It is time for the Office of the State Prosecutor to investigate the Towson Station project to determine if one or more officials in the administration of Baltimore County Executive Kevin Kamenetz have committed misconduct in office or other crimes in the way in which the project has been handled. Towson Station, formerly known as Towson Gateway, is the name given to the Planned Unit Development (PUD) that a private developer, Caves Valley, proposes to build on approximately 5.8 acres of land currently owned by the County at the intersection of York Road and Bosley Avenue in Towson.

Under County law, the County administration has a duty to review and approve a PUD in accordance with an objective and arm’s-length process intended to protect the due process rights of nearby property owners who may object to the PUD. There is reason to believe that the County administration may have violated that duty, and other State and County laws, during the review process. Some of the possible violations may be criminal.

At this point, I accuse no one of criminal wrongdoing. If, however, I smelled the odor of something burning coming from the Old Courthouse in Towson, the seat of County government, I’d call the Fire Department. Considering the nature of the odor arising from the facts and circumstances described below, my call goes to the State Prosecutor.

Background.

In 2012, the administration of County Executive Kevin Kamenetz decided that it wanted to sell approximately 5.8 acres of County-owned land at the corner of York Road and Bosley Avenue in Towson on which a fire station was 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.

The process designed to identify a buyer for the fire station property was marked by its secrecy. 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, but the panel included no representatives of those communities. Mr. Kamenetz stated that concerns about “confidentiality” prevented the inclusion of citizens on the panel. In my opinion, that was a bogus reason for categorically excluding citizens, and was a warning sign of problems to come.

The outcome of the process was as inexplicable as the process itself. The panel initially recommended that the County select a proposal submitted by developer Mark Sapperstein. The Sapperstein proposal later was disqualified by County purchasing officials for reasons that both Towson residents and the Baltimore Post found questionable.

The County then turned to a proposal submitted by Caves Valley Partners, which included a purchase price of $8.3 million. At its meeting on December 3, 2013, the County Council approved the contract of sale for the property to Caves Valley (dba CVP-TF, LLC) over the strenuous objections of most of the community organizations in Towson. The objections were directed at Caves Valley’s proposal to use the site to build a gas station and convenience store, uses not permitted under the zoning of the property. The community had been thrown a curve ball.

The flawed structure of the contract of sale between the County and Caves Valley for the property.

Even more troublesome than the secrecy of the selection process, the disqualification of the Sapperstein proposal, and the selection of a proposal inconsistent with the zoning of the property was the way that the County structured the deal with Caves Valley. 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. 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 conflict, an issue that I discussed in my first post on this project. 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 doesn’t realize the $8.3 million from the sale unless it approves the PUD and transfers the property to Caves Valley.

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.

The County never should have structured the contract of sale in a manner that fatally compromised the integrity of its regulatory role. It was a mistake that sowed the seeds of the scandal that some people in Baltimore County refer to as Tree-gate, and was another warning sign that something was amiss.

The alleged threats against Councilman David Marks.

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?

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 a report posted on September 29, 2016 that he heard from many constituents who do not want the gas station, but he said he also 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 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.”

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 recent story in the Baltimore Post.  Ann Constantino of the Post reported allegations that a threat by Mr. Kamenetz to punish Mr. Marks’ 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 three independent sources confirmed Mr. Marks’ account. According to Ms. Constantino, neither Mr. Kamenetz nor Mr. Sibel responded to her request for comments. A grand jury taking testimony under oath should be able to sort out who is lying, and who is not.

The County Council performs a key administrative function as part of the regulatory process for approving an application for a PUD. The PUD does not go forward unless the Council makes the necessary findings of fact and gives the PUD preliminary approval.

If Mr. Kamenetz put his thumb on the scale at the front end of the process, 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. Whether he realizes it or not, Mr. Marks has made very serious allegations against the County Executive that, standing alone, would 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.  The resolution placed a condition on the approval of the PUD discussed below.

The removal of the trees.

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. The consultant claimed that retention of the six specimen trees was incompatible with the proposed design of the project. Specimen trees generally are larger and more mature trees, and merit special protection under State and local forest conservation laws.

