying about each other’s conduct.

A story reported the other day by the Sun’s Kevin Rector was another revealing one. He described testimony by an officer that was shown to be false upon cross-examination. What struck me was the casual and careless nature of the officer’s claim that he had seen the defendant frequent a location during a time when he should have known that the defendant was in prison.

My point is not the officers should be more careful when lying. My point is that spewing falsehoods almost seems like second nature, with little regard for the consequences. Mr. Davis may be right that accountability is a four-letter word. The duty of candor, on the other hand, seems to be regarded as joke.

Commissioner De Sousa needs to target the mendacity that pervades the BPD directly and immediately. At this point, there is only one way to do that before the department self-destructs completely: Zero tolerance for lying. Establish a duty of candor for all officers toward their superiors and other elements of the criminal justice system, and get rid of officers who violate it.

The appointment of Commissioner De Sousa is an opportunity for positive change. It also poses risks, one of which is that city and state leaders assume that Commissioner De Sousa can succeed where Mr. Davis failed without giving Commissioner De Sousa the tools that they should have given to Mr. Davis.

Ironically, that risk could be made worse by a downtown in the murder rate. That doesn’t mean that I wouldn’t welcome such a development; it does mean, however, that we should recognize two things. The first is that murder rates generally are cyclical, and Baltimore’s is statistically unlikely to trend consistently upward, regardless of the quality of the policing. In other words, we could have a downturn that is welcome, but serendipitous.  If that happens, we can’t let it fool us into believing that the problems with the BPD have been solved.

The second is that, if the city and state do not fix the structural deficiencies that underlie the dysfunctional culture of the BPD, the corruption that has plagued the department for decades will continue. If the changes are not made and Commissioner De Sousa fails, his failure will be a collective one, shared by the mayor and city council and the General Assembly – just like the failure of Mr. Davis.

January 22, 2018

The Towson Row bailout is a good deal for whom?

There is an editorial posted today by the Baltimore Sun captioned “Towson Row has been handled badly but still may be a good deal.” A good deal for whom? Certainly for the developers.  Probably not for the City of Baltimore or for the ordinary taxpayers of Baltimore County.

The Sun’s editorial board focused on the practical problem of filling the empty crater located where Towson Row is supposed to be. There is a longer view that I believe that the editorial board missed. I wholeheartedly agree, however, with the point made in the editorial that there are important questions remaining to be answered, and that the Baltimore County Council cannot responsibly vote on the proposed $43 million bailout as scheduled on Monday.

Hopefully, the County Council will heed that advice. Given more time, perhaps the other important questions can be explored, and the longer view taken. I have three suggested areas of inquiry. The first is whether the scale of the proposed development is harmful to the City of Baltimore.

What happened to the concept of “regionalism”?

During his testimony at Tuesday’s work session on the proposed bailout, Will Anderson, the director of the County’s Department of Economic and Workforce Development stated that Towson Row was intended to position the County to be able to compete with Anne Arundel and Howard County and the City of Baltimore. It was a point underscored by Anirban Basu, an economist and president of Sage Policy Group, which was paid $9,600 by the County to analyze the economic impact of Towson Row.

Mr. Basu downplayed the size of the County’s contribution. He described the $43 million amount as relatively small, especially considering the County’s need to “compete” for economic development. Here is Mr. Basu’s statement as reported by WYPR:

“Because there is a Harbor East. There’s a Harbor Point. There’s a Port Covington. There’s a Locust Point. And all of these areas are competing with Towson for the most prestigious employers, the highest paying employers in the region.”

Should Baltimore County be using taxpayers’ money to compete with the City of Baltimore for the headquarters of major employers at this point in time? Is it a legitimate goal of Baltimore County government to use government subsidies to turn Towson into a traffic-choked replica of Silver Spring at the expense of the City of Baltimore, when the city is in a life-or-death struggle to restore its employment and tax base?

County Executive Kevin Kamenetz describes himself as a friend of the city, and as embracing “regionalism.” To date, regionalism is a concept to which he has given mostly lip service.

