Relating to Real Estate

In Makowski v. Mayor & City Council of Baltimore, 94 A.3d 91 (Md. June 24, 2014), the Court of Appeals affirmed a decision of the Circuit Court for Baltimore City which authorized the City to proceed with the “quick-take” condemnation of property within the Middle East community that is slated for redevelopment by the East Baltimore Development Initiative (EBDI).

The City desired to acquire 900-902 N. Chester Street, which was owned by Edward J. Makowski, because it was part of the 88 acres near the Johns Hopkins Medical Campus that EBDI is redeveloping in order to address “on a comprehensive basis the blight and disinvestment on the neighborhood.” The property is across the street from a newly constructed school and within the footprint of a planned biotechnology and life sciences facility. Makowski was the last remaining property owner in Block 1587, which consisted of almost 150 properties, to convey or agree to convey his property to the City.

The City began the steps to acquire the property in April, 2011 when it sent Makowski a “Notice of Interest to Acquire.” About nine months later, the City sent him an “Offer of Just Compensation” that caused the tenant in the property to move out. The parties then entered into agreements pursuant to which EBDI and the City began to pay Makowski $2,000 per month to compensate Makowski for the lost rent, and Makowski executed a “Right of Entry” which permitted the City to board up the property and begin preparations for its demolition. These agreements contemplated that the City would acquire the property; however, the City and Makowski were not able to reach an agreement on the price to be paid for the property.

In April, 2012 the City filed a Petition for Condemnation in the Circuit Court for Baltimore City. After Makowski moved to dismiss the condemnation, the matter was set in for a hearing. The City filed a “Petition for Immediate Possession and Title” pursuant to Section 21-16 of the Code of Public Local Laws of Baltimore City (2012). This is called a “quick-take action,” and in it the City contended that it needed immediate possession of the property. The City charged that Makowski was the last “hold-out” in the area.

The Circuit Court ruled for the City, and Makowski appealed. The appeal was directed to the Court of Appeals as provided in Section 21-16(c).
Judge Lynn Battaglia, writing for the Court of Appeals, noted that the State has the inherent power of eminent domain. Private property may only be taken for “public use,” and the condemning authority must pay fair compensation. The Maryland Constitution authorizes condemnation actions by Baltimore City for “comprehensive renovation or rehabilitation” purposes, which are deemed to be a “public use.” The Court then explained that in “quick-take” actions, the condemning authority takes title to and possession of the property prior to trial and deposits into court its estimate of the value of the property taken. Then the parties litigate the value of the property.

In two recent cases the City was denied the ability to proceed with quick-take condemnations because the City did not prove that the properties were being taken for a public use and that the City had an immediate need to acquire the properties. Mayor & City Council of Baltimore v. Valsamaki, 397 Md. 222, 916 A.2d 324 (2007) and Sapero v. Mayor & City Council of Baltimore, 398 Md. 317, 920 A.2d 1061 (2007). However, these decisions set forth two types of cases in which the requirement under Section 21-16 for immediacy is satisfied: where the property poses a public health risk and in “hold-out” situations. The law in this area disfavors “hold-outs” because they can leverage their position by waiting until all other properties in an assemblage are acquired and then demand an inordinately high price from the condemning authority.

The Court of Appeals found that there was credible testimony at the Circuit Court hearing from a City employee that Makowski was a “hold-out,” and the Court, therefore, held that the “quick-take” action was warranted.

For questions about this, please contact Ed Levin at (410) 576-1900.