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

On April 1, 2017 (a Saturday), 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.  Needless to say, there was a public uproar, and about 50 protesters picketed the site a few days later.

There was no notice given of the tree removal either to the County Council or the public. County Attorney Michael Field told Ann Constantino of the Post that it was County Administrative Officer Fred Homan who ordered the trees removed.

On April 3, 2017, Mr. Homan was at a 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 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.”

By that statement, 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. 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 dollars 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.”

The only rational inference from Mr. Homan’s explanation is that he was trying to speed the process along by “simplifying” the Forest Stand Delineation and Forest Conservation Plan for the PUD that Caves Valley were required to submit. Review by the County’s Department of Environmental Protection and Sustainability (DEPS) of a Forest Conservation Plan submitted by a developer is the regulatory process required by the State Forest Conservation Act as the means to determine which trees must stay and which may go as part of any site design.

DEPS has a legal duty to make sure that the Forest Conservation Plan submitted by Caves Valley represents Caves Valley’s best efforts to harmonize its site plan with the protection of mature trees mandated by the County and with State and County forest conservation laws. In one high-handed action, Mr. Homan appears to have defied both the will of the County Council and State regulatory requirements.

The use of County funds to cut down the trees.

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 exact amount of County money expended to remove the 30 trees cannot be determined from the documents that have been made available by the County, although an estimate appears to put the amount around $24,500.

No expenditure of County funds, however, was justified because the contract of sale calls 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, 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 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.

Non-compliance with State and County forest conservation laws.

My allegations that the County violated State and County forest conservation laws when it removed the trees are described in a complaint that I filed with the Maryland Department of Natural Resources (DNR). That complaint is now under investigation. A copy is appended below.

I won’t repeat the details of the complaint here. Suffice it to say that I believe that, for purposes of forest conservation laws, the County administration in effect acted as an arm of the prospective developer, Caves Valley, in removing the trees from the development site.

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.

In summary, it appears that Mr. Homan used County funds appropriated for something else to have the trees removed from the County-owned property for the sole purpose of preparing the site for development by the contract purchaser, Caves Valley. In doing so, he rendered impossible the performance of a condition placed by his own County Council on the Towson Station PUD, and short-circuited the legally-mandated process for approving a Forest Conservation Plan for the development. Depending on the determination by DNR, he may also have violated State and County forest conservation laws along the way. Standing alone, these circumstances would merit investigation by the State Prosecutor.

I find it hard to believe that Mr. Homan’s immediate purpose in removing the trees was to “accelerate” the closing of the sale of the property, as he indicated during his testimony before the County Council on April 3, 2017. The reason that I find it hard to believe is because of something that occurred three-and-a-half months after he gave that testimony, and was hidden from public view.

The secret extension of the contract of sale.

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. The body of the contract provides that, if settlement does not take place on or before the Closing Date, the contract is terminated.

In April, Mr. Homan stated that he was in a big hurry to get to settlement, but in July he delayed it by up to five years? That requires an explanation and, so far, there has been none.

The extension was secreted from both the County Council and the public. It also was secreted from the Greater Towson Council of Community Associations (GTCCA) when Mr. Kamenetz asked the group on August 11, 2017 to negotiate with Caves Valley over a possible substitute development plan that did not include a gas station. The extension only came to light when it was discovered in a file reviewed by Ann Constantino of the Post under a Public Information Act request.

The extension takes all time pressure off Caves Valley to complete the deal. It also put Caves Valley in the catbird seat in its negotiations with the GTCCA. When Mr. Kamenetz announced that he wanted the GTCCA and Caves Valley to sit down and talk, he gave them 30 days to come up with a compromise. Thirty days seemed like a reasonable deadline if settlement had to occur by December 31, 2018.

Caves Valley knew, however, that the 30 days was a phony deadline; the GTCCA did not.  I don’t know how the failure by the County Executive to inform GTCCA of a material change to a key provision of the contract of sale can be described as anything but bad faith.

Caves Valley is now in the position that, if it can’t get an acceptable compromise with the GTCCA, it can simply sit on the deal for the next several years. The extension functions as a safety valve for Caves Valley. Caves Valley may even choose to wait to close on the sale until the Council does the next comprehensive rezoning of the Towson area, and hope that it can use its political muscle to persuade the Council to rezone the property to allow more intense uses such as gas stations as a matter of right.

