Opponents of the State Center project in Bolton Hill scored a major victory today when a judge voided the development agreements between the state and a private developer.

Baltimore City Circuit Court Judge Althea M. Handy ruled that the process by which the developer was chosen in 2009 was not competitive and therefore violated state procurement laws.

While resting on rather narrow legal arguments, today’s decision has major negative implications for the long-stalled plan to turn the aging State Center on West Preston Street into a “transit-oriented development” with 1.1 million square feet of office space, more than a half million square feet of retail, and 3,200 new residences.

Hatched in 2005 by then-Gov. Bob Ehrlich, the project was vigorously pursued by Gov. Martin O’Malley and Mayor Stephanie Rawlings-Blake. It spurred an equally vigorous backlash from landlord and business interests who said the project would siphon business from the downtown and depend on subsidies, including $80 million in tax increment financing (TIF). A group of businessmen filed a lawsuit in December 2010 to block the development, claiming the state violated procurement laws.

Judge Handy agreed with the plaintiffs, writing in today’s decision, “The Court finds . . . that Defendants [state of Maryland] did not comply with the procedures required in the code, therefore, the Master Development Agreement, the First Amendment to the Master Development Agreement, and the Ground Leases are void.”

The judge also ordered the state to pay the plaintiffs’ court costs.

Original Developers Dropped Out

The Master Development Agreement placed the project in the hands of State Center LLC, a group headed by Caroline G. Moore, who had been a top lieutenant at Struever Bros. Eccles & Rouse.

The Struever group was designated to be the original developer but ran into financial troubles and transferred its ownership to Moore’s company.

The other developer was Doracon Development, whose owner, Ronald Lipscomb, dropped out of the project after he became ensnarled in a corruption investigation that led to the conviction and resignation of Mayor Sheila Dixon in 2010.