120 West Fayette Street, LLLP v. Mayor and City Council of Baltimore

Court of Appeals of Maryland, No. 81/11, April 27, 2012: Taxpayer/adjoining landowner group denied standing to contest demolition of historic buildings under redevelopment plan approval in 4-3 split decision.

In connection with a land use project to redevelop the Baltimore City Market Center Urban Renewal Area commonly known as the “Superblock”, the Maryland legislature approved a $1 million appropriation conditioning on “the City of Baltimore and the Maryland Historic Trust… reach[ing] an agreement on how to minimize the demolition of structures which contribute to the Market Center National Register Historic District.” The need for that agreement resulted in a Memorandum of Understanding (MOA) between the City of Baltimore and the Maryland Historical Trust (“MHT” or “the Trust”). The MOA requires the City to submit Superblock redevelopment plans to the Trust for approval.

Rodney Little, who serves as both the State Historic Preservation Officer (SHPO) and executive director of the Trust, approved a redevelopment plan in December 2010.  According to the dissenting opinion in this case, Little acted without the authorization of the Trust.  (In oral argument counsel for the City alleged that Little was acting as the Trust’s agent notwithstanding the absence of a vote by the Trust to approve the plan.) In January 2011, the Trust learned of this approval and voted to ask Little to rescind it.  The Trust informed the City of its “serious reservations” about the plan, but took no legal action to challenge the approval. (In oral argument it was stated that the Trust received an opinion of the state Attorney General that it could not hire its own counsel to pursue this matter independently of the AG’s office.) At issue in this case was whether a taxpayer group, 120 West Fayette, LLLP (“120 West Fayette”), had standing to challenge the plan approval by Little as violating the MOA.

Of relevance to the proceedings, 120 West Fayette had previously brought legal actions to challenge the Superblock project. In the first action (“Superblock I”; 120 West Fayette Street, LLLP v. Mayor of Baltimore, 407 Md. 253, 964 A.2d 662 (2009)) the Court held that 120 West Fayette had standing to challenge the legality of the City’s entry into a Land Disposition Agreement (LDA) to sell to property in the Superblock to a private developer. In the second action (“Superblock II”; 120 West Fayette Street, LLLP v. Mayor of Baltimore, 413 Md. 309, 992 A.2d 459 (2010)) 120 West Fayette alleged that the approval by the Trust “in the immediate future” of the LDA would be unlawful because the LDA contained design plans that conflicted with the Urban Renewal Plan’s building height restrictions. The Court held that allegation to be not “sufficiently ripe to rise to the level of a justifiable controversy”.

The Court, in a majority opinion, held that 120 West Fayette lacked standing to file a suit for declaratory judgment that interprets and enforces the MOA. The Court analyzed this case strictly as a question of third-party beneficiary to a contract. It found that 120 West Fayette had no part in the MOA, and was at best an incidental beneficiary to it. In Superblock I, the Court recognized 120 West’s standing because the controversy involved a “land use decision” and 120 West Fayette was an adjoining property owner challenging “illegal avoidance of urban renewal and procurement ordinances.” In the case at hand, the Court found that the approval under the MOA was not a “land use decision”.  The majority wrote, “The MOA is not … a ‘land use decision’—with attendant principles extending standing to nearby aggrieved landowners. Generally defined, a land use decision is a decision (typically an ordinance or regulation) enacted or promulgated by a legislative or administrative body for the purpose of directing the development of real estate… the MOA does not direct the use or development of real estate in the Superblock.”

The dissenting opinion viewed 120 West’s complain primarily as “a valid taxpayer challenge to the unlawful approval by the City and State” and the issue of standing in this case as “not materially distinguishable from Superblock I”.

The Chief Judge, writing the dissent, argued that the Trust is “an instrumentality of the State…a body corporate,” that is “charitable and… intended to benefit the residents of the State”, and that its actions under the MOA, to be executed by due authorization of the Trust’s board, “are land use decisions of an administrative body and State unit”.  Reviewing the evidence under the procedural standard applicable to this complaint, the dissent found that Little, the executive director of the Trust, acted without due authority. “The Director, as mandated by the State and Finance Procurement Article of the Maryland Code, is not authorized to make decisions single-handedly about the destruction of historic properties”.  Accordingly, the dissent viewed 120 West Fayette’s complaint as based on a set of specific State statutes and administrative law, not merely on contract law, and “therefore the appellant has properly asserted its standing as a taxpayer.”

Decision is available at http://mdcourts.gov/opinions/coa/2012/81a11.pdf.

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