Baltimore County Inspector General: Former top official waived fees for developer, received favors

Baltimore County improperly waived millions of dollars in fees and security deposits over roughly a decade for a developer to build the multimillion dollar, mixed-use Metro Centre at Owings Mills, a new report from the county inspector general finds.

The report, released by Baltimore County Inspector General Kelly Madigan on Thursday morning, details how Arnold Jablon, who was director of the Department of Permits, Approvals and Inspections between 2011 and 2018, waived security deposits and fees for developer David S. Brown Enterprises — possibly in return for access to basketball tickets and free parking — despite having no legal authority to do so.

The county continued to grant the improper waivers in the years since Jablon’s departure even as a succeeding permits director declined to sign off on them, according to the report. The county said it will continue to honor the arrangement with the Owings Mills-based developer, which has built numerous residential and commercial buildings in the Baltimore region, largely in western Baltimore County.

The inspector general’s report focuses on development fees to build the $220 million apartment, office and retail complex starting in 2005. Metro Centre’s proximity to the Metro station — where subway trains depart every 10 minutes or so for the 15-mile run from Baltimore’s northwestern suburbs to Johns Hopkins Hospital in East Baltimore — helped earned the project a transit-oriented development state designation, which offers tax breaks and other benefits for mixed-use projects located near commuter stations to boost public transportation ridership.

When it’s completed in the coming years, Metro Centre is expected to be the largest transit-oriented development in the Baltimore region. Today it houses popular eateries like Eggspectation and World of Beer, a boxing club, a salon and spa, a county public library branch and a Community College of Baltimore County building. In December, a Marriott hotel opened on the site.

Prior to what was his second stint as the permits director, Jablon spent decades in county government as a lawyer and permits director before retiring to work for the Venable law firm in 2003 — the same firm representing Brown Enterprises in its Metro Centre dealings. When Jablon came back to oversee permits in 2011, he began waiving security deposits and inspection fees for utility and right-of-way agreements for the project, according to the IG report.

Over the years, the report found, David S. Brown Enterprises, chaired by Howard Brown, avoided paying millions in fees and deposits for the project under Jablon’s direction, with some individual waivers ranging from $48 to more than $36,000.

Emails obtained by the inspector general show that Brown provided Jablon certain benefits. Jablon, for instance, was given access at no cost to a private residential parking garage owned by the developer in Pikesville and improvements to a different private garage were discussed “to make it more suitable to Jablon’s needs,” the report says.

Jablon also received access to tickets for NCAA Big Ten Conference basketball tournaments, for which he paid face value, the report said. It’s not clear that Jablon would have been able to secure the tickets at the same cost without his connection to Brown, Madigan wrote.

Emails between Jablon and an assistant for Brown show discussions about ticket payment, upgrading seats and an offer for Jablon to attend games as Brown’s guest in his New York apartment in 2018.

“While there is no indication that any of Brown’s requests for assistance were directly connected to any of the potential benefits provided to Jablon, the communications about the parking and the basketball tickets create the appearance of a conflict of interest,” Madigan wrote.

The county declined to comment on any favors Jablon received in its response to the report.

Still, Baltimore County is basing its current agreement with Brown on an unsigned internal memo with a permits department letterhead that was addressed to no one and filed June 12, 2018. The memo stipulates that neither fees nor securities will be assessed or charged to the Metro Centre developer for any future building permits.

The IG concluded that Jablon authored the memo based on language drafted in an email sent the previous day by an attorney with the firm representing the developer.

Jablon declined a request by Madigan to be interviewed and could not