$17 million jury verdict paves way for major development on Columbia’s lakefront

The Texas-based developer that owns much of downtown Columbia has been ordered to pay nearly $17 million to a local construction company for blocking its plans to redevelop Columbia’s lakefront.

The local company, IMH Columbia LLC, an entity of Columbia-based Costello Construction, sued the Howard Hughes Corp. in 2022 and won a jury verdict n Howard County Circuit Court this month. The local company is now one step closer to building offices, housing, parking, and an indoor tennis and pickleball court on the shores of Lake Kittamaqundi.

Nicole Campbell, an attorney with Columbia-based Huddles Jones Sorteberg & Campbell, P.C., who represented IMH, said she thinks the verdict it is great for the future of downtown Columbia.

“I’m looking forward to it being built, and I think everybody in downtown Columbia should be,” Campbell said.

The property in dispute has been dubbed Lakefront North, where 1970s-era lodge-style buildings now stand. The series of long and small hotel rooms were originally part of the Cross Keys Inn, Campbell said. The tower portion of the hotel became a Sheraton in the 1990s.

David Costello, president of Costello Construction, had an office next to the Sheraton, and he said he was tired of seeing it falling apart. He bought the property in 2017.

Costello’s company had a two-phase plan to develop the property: renovate and add an addition to the Sheraton, which was completed as a Marriott Autograph hotel in the fall of 2021. Phase two was to replace the lodges with an office building, a residential building, an indoor tennis and pickleball court and parking.

To do that, the company needed a long list of approvals, including from an architectural review committee controlled by Howard Hughes.

When the lodges were built, land covenants were placed on the property that restricted residential uses and onsite parking, Campbell said. Written into the covenants is that the Howard Research and Development Corp., now an entity of Howard Hughes, has the authority to approve or reject any changes of use in the property for 15 years, but that expired in 1986, according to land records. After that, it’s up to the committee.

“Then you fast forward two years to December of 2019 and they [Howard Hughes] sent a letter that said, ‘We reject your plans in their entirety and we can put in our sole and absolute discretion,’ ” Costello said.

But the jury found the covenants that restricted residential uses and onsite parking were obsolete because the county changed the concept of what it wanted for downtown Columbia to include residential buildings. There were residential buildings on the lakefront by 2005.

“The remaining land in the Lakefront Core may be revitalized with new development that could include cultural, retail, restaurant, office, residential and hospitality uses adjacent to the amenity area that will help bring people to this part of Downtown Columbia and activate the Lake,” according to the 2010 Downtown Columbia Plan.

The jury also found that Howard Hughes breached the covenants “by acting in its ‘sole and absolute discretion’ in rejecting IMH’s redevelopment project in its December 9, 2019 letter,” according to the verdict sheet obtained by The Banner.

Howard Hughes plans to appeal the decision.

“We respectfully disagree with the decision, and we will take the next steps to pursue an appeal,” according to a statement from Howard Hughes. “Downtown Columbia is thriving, and we remain dedicated to the continued vibrancy of Downtown and committed to working with the community to realize the long-promised vision for the lakefront.”

Howard Hughes has also been embroiled in a conflict over another proposed development: a public lakefront library. Residents have complained about a lack of transparency in the plans, which selected Howard Hughes as the developer without competitive bidding. The company owns the site first proposed for the library.

Costello said he’ll pick up the approval process where he left off in a few weeks.

In addition to approvals from the architectural review committee, Costello’s company will have to get clearance from the county’s Department of Planning and Zoning in a process outlined in the Downtown Columbia plan, Campbell said.

“There was an argument that these covenants were needed in order to protect downtown Columbia, and that’s just not the case,” she said.

Costello’s plans reflect what the county wants as articulated from the Downtown Columbia Plan, Campbell said. “Lakefront North, it’s beautiful, and it needs to be brought up to 2024 standards, and this will do that.”

Abby Zimmardi

abby.zimmardi@thebaltimorebanner.com

Abby Zimmardi is a reporter covering Howard County for The Baltimore Banner. Zimmardi earned her master’s degree from the University of Maryland’s Philip Merrill College of Journalism in December 2022.

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