Nearly two decades into an agreement with the city of Baltimore that was supposed to spur the transformation of a long-neglected West Baltimore neighborhood, a New York developer still does not have the financing to move forward — missing a key deadline this week.
La Cité signed its deal during the mayoral administration of Martin O’Malley in 2006 to redevelop Poppleton, a predominantly Black neighborhood a few minutes from downtown. Since then, the city has spent more than $15 million to displace and relocate residents, acquire hundreds of properties, and demolish homes and businesses. City, state and federal agencies have provided tens of millions of dollars in financing to La Cité.
Yet the company, which has the exclusive development rights over those blocks, has only built a single apartment complex made up of two buildings. The neighborhood is marked by entire blocks of empty land.
Even as the developer has promised to move ahead with its next building, an age-restricted apartment complex for older adults, it missed a contractually required deadline on Monday to provide evidence of financing for the seven-story, 165-unit building. In other words, the developer had to prove it had the money to build it.
It didn’t.
The developer contacted the city Department of Housing and Community Development last week asking for a “significant extension,” Housing Commissioner Alice Kennedy said in a statement, calling it “disappointing.”
That’s not good enough for Sonia Eaddy, a longtime resident and the president her neighborhood association, Poppleton Now, and the coalition of West Baltimore neighborhoods called the Southwest Partnership.
The development deal with La Cité is “hold[ing] the neighborhood hostage,” Eaddy said.
The blown deadline is an opportunity for the city to stand up for its residents and cancel the deal, Eaddy said. At the very least, she said the city could negotiate to remove some of Poppleton’s vacant land from the agreement with La Cité ― and turn it over to another developer.
That makes sense to Tom Prevas, a lawyer and former member of the city’s planning commission.
For years, Prevas had a front-row seat to the development process in Baltimore, including La Cité’s proposals in Poppleton. It has become increasingly clear that this developer lacks the capacity to finish the project, he said.
“The city should use every tool in the toolbelt to force him to deliver on the promises he made two decades ago,” Prevas said, referring to La Cité’s president, Dan Bythewood.
A spokeswoman for La Citè said it has not defaulted on its contract, claiming the city needs to finalize a tax incentive package first.
Bythewood approached the city in the early 2000s with a plan to radically overhaul a large swath of Poppleton, a neighborhood that the city had long slated for redevelopment.
His newly formed firm, La Cité, had no experience with large-scale, multiphase neighborhood development, but in 2006 the city signed a deal that gave his company the exclusive development rights to more than 500 properties — or nearly 14 acres — in Poppleton. The project is called Center\West.
Using the threat of eminent domain, the city displaced and relocated more than 100 households living in properties promised to La Cité.
Under the original deal, La Cité said it expected to finish Center\West by 2015, but construction on the first segment of the first phase — the two apartment buildings — did not start until 2017.
The construction of that apartment complex was almost entirely financed by taxpayers. The city provided a $12 million tax incentive. The state awarded the development a $7.5 million tax credit. The federal government insured a $56 million construction loan.
In 2018, La Cité held a ribbon cutting for those initial two buildings. Bythewood told a room of supporters and politicos that the apartment complex represented just 8% of the overall redevelopment of Poppleton.
“The enormity of what we have done as a team is monumental,” Bythewood said. But the complex wouldn’t open until the next year because of water damage and mold.
The problems didn’t stop there.
In 2023 The Baltimore Sun reported that Center\West settled multiple lawsuits in recent years. Former contractors and management companies alleged the apartment complex failed to pay them, claims the developer denied. The apartment complex cycled through management companies and was on its fifth management firm since opening in 2019.
Later that year, the city cited the property for illegally operating at least 11 units as short-term rentals.
The complex also has struggled to lease units since 2022, especially in its more expensive units, a recent review of financial disclosures showed.
A quarter of the complex’s market-rate apartments — 51 units — were vacant as of March. Based on rates listed at Apartments.com, that means the apartment complex is losing out on at least $1.2 million in revenue annually.
