A legal challenge to the proposed $1.5 million State Center redevelopment project will be allowed to go forward, following a ruling yesterday by a Baltimore City Circuit Court judge.

The developers and state officials pushing for the massive west side project had filed a motion asking the judge to throw out the lawsuit by a group of downtown property owners, who are arguing that the government-subsidized project has been improperly bid and that it would hurt struggling properties in the central business district.

Judge Althea M. Handy denied the motion.

One argument for throwing out the suit had been that the property owners hadn’t established “taxpayer standing” because they failed to specify how, as taxpayers, they might be financially damaged if State Center was built.

Handy said it is not necessary to allege facts that “necessarily” lead to the conclusion taxes would be increased.

“The test is whether the taxpayer reasonably may sustain a pecuniary loss or tax increase,” Handy wrote, citing a Court of Appeals decision.

“Plaintiffs have pled that state agencies engaged in illegal and ultra vires acts that could potentially cause plaintiffs pecuniary harm or an increase in taxes,” Handy wrote. “This court finds that the allegations contained in plaintiffs’ amended complaint are sufficient to establish taxpayer standing.”

Another argument for the motion to deny had been that there are administrative remedies available to pursue challenges to procurement procedures and that the property-owners should first exhaust them.

Handy rejected this argument as well, noting that the plaintiffs “are not prospective bidders or offerers,” so they would not be entitled to protest to the Maryland State Board of Contract Appeals.

Handy also tartly observed that such a protest would be difficult since there is no contract to protest. (One of the property owners’ complaints is that key elements of the project were not competitively bid.)

The lawsuit challenging State Center is being funded in part by Oriole owner Peter G. Angelos, who is also a downtown landlord. Angelos is not a plaintiff in the suit.