EXCLUSIVE: La Cité is sued by city for unpaid water bills
The latest twist in the Poppleton development fiasco sees the Scott administration trying to recoup hundreds of thousands of dollars from a delinquent apartment owner
Above: The La Cite apartment building at 101 North Schroeder Street. (Mark Reutter)
In the face of a deadbeat owner, the Scott administration has filed suit against New York developer La Cité, saying it owes $478,000 in unpaid water bills on a West Baltimore apartment building currently on the market to settle private debts.
The building, which was subsidized by city tax dollars as well as a large federal construction loan, has made no water payments in nearly 2½ years, according to the suit.
“Metered water charges are due and payable when the bills for them have been rendered; any metered charges unpaid 20 days after issue date of the bill are considered delinquent and are liens on the real property until paid. Despite billing, defendants have failed to pay water charges as required by law and have not made a payment since November 16, 2022,” says the complaint filed on Friday in Baltimore Circuit Court.
Curiously, the lawsuit only covers the water debt at 101 North Schroeder Street, one half of the two-building complex that includes 201 North Schroeder Street.
Online water records show that 201 North Schroeder owes nearly $300,000 in unpaid water bills.
The $296,672.63 in delinquent water bills owed by La Cite’s adjoining apartment building at 201 North Schroeder Street, whose first-floor commercial space lies vacant. (DPW, Mark Reutter)
Torn Down, Never Replaced
The law department, which filed the suit, did not respond to questions about the unpaid bills at the second property, which contains many vacant apartments and unfilled commercial space. La Cité also did not respond.
La Cité, an inexperienced real estate firm with “a cast of characters hailing from the world of dentistry, high fashion, public television and nonprofit housing finance,” was contracted in 2006 to redevelop 13 acres of rundown rowhouse properties west of Martin Luther King Boulevard and south of the “Highway to Nowhere.”
The aim was to create 1,800 units of affordable and upscale housing as well as a hotel, retail stores, a park and a charter school.
After a decade of delay, the City Council approved $58.6 million in tax increment (TIF) financing in 2015, of which about $7 million was eventually drawn down to build the 262-unit apartment complex on Schroeder Street.
This project remains the only one completed by La Cité despite blocks of open land cleared by the city housing department to facilitate development.
The “Boss Kelly House,” at far left, was among hundreds of rowhouses and businesses purchased and demolished by the city to made way for townhouses and upscale condos that never materialized. BELOW: The residents of Sarah Ann Street were forced to move, but the quaint, Civil War-era houses have been spared. (Mark Reutter)
Investor Lawsuit
After a few of the residents remaining in Poppleton challenged La Cite’s effort to overhaul a block of historic alley rowhouses on Sarah Ann Street, Mayor Brandon Scott turned over renewal of the rowhouses to another developer.
More recently, La Cité’s exclusive development deal with the city was terminated after CEO Daniel Bythewood failed to finalize financing on a proposed senior tower at 231 North Schroeder Street.
This led to Arctaris, a Boston private equity firm, to demand repayment of $13 million it invested in the proposed senior tower, forcing La Cité to take steps to put its apartment buildings on the market.
The city has not cut off the water supply to apartment residents and, while it could place the two buildings in tax sale for water bill delinquency, it does not in practice undertake such actions.