If the contract of sale had expired on December 31, 2018, 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 obligation to Caves Valley. There is sentiment among the opponents of Towson Station that most responsible recourse for the County, fiscally, legally and in terms of the nature of the development, would be to start over. That option has largely been foreclosed by the extension.

Now the next Executive and Council are pretty much stuck dealing with Caves Valley. If that was the intent of the extension, it again raises the question of whose interests are being represented by the Kamenetz administration.

The GTCCA now also is stuck dealing with Caves Valley in trying to work out some sort of compromise. My guess is that County Executive Kevin Kamenetz wants this controversy to go away as quickly as possible because he hopes that an “amicable” resolution of Caves Valley’s development plan will end the scrutiny of the controversy.

I predict that to achieve that goal he will encourage Caves Valley and the GTCCA to agree to a substitute development plan that does not include a gas station, in return for which Mr. Kamenetz will agree to a substantial reduction in the purchase price for the property. In other words, the taxpayers will take the financial hit necessary to provide political cover for the County Executive. In my opinion, increasing the pressure on GTCCA to reach a compromise with Caves Valley was one of the primary reasons for the extension.

Five years is an extraordinarily long period of time for any contract of sale for real property of this nature to be extended in one fell swoop. That is especially true in this case, considering that the contract provides that “time is of the essence” for performance, and Mr. Homan’s claim that the County wanted to “accelerate” the Closing Date because it needed the money.

Why would the County agree to such a lengthy, unqualified extension? Nothing in the contract provides 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. Nor is 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. Will the value be the same in 2023?

The language of the contract itself leaves 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, such as deadlines for submitting the various documents required during development review, that would allow termination of the contract before December 31, 2023 if it appears that Caves Valley no longer is diligently pursuing approval of the PUD.

The only risk to Caves Valley if it fails to go to settlement on or before December 31, 2023 is the loss of the “earnest money” that it deposited in 2013: $83,000, a paltry one percent of the purchase price. Until Mr. Kamenetz gives a full and plausible explanation of why the five-year extension was in the best interests of the County, a very dark cloud hangs over the Old Courthouse.

If the evidence gathered by the State Prosecutor shows that the Kamenetz administration had its thumb on the scale during the regulatory process attendant to review of the Towson Station PUD, that it violated State and County laws in removing trees to facilitate development of the site of the PUD by Caves Valley, and that it extended the Closing Date in the contract for reasons primarily benefiting Caves Valley, what would have been the motive? That’s next.

The Caves Valley connection.

County Executive Kevin Kamenetz has a longstanding and well-documented political relationship with the Caves Valley partners and their representatives and affiliates. Mr. Kamenetz was involved in a relatively minor ethical dust-up involving Caves Valley and Mr. Sibel (and other developers) in 2012. It is the amount of money lavished by Caves Valley on campaign contributions to Mr. Kamenetz and other elected officials in the County, however, that is eye-popping.

According to another story written by Ann Constantino of the Post, Caves Valley, and entities and persons that the Post found to be associated with Caves Valley, contributed a total of approximately $84,600 to Mr. Kamenetz and all seven members of the County Council between 2010 and 2017; $42,000 was contributed to Mr. Kamenetz alone. Of the $84,600 total, $44,500 was contributed between 2013, when the Council approved the sale to Caves Valley, and 2017.

The Post reported that another $20,000 was contributed to “A Better Baltimore County,” all between 2013 and 2017. “A Better Baltimore Slate” is a “slate fund” under the control of Mr. Kamenetz that he uses to support the campaigns of political allies, and to oppose the campaigns of political opponents.

In 2014, Allison Knezevich of the Baltimore Sun reported that “A Better Baltimore County” was funded by Mr. Kamenetz and seven other donors, all of whom had ties to Caves Valley. She reported that Mr. Kamenetz transferred $100,000 from his own campaign account into the slate fund, and the other seven donors contributed $23,000.