Attempting to create a large edge city replete with high-rise office buildings a couple of miles outside of the city is not regionalism. Washington, D.C., with a massive federal agency presence downtown, can survive a Silver Spring on its outskirts. The City of Baltimore may not.

It is an issue that was largely glossed over when Towson Row was proposed in 2013, and again in 2015 when the County Council rushed through the zoning concessions necessary to allow the developers to shoehorn 1.2 million square feet of improvements on about five acres of land.  Better late than never, and the issue should be considered by the County Council before it votes to approve the bailout.

Why isn’t the absence of development impact fees in Baltimore County recognized as part of the taxpayer subsidy of Towson Row?

In a post on Tuesday, I talked about how the absence of development impact fees or development excise taxes has been a boon for developers in Baltimore County, but has harmed residents. The last time that Baltimore County gave serious consideration to the imposition of impact fees was in 2005.

Ironically, it was a study by Mr. Basu and the Sage Policy Group commissioned by the Maryland Homebuilders Association (a trade group) that helped persuade Baltimore County officials that impact fees were not justified in Baltimore County. Mr. Basu concluded in 2005 that existing taxes and fees paid by the owners of new construction more than offset the costs of expanding the capacity of public facilities to accommodate the new construction.

Suffice it to say that other economists have studied jurisdictions with similar tax and fee structures and concluded that, without impact fees or development excise taxes imposed on builders and developers, the owners of existing homes and businesses subsidize the expansion of infrastructure capacity necessary to support new construction. In any case, Baltimore County remains the only metropolitan county in Maryland (and the only county in Maryland with a population of over 100,000 except Wicomico County) that does not impose either impact fees or development excise taxes on builders and developers – and it shows.

When you drive around the streets and road of the County, and visit schools and other public buildings, two words come to mind: Deferred maintenance. Infrastructure is not being repaired or replaced when it should be in Baltimore County. That will catch up with the County sooner rather than later.

I threw some numbers around in my post on Tuesday, and I will provide some more today. The combined populations of Anne Arundel County and Howard County are just a little more than the population of Baltimore County. In the past three fiscal years, those two counties collected a combined total of about $96.5 million in impact fees.

That’s $96.5 million that the two counties did not have to spend on expanding the capacity of streets and roads and other public infrastructure to support new residential and commercial development, and could use to take care of existing infrastructure. Think of what Baltimore County could have done to fix its streets, roads, schools, and other infrastructure with $96.5 million over the past three years.

The developers and builders of Towson Row will not have to pay transportation impact fees. So who is going to pay for the widening and other improvement of streets and roads in Towson necessary to cope with the traffic generated by Towson Row? That’s right, the same taxpayers paying for the $43 million bailout.

Maybe Baltimore County could chip in a little bit more money and ask Mr. Basu to calculate what the developers would pay in impact fees for Towson Row if it was in Anne Arundel or Howard County. I believe that the savings to the developers attributable to the fact that they will not have to pay impact fees in Baltimore County should be recognized as part of the County’s financial contribution to the development.

Do the developers need the bailout to make Towson Row economically feasible, as they claim?

Brian Gibbons, the president and CEO of Greenberg Gibbons, testified on Tuesday that the developers needed the proposed County funding to make the project work. Mr. Gibbons has a sound reputation as a developer, and his credibility is not in question. But that’s not the point. Individual members of the County Council may operate on trust, but as a body the County Council is under a duty to verify.

In an email that I sent to the County Council on Monday, I suggested to the County Council that they should require the County Attorney to confirm on the record that the County Council has the legal authority to approve the bailout. A city or county cannot simply decide to spend public money for a private purpose outside of a specified framework enacted into law by statute or ordinance.

The only such framework relevant to the proposed bailout of which I am aware is found in Title 10 of Article 10 of the Baltimore County Code, which establishes the Economic Development Revolving Financing Fund. Before a loan or grant may be made from that fund, a detailed application must be submitted to the Department of Economic and Workforce Development that requires the applicant “to supply information necessary to evaluate the requested financial assistance” including the “financial ability of the applicant” and the “need” for the assistance.

