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 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.
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