Ms. Knezevich noted that, at the time of the contributions, Caves Valley was awaiting County approvals to proceed with major development projects. She also pointed out that in 2013 the Council approved a no-bid lease for Caves Valley to rent a former government office building on Washington Avenue to be redeveloped as part of a large Caves Valley project called Towson Row.

The no-bid lease was criticized not only by a real  estate company that had offered to purchase the building, but also by Councilwoman Vicki Almond, who said the deal wasn’t “transparent.”  As if anything that the Baltimore County government ever does is transparent.

Jennifer Bevan-Dangel, executive director of Common Cause Maryland, had this to say to the Sun in 2014 about the contributions to “A Better Baltimore County”:

“The voters need to sit up and pay attention. Certainly, if the developers and the county executive are working so very closely … they have an agenda, and the voters have to decide whether that’s the agenda they want to see or not.”

In declining to comment about the slate fund or Caves Valley’s contributions to it, Mr. Kamenetz displayed his customary patience and candor:

“I’m really not going to discuss campaign strategy with a reporter,” he told Ms. Knezevich in 2014. The point was not, of course, about campaign strategy, it was about the potential for undue influence by a developer on the political and regulatory processes of the County.

There is nothing unlawful in Maryland about the use of campaign contributions by developers and other special interests to gain influence with (euphemistically called “access to”) elected officials. The issue is whether those elected officials bend or even break the rules because of that influence. It is the issue at the heart of the Towson Station controversy.

There is no doubt about the extraordinary influence of the development community (developers and their lawyers) in Baltimore County. State Senator Jim Brochin of Baltimore County, a candidate for County Executive in 2018, has referred to the “pay-to-play” culture in Baltimore County government. I refer to it as the “culture of soft corruption.” Take your pick.

A prickly exchange between Mr. Brochin and Councilman David Marks relevant to the Towson Station matter captured by the Towson Flyer illustrates the sordid, developer-dominated culture of the County government. Mr. Brochin represents the senatorial district in which the proposed development was located.  He described the Royal Farms project as “an abomination” and urged Mr. Marks not to introduce the PUD despite any threats that he had received from the County Executive to withhold funds from Mr. Marks’ district, as described above.

“David needs to stop being the Cowardly Lion and develop some courage and do the right thing. That’s what the job is about,” Brochin said. “It’s insane that anyone could support this [project] unless they’ve been influenced by campaign contributions.”

Mr. Marks told the Flyer that, as a county councilman, “I’m the one who has to deliver funding for important local projects. Sen. Brochin can take the popular position every time, with few repercussions. And with all due respect to the Senator’s insults, maybe he was in the Land of Oz when I was taking on developers and the Kamenetz administration during the last rezoning cycle.”

Four days after the above exchange was reported in the Flyer, Mr. Marks introduced the resolution giving the Council’s approval to the Towson Station PUD. Did Mr. Marks introduce the resolution because he believed the findings recited in the resolution that the PUD “will achieve a development of substantially higher quality than a conventional development would achieve,” or did he do it because of a threat from the County Executive to punish his constituents by withholding funding for important projects? The citizens of Baltimore County deserve an answer to that and many other questions about the Towson Station project.

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The Towson Station fiasco reeks of scandal.  The cumulative weight of the facts and circumstances is overwhelming:

The secrecy of the process used to select the buyer; the questions surrounding the disqualification of the Sapperstein proposal; the selection of a proposed development not permitted by the zoning of property and vehemently opposed by the community; the allegations of threats by the County Executive against a county councilman relayed by a Caves Valley partner; the willingness of the County to structure a deal with Caves Valley that placed its regulatory role in conflict with its pecuniary interests; the removal of 30 trees by the Kamenetz administration in defiance of a County Council resolution to relieve Caves Valley of the “burden” of accommodating its site plan and construction activity to the retention of the trees by using money appropriated for some other purpose; and, finally, a secret, five-year extension of the closing date in the contract of sale that primarily benefits Caves Valley, not the County, and that belied the statement by the County Administrative Officer several months earlier that the County wanted to “accelerate” the sale of the property in order to realize the income from the sale.

If these facts and circumstances do not attract the attention of the State Prosecutor, I am not sure what would.

November 19, 2017