The application for financial assistance in this amount for a project of this size would be voluminous. Was an application submitted, and has it been made available for review by the County Auditor and County Council? Was an evaluation of the application performed by the Director of Economic and Workforce Development according to the criteria specified in § 10-10-105(d) of the County Code?

If the procedures set forth in § 10-10-105 of the County Code were not followed, what is the legal authority for the proposed financial assistance to the developers of Towson Row? Failure to follow the legal formalities necessary to obtain the assistance would spell doom for the tax credit advances and hotel tax advances if a taxpayer’s suit is filed.  Considering the widespread and vehement opposition to the bailout, it would be foolish to assume that a taxpayer’s suit would not be filed.

                                                                          * * *
The editorial in the Sun accurately described the mishandling of this matter by the Kamenetz administration. If anything, the Sun’s observation that Mr. Kamenetz “has worn out his welcome with many voters” is a gross understatement. In my opinion, the chickens from his generally imperious attitude toward residents have come home to roost.

I take issue, however, with the suggestion in the editorial that “politics…related to Mr. Kamenetz’s gubernatorial aspirations” is playing a role in the opposition to the bailout. From what I have seen and heard from the opponents, it appears to me that the opposition is based on the belief by the opponents that the proposed bailout is simply one more instance in which the Kamenetz administration has favored the interests of developers over the interests of the ordinary citizens of Baltimore County.

December 14, 2017

The Towson Row bailout.

Baltimore County Executive Kevin Kamenetz has asked the County Council to approve what, in my opinion, can only be described as a $43 million bailout of the prospective developers of Towson Row. Towson Row is a massive but stalled project lying in the heart of Towson. The bailout is scheduled to be discussed at a work session of the County Council on Tuesday, December 12th, with a vote planned for the Council meeting on Monday, December 18th.

The proposed bailout was presented to the County Council on December 4th. Is sixteen days sufficient time for the County Council to review and approve such an extraordinary, unprecedented measure? Of course not.  Haste is particularly foolhardy in the matter at hand.

To her credit, Pamela Wood of the Baltimore Sun obtained copies of the “County Funding Agreement” and “Development Agreement” that the County Council is being asked to approve, and posted them online on December 8th. I have reproduced below a copy of the email that I sent to members of the County Council yesterday raising some issues that I believe that they must consider before voting to approve the agreements.

Am I confident that the members of the County Council will read and understand the two agreements, or read my email, before they vote on December 18th? No, but one can always hope.

Before I get to the email, let’s get the obvious out of the way: Mr. Kamenetz’s primary motivation for proposing this bailout is, in my opinion, to heal a potentially-fatal political wound. Mr. Kamenetz is an announced candidate for governor, and he can ill afford to go into next year’s elections with Towson Row consisting of nothing more than it is now: A cratered eyesore in downtown Towson.

In a podcast reported yesterday in the Baltimore Business Journal, Mr. Kamenetz stated that he would try to separate himself from the other Democratic candidates on the issue of economic development by touting his success in projects like Towson Row. In the podcast, he pointed to the redevelopment of Sparrows Point and the Owings Mills Mall. The debacle over Towson Station and the potential failure of Towson Row threaten to undermine that campaign theme.

Mr. Kamenetz isn’t going to win the governor’s race on the strength of his less-than-charming personality. He already is going to have to live during his campaign with the infamous video of him telling Mays Chapel residents that “it is my job to talk, your job to listen right now.”

Mr. Kamenetz is going to have to try to sell himself to the voters of the state as a goal-oriented and successful, if occasionally arrogant and abrasive, leader. A montage of images that includes the episode in Mays Chapel as a representation of his temperament, and a photo of the large empty patch of dirt where Towson Row is supposed to be as a symbol of his failed economic development policies, would doom his chances to be elected governor. In my opinion, Mr. Kamenetz is desperate to get construction underway on Towson Row.

