Records reveal mounting problems at a city-backed apartment complex in West Baltimore [Baltimore Sun]

Nearly two decades ago, Baltimore officials made an ambitious promise to the residents of Poppleton, a predominantly Black neighborhood west of downtown. The city would spend millions of dollars buying property, moving residents and razing structures to clear 14 acres of land that would be given exclusively to one developer. In return, that developer would create a new, diverse, vibrant mini-city with room for them to return.

The city has kept its side of the deal. Much of the neighborhood is now vacant. Blocks once filled with rowhouses are empty lots, waiting for excavators, cranes and construction crews to arrive.

But promises made by the developer — New York-based La Cité — remain largely unfulfilled. La Cité completed one “luxury” apartment complex along North Schroeder Street called Center\West, which opened in 2019. La Cité plans to build an age-restricted residential building next, but Center\West has faced a slew of problems, including lawsuits filed by contractors and management companies, unpaid water bills, an exodus of tenants and at least a dozen units operating as unlicensed Airbnb-style rentals.

Dan Bythewood, president of La Cité, didn’t respond to requests for comment.

In 2005, his firm won the bidding to redevelop the neighborhood. There were plans for national retail brands, restaurants, a public park, a charter school, a state-of-the-art tennis facility and thousands of housing units.

But after years with nothing built, the city tried to end its agreement with La Cité in 2012. La Cité fired back with a lawsuit, claiming the city was dragging its feet. As part of the litigation, the city said it already spent $10 million assembling the land for the first phase. But a judge sided with the developer, which forged ahead with plans to build the apartment complex.

Much of the money used to construct that complex came from taxpayers. In 2015, City Council approved up to $58 million in public financing for the project — $12 million has been drawn so far — and La Cité later secured a $56 million loan backed by the U.S. Department of Housing and Urban Development.

Aside from the empty retail space on its first floor, the Center\West apartment complex is finished. A long-promised grocery store is expected to occupy the first floor later this year.

The complex consists of 262 units across two buildings, Avra and Cirro. They rise several stories and feature a modern, gray checkerboard exterior that contrasts with nearby brick buildings. A fifth of the Center\West units are reserved for low-income residents.

La Cité held a ribbon-cutting ceremony in November 2018, but residents did not move in until the following year. At the time, Bythewood and La Cité blamed the delay on water damage and declined to elaborate.

Previously unreported court records shed light on what happened behind the scenes. These records are part of lawsuits filed by and against Park Square Homes, an LLC created by La Cité and its partners to own the Center\West apartment complex.

Shortly before the planned opening of Center\West, La Cité discovered spots of mold on cabinets throughout the buildings. Officials initially blamed an improperly designed air-conditioning system that caused condensation and water damage inside the apartments, and La Cité initiated a multimillion-dollar repair job.

Midway through those repairs, La Cité stopped the overhaul of its air conditioning system and shifted the blame to its general contractor, court documents show. Kinsley Construction had installed cabinets while an underlying mixture of gypsum and concrete was still wet, La Cité said, and the developer hired another contractor to finish the job.

Kinsley sued in August 2019, saying it was owed more than $3.4 million. La Cité filed a counterclaim, alleging Kinsley was liable for more than $17.7 million in damages to Center\West. They settled the lawsuit in March 2021.

Popowski Brothers Inc., a contractor hired after Kinsley, entered into arbitration with La Cité and two other firms over similar allegations of nonpayment. In July 2021, an arbitrator found that La Cité owed Popowski Brothers $610,794.

Meanwhile, in the handful of years it’s been open, Center\West has cycled through management companies. Most apartment complex owners hire management companies to handle day-to-day building operations, such as leasing, maintenance, staffing and security, and Center\West is on its fifth since 2019.

Two former management companies filed suit, also alleging nonpayment. After La Cité countersued, both cases were settled.