La Cité claims in financial filings that some of these recent vacancies are due to a defective fire-suppression sprinkler that flooded three floors last fall.
Meanwhile, the apartment complex has not paid a water bill since November 2022, according to city records. As of May 10, the complex owed more than $616,000 in unpaid water bills.
The opening of a long-promised grocery store on the ground floor of the apartment complex has been repeatedly delayed. Originally announced in 2021, the store is now expected to open by the end of the year, La Cité said in financial filings, due to “ongoing supply chain issues.”
The company has a lot riding on the success of this apartment complex, financial records show. With its reserve funds depleted, La Cité’s partners have had to raise more than $14 million to keep the apartment complex financially solvent.
In February, La Cité said in a press release that the Texas megachurch pastor T.D. Jakes had invested in the Baltimore development. But it is unclear how much Jakes had invested. His real estate company did not respond to multiple requests for comment.
Hanging above the project is a $56 million loan that La Cité has not yet begun to repay. Ohio-based KeyBank made the loan, and it is insured by the Department of Housing and Urban Development. That means taxpayers are on the hook if La Cité can’t repay it.
Despite opening the apartment complex more than five years ago, La Cité has only ever made interest payments on the $56 million loan, financial disclosures show. The developer claims it has a COVID forbearance, but a database for HUD lists the loan as delinquent.
Both HUD and KeyBank declined to comment on the loan.
Still, La Cité is trying to push forward and tackle the remaining portions of its first phase of development.
At a planning commission meeting last month, Bythewood said it is typical for a development like his to take 17 years or more.
“It’s the same thing in all large-scale development,” Bythewood said.
No, it’s not, according to Brent Flickinger, a retired city planner whose planning district covered Poppleton.
This was a uniquely bad deal that gave way too much land to a single developer, Flickinger said, and the main result has been to create a “no-man’s land” that cuts off West Baltimore from downtown.
“Poppleton is kind of like the hole in the doughnut for the reinvestment in West Baltimore,” Flickinger said.
Other developers are eager to build in Poppleton, he said, but this deal has been holding up investment in West Baltimore for years.
“The city should be bold,” Flickinger said. “If they have an opportunity to cancel the contract … they should.”
The city tried to nix the deal in 2012, claiming that the developer didn’t have the necessary financing. La Cité fired back with a federal lawsuit and blamed the city for delays.
At the time, the city hadn’t acquired all the properties in the development footprint, including ground rents on a handful of parcels. A judge sided with the developer, forcing the city back to the bargaining table.
Baltimore has since amended its contract with La Cité five times, with the most recent amendment in 2022. Along the way, the city council approved up to $58 million in tax incentives for Center\West using what’s called “tax-increment financing” bonds, or TIF bonds.
La Cité used $12 million of TIF bonds for its first two buildings. A spokeswoman for the New York developer, Irina Manoliu, said in an email that the city “needs to complete the TIF financing” for the next building before La Cité can secure its financing.
But back in Poppleton, Eaddy is tired of hearing excuses.
“We can’t continue to extend and extend and extend,” said Eaddy, who unsuccessfully ran to represent her council district this year.
Eaddy’s house on North Carrolton Avenue was located inside the fourth and final phase of La Cité’s proposed development. (La Cité is still on Phase 1B of Center\West).
The city tried for two decades to take ownership of Eaddy’s three-story rowhouse, but Eaddy refused to leave.
She won her fight in 2022 when the city paid La Cité $260,000 to remove Eaddy’s home from its development plans. Eaddy is now the last remaining homeowner in the original development footprint.
Much of the land surrounding her home is now empty or pockmarked by vacant and dilapidated buildings. Rather than invest in the existing neighborhood, Eaddy said the city and La Cité opted to erase it.
Now is the moment for the city to finally end what she calls “a reverse Robin Hood.”
“They stole from the poor and gave to the rich,” Eaddy said.