Caves Valley Partners, a developer with close political ties to County Executive Kevin Kamenetz, unveiled its plans for Towson Row in 2013. The project is a mixed-use development sitting on approximately five acres bounded by York Road, Towsontown Boulevard, and Washington and Chesapeake Avenues. The ambitious plans announced in 2013 called for office buildings, a hotel, apartments, student housing, and retail shops anchored by a Whole Foods grocery store. The project consisted of 1.2 million square feet of space on five acres of land, with a price tag of $350 million.

Four years later, there is nothing but a large hole in the ground in the heart of Towson. The project faltered, with Arthur Adler, one of the Caves Valley partners, explaining that the construction of the planned parking garage under the Whole Foods grocery story “became too costly due to the rock presence as well as other construction costs.” Mr. Adler later clarified that Caves Valley was aware of the presence of rock, but that the cost to remove the rock was greater than expected.

In May of this year, the Owings Mills development firm Greenberg Gibbons Commercial Corporation announced that it would work with Caves Valley as “co-developers” of Towson Row. Brian Gibbons, chairman and CEO of Greenberg Gibbons, said that his company would bring expertise as well as $100 million in additional investment to the project, which would be “jointly controlled” by Greenberg Gibbons and Caves Valley.

Mr. Gibbons stated that his company had been working “in the background” with Caves Valley for 18 months on a redesign of the project. “We’ve simplified the design,” Mr. Gibbons said. “We now have a project that is feasible to build.”

There was no mention at the time of any need for an infusion of County money, at least not publicly.  The subject of County grants did not come up in public until last month.

Earlier this month, Mr. Gibbons told the Sun that receiving the County’s financial help is “essential” to making Towson Row work. He stated that the County’s contribution is needed to finalize financing with a California pension fund that is investing in the project. The nearly $43 million in up-front help from the County represents “the minimum threshold we needed with our partners.”

Mr. Gibbons informed the Baltimore Business Journal that he expected to break ground with the construction of the Whole Foods grocery store at Towson Row in mid-2018. It now appears that he meant that he expected to break ground in mid-2018 if the County comes up with the money that the developers have requested.

The conventional wisdom in Baltimore County is that the developers have the Baltimore County Executive and County Council over a barrel with the developers’ insistence that they now need $43 million in County grants to make the development of Towson Row economically feasible. If it is true that the County Executive and County Council are over a barrel, it is only because County Executive Kevin Kamenetz and his cohorts on the County Council recklessly placed themselves in that position, and remain there by their own choice.

The tale of Towson Row is the story of all that is wrong with the development policy of the Kamenetz administration. Like the Towson Station saga, one thing comes through loud and clear when you look back at the history of the project, in my opinion: The primary focus of the Kamenetz administration is on helping the developers succeed, rather than on protecting the interests of the County and its taxpayers.

Soon after Caves Valley Partners unveiled its plans for the Towson Row project in 2013, the County began falling all over itself to clear the path for the development. Pamela Wood of the Sun recounted the history in an article last week.

One issue that Ms. Wood did not mention is the continuing questions surrounding construction of the so-called Towson relief sewer, a $1,262,626 project intended to increase sewerage capacity to accommodate the growth of Towson University and the future development of Towson Row. One of those questions is whether the developers of Towson Row will be expected to pay anything toward the construction of sewerage adequate to serve the development.

State Senator Jim Brochin, who represents the senatorial district in which Towson Row is located, estimated a year ago that the County had spent between $30 to $40 million on infrastructure to support development of Towson Row. The County already is in deep. The question becomes whether the County should dive in any deeper.

There is more invested in Towson Row than the County’s money. There is the political capital that has been invested by Mr. Kamenetz in securing the zoning concessions and taking other actions to promote the development. His reputation is at stake.