As losses at Center\West mounted from the water damage and loss of business, La Cité turned to its insurers. In a July 2021 lawsuit, La Cité said its losses totaled at least $26 million — losses that should be covered by the insurers. But the companies offered to pay just $50,000 under a “fungus” provision. The insurance companies’ lawyers did not respond to or declined requests for comment, and the lawsuit is ongoing.

While most privately owned apartment complexes do not have to disclose operational and financial updates, Center\West must provide regular updates to investors because the city sold $12 million of bonds to support the project.

According to those disclosures to investors, La Cité spent through $5.1 million of contingency funds to complete and operate Center\West. Its subsidiary, Park Square Homes, raised $3 million to cover property tax payments and is in the process of raising another $1.5 million to “cover deficits and re-tenant the property.” The disclosures did not specify how that money would be raised.

The complex also has an unpaid city water bill of about $425,000.

A fifth of all tenants have left the Center\West complex since last fall, according to the disclosures, prompting La Cité said to fire its fourth management company, Bethesda-based Ross Companies. Ross declined to comment on the termination.

Through much of last year, La Cité told investors that nearly all the 262 units at Center\West were occupied, but not all of those tenants may have been permanent residents.

Chiquita Eaddy started working the front desk at Center\West through an employment agency in November and quickly learned that some units were being used as short-term rentals through sites like Airbnb. The apartment complex felt more like a hotel some days, and Eaddy said she regularly met people from all over the country — and someone from Scotland — who were staying there. Eaddy said she lost her job this month when the new management company started.

A review of short-term rental platforms this month, including Airbnb, Vrbo and Booking.com, found at least 14 units advertised at Center\West. One unit, priced $145 a night, was described as a “Luxurious modern penthouse apartment centrally located in the heart of downtown Baltimore.”

The city Department of Housing and Community Development oversees short-term rentals in Baltimore, where hosts must have a license and are restricted to renting only their primary residence. When informed by The Baltimore Sun about the short-term rentals advertised at Center\West, spokeswoman Tammy Hawley said the agency has not issued any such licenses for those apartments. Hawley said the hosts advertising short-term rentals there were using fraudulent license numbers.

“Center\West management has also been notified and agreed that no one should be using units as Airbnb and they are taking action with tenants on their end,” Hawley said in an email.

During a recent meeting of the Poppleton Now Neighborhood Association, neighbors said that they routinely saw tourists and traveling nurses coming in and out of the buildings with luggage.

Sonia Eaddy — no relation to Chiquita Eaddy — is the association’s president, and said neighbors near the apartments are concerned with parking and safety issues. Many apartment tenants park in the street, rather than pay the $150 a month for the complex’s garage, Eaddy said.

Neighbors also feel like there’s been a constant police presence around the apartment complex, Eaddy said, which reminds them of the high-rise public housing towers that once stood in Poppleton. Rather than creating a new neighborhood, Eaddy said, the developer seems to be recreating the past.

“The building has a nickname, and the nickname is ‘Little Lexington Terrace,’” said Eaddy, referring to the crime-ridden tower once described as a “living hell.”

One resident of Center\West said the quality of life in the building has steadily deteriorated since she moved there in 2021. She asked that her name not be published for fear of retaliation. There is often no security at the building, she said, and trash sometimes litters the hallways and stairs.

“It’s a nice building,” the resident said. “It really is, but it won’t be for long if they refuse to properly manage.”

Councilman John Bullock represents the West Baltimore district that includes Poppleton. Bullock, a Democrat, said he has heard concerns from residents about Center\West’s cleanliness and security.

When Bullock spoke with La Cité’s executives, he said they acknowledged those complaints. According to Bullock, they told him there have been loud parties, fighting, vandalism and unapproved guests in the buildings.

Bullock said La Cité has been communicative and his faith in the development has been buoyed by conversations between the developer and residents of Poppleton.

Bullock said he wants La Cité to keep building trust with the neighborhood and hopes the new management firm will correct any issues at Center\West.

“It’s a step in the right direction,” Bullock said. “Hopefully, it bears fruit.”

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