Mr. Kamenetz has touted Towson Row as a transformative project, the key to an initiative that he called “It’s Towson’s Time.” In October 2015, the following appeared on the County’s “Baltimore County News” website:

“Towson Row will transform the Towson skyline and become a focal point for residents, workers and visitors,” said Baltimore County Executive Kevin Kamenetz. “You can clearly see Towson Row’s footprint as you walk through downtown Towson. It’s exciting to see so much site activity [sic] as this significant private investment moves forward.”

“Towson Row will reaffirm Towson as a preeminent destination in Maryland, now and well into the future,” said Arthur Adler, partner of Caves Valley Partners. “We are completely reimagining the shopping, working, dining, entertainment, and green streetscape experience for Towson residents and visitors.”

The County Council could deny approval of the grant funding. That would send the developers back to the drawing boards to design a project that they could build without additional County financing. A redesign of that magnitude would produce a far less grandiose development than promised by Mr. Kamenetz, and could push the beginning of the construction beyond 2018 – outcomes unacceptable to Mr. Kamenetz.

An interesting confrontation looms. Councilman David Marks, who represents the Towson area and is in much the same political position as Mr. Kamenetz in terms of needing to get construction started on Towson Row, appears to be leaning toward approving the grants. Council Chairman Tom Quirk and Councilman Julian Jones, Jr., who almost always vote that way that Mr. Kamenetz wants them to vote, have already stated that they support the funding. (If they are your councilmen, feel free to ask them if they have even read the agreements.) The County Executive only needs one more vote.

The County Council does not allow public testimony at its evening legislative sessions. The County Council only allows public testimony at its work sessions, and schedules the work sessions during the middle of the day, when it is least convenient for most people to attend. Nevertheless, today’s work session is likely to be much more lively than usual because of the strong public opposition to the County financing of the controversial Towson Row project.

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It is a story for another day, but Baltimore County has become a developer’s paradise, with developers enjoying favored treatment by the County. An example of that favored treatment is the absence of development impact fees or development excise taxes. (There are legal differences between the two, but they serve the same purpose.)

There is a shabbiness to the public infrastructure in Baltimore County that you do not see in its neighbors to the west and south, Howard County and Anne Arundel County. Some of that has to do with the relative affluence of the three counties. The main reason, however, is that Baltimore County, alone among all metropolitan counties in the state, does not collect development impact fees or excise taxes.

Impact fees or development excise taxes are imposed on the builders of new residential and commercial structures to offset the costs of expanding facilities such as streets and roads, water supply and sewerage, libraries, fire and police stations, schools, etc. to accommodate the new structures. If a county doesn’t collect impact fees or development excise taxes from builders, the costs of expanding facilities to accommodate the new development fall on existing property owners.

That is what happens in Baltimore County. If the streets in your community are crumbling and public buildings (like schools) in poor condition, it is primarily because property and income tax revenues are being siphoned away to pay for the expansions in infrastructure needed to support new developments like Towson Row.

Let’s put this in perspective. Anne Arundel and Howard Counties have a combined population of about 877,600. Baltimore County has a population of about 831,000. In fiscal year 2017, Anne Arundel and Howard County collected a total of about $29.7 million in impact fees (Anne Arundel County) and development excise taxes (Howard County). That’s $29.7 million in property and income tax revenue that they didn’t have to spend to expand the capacity of infrastructure to support new development, and that therefore could be used to do things like repair and replace existing roads, schools, and other infrastructure.

The county closest in population to Baltimore County is Prince George’s County, with a population of about 909,500. Prince George’s County collected about $32.2 million in impact fees in fiscal year 2017. If you are from communities like Catonsville, Dundalk, Pikesville, or Towson, take a trip to Prince George’s County and tell me which county does a better job of keeping its streets and other governmental facilities in repair.

I bring up impact fees and development excise taxes only because it is worth considering that the builders of Towson Row will not pay them, despite the enormous impact that the development will have on public facilities, including streets and roads. Guess who will pay for expanding the capacity of those facilities to accommodate Towson Row? That’s right, the same people paying for the grants.

My email to the Council.

Members of the County Council:

I will spare you my opinion on the wisdom and propriety of the proposal to award grants totaling $43,016,785 to the developers of Towson Row. I will, however, make some suggestions, comments and questions based on my reading of the Community Funding Agreement and the Development Agreement.

What is the legal authority for the grants?

The County Council should insist that the County Attorney, preferably in a formal legal opinion, confirm that the County Council has the legal authority to approve the expenditure of County funds for the grants contemplated by the “County Funding Agreement.” Although the agreement describes them as “tax credit advances” and “hotel tax advances,” that language is nothing more than window dressing, in my opinion. The only relationship to tax credits and hotel taxes is that the amount of the grants is, for no reason that I can ascertain, determined by the projected amounts of certain tax credits and hotel tax payments, and the developers would forego claiming certain tax credits to which they would be entitled.

The disbursements of County funds scheduled under the agreement are grants, pure and simple. The recipient of the grants under the agreement is identified as TR Development Corporation.

The Baltimore County Council has no inherent power to make grants to private for-profit businesses on an ad hoc basis; grants of public money for private purposes must be explicitly authorized by state statutes or county ordinances. The Baltimore County Code does have provisions for economic development grants set forth in Title 10 of Article 10, which establishes the Economic Development Revolving Financing Fund.

County law specifies a process for applying for an economic development grant or loan, and requires an application conforming to the requirements of § 10-10-105 of the County Code. Was that process followed? If not, under what legal authority are these grants being made to TR Development Corporation?

There were two red flags in the agreement that caught my attention. The first is that the authority for the funding is not included in the Recitals, as customarily is done, at least in my experience. The second is that the agreement includes representations by TR Development Corporation that it has the full power and authority to enter into the agreement, and that the agreement is valid and does not violate any of the corporation’s organizational documents. The agreement contains no parallel representations on the part of the County.

In my opinion, the omissions are odd, but may not signify anything other than casual draftsmanship. In context, however, they support my opinion that the legality of the County Council’s action in approving the grants must be confirmed.

Why is confirmation important? There is widespread and vehement opposition to the proposed grants. Unless the County Attorney can render a persuasive opinion that there is sound legal authority for the grants – and that the required process for approving such grants was followed – a taxpayer’s suit challenging the grants is almost inevitable. A successful suit would all but guarantee that Towson Row remains nothing more than a hole in the ground for the foreseeable future.

Conversion of the sale of County-owned property into a gift.

There is another provision of the County Funding Agreement that is, well, innovative. In effect, it converts the sale of three County-owned parcels to the developers of Towson Row into what is tantamount to a gift.

The County previously has contracted to sell three County-owned parcels within the development site to the developers for a total purchase price of $2,335,825. Under the agreement, that amount will be “reinvested” by the County in the Towson Row project upon receipt.

The “reinvestment” clause provides that the money realized from the sale of the properties will be applied to the first scheduled “tax credit advance” under the agreement. Once so applied, the “income” from the sale will reduce the total amount of the tax advances to which the County is obligated to disburse to the developers in the form of grants by the amount of the sales price of $2,335,825. In other words, it will reduce the total amount of the grants from $43,016,785 to $40,680,960.

The effect is that the County realizes no money from the sale of the properties; it simply gets a reduction in the total amount of the grant funds that the County has voluntarily obligated itself to award to the developers! As I said, I give credit to the drafter of the agreement for being creative, although I am uncertain of the benefit to the County.

In my experience, it is one of those provisions that you see in a proposed contract to which your first reaction is “you have to be kidding.” The County Council should at least be aware that the agreement foregoes the $2,335,825 in revenue anticipated from the sale of the three properties, and converts it into a “grant” (or gift) to the developers.

Why isn’t Towson Row Statutory Trust a party to the County Funding Agreement, and what protections are afforded to the County under the County Funding Agreement if TR Development Corporation goes bankrupt?

The agreements before the County Council for approval include the County Funding Agreement referenced above, and a Development Agreement. Kudos to Pamela Wood of the Baltimore Sun for obtaining copies of the documents and posting them online.

The parties to the County Funding Agreement are the County and TR Development Corporation, which is named in the agreement as the “Recipient.” The agreement is signed on behalf of the Recipient by Arthur Adler, identified as the president of TR Development Corporation.

The County Funding Agreement also imposes obligations on the “Developer,” identified as Towson Row Statutory Trust. Towson Row Statutory Trust is not a party to the agreement. Mr. Adler, however, also signed the agreement on behalf of Towson Row Statutory Trust as an “authorized person,” under the following statement: “Towson Row Statutory Trust executes this Agreement to acknowledge its consent to the obligations of the Developer contained herein.”

The parties to the Development Agreement are the County and the Towson Row Statutory Trust. Towson Row Statutory Trust is identified as the owner or contract purchaser of the parcels of land to be developed as Towson Row. The agreement is signed on behalf of the Towson Row Statutory Trust by Mr. Adler as an “authorized person.” Mr. Adler is a partner with Caves Valley Partners. Neither agreement is signed by a representative of Greenberg Gibbons Commercial Corporation, which became a “co-developer” of Towson Row in May.

The almost universal rule-of-thumb is that persons or entities intended to be bound by the terms and conditions of a contract are made parties to the contract, with their respective rights and obligations set forth in the contract. Why isn’t Towson Row Statutory Trust a party to the County Funding Agreement?

The County Council also should ascertain what if any protections are afforded to the County under the County Funding Agreement if TR Development Corporation goes bankrupt. In other words, what status would the future property and hotel tax revenues anticipated to “repay” the County for the tax credit and hotel tax advances have under such a bankruptcy filing?

Exactly whose interests are being protected by these grants?

According to news accounts, Greenberg Gibbons Commercial Corporation announced in May that it formed a joint venture with Caves Valley Partners to be a “co-developer” of Towson Row, and that it would bring additional investors to the project. Caves Valley Partners reportedly faltered when the costs of removing rock from the proposed site of a parking garage were greater than expected, and the project stalled.

Whose investment in Towson Row is at risk if this project doesn’t get the grants, or doesn’t go forward for some other reason? Or if the project fails for some reason, such as changing market or economic conditions? One would suspect that Greenberg Gibbons protected itself and its investors as much as possible in return for coming aboard. I believe that the public has the right to know whose financial interests are being protected by these grants, especially in light of the controversy around the size of the campaign contributions  made by Caves Valley Partners.

Where is the Fiscal Note from the County Auditor?

As of this afternoon, it still had not been posted. A proposal to award $43M in grants with no Fiscal Note? In an ideal world – and nothing about Baltimore County government resembles an ideal world – that Fiscal Note should have been posted at least 7-10 days ago so that people attending the work session tomorrow could read it for purposes of preparing their testimony. (Not to mention that members of the Council might want to ask knowledgeable questions about it at the work session.)

Does the analysis from Sage Policy Group state that the infusion of $43 million in County funds is necessary to make the project work?

If the entire report has been made available, I can’t find it. I have read statements attributed to the Kamenetz administration that the report concludes that the $43 million in grants are “justified” by the ultimate benefits in revenue, jobs, etc. Even assuming that is correct, it answers the wrong question. Does the report also state that the $43 million in grants are necessary to make the project work? Was Sage even asked to address that question?

If not, on whose word is the County Council relying that there is a need for these grants? I point out that, under Section 10-10-105(c) of the County Code, an application for assistance from the Economic Development Revolving Financing Fund is evaluated on the basis of “need” and the “financial ability of the applicant,” among other factors. $43 million is a whole lot of money to be ponied up without some independent professional determination that, considering the financial resources of the applicants, the applicants need this money to make the project work.

I understand that this proposal was presented by the County Executive to the County Council on Dec 4th. Mr. Kamenetz must have remarkable faith in the acumen of the members of the County Council to believe that they will be ready to approve such an extraordinary undertaking by December 18th.

Good luck, and thank you for considering my suggestion, comments and questions.

David A. Plymyer
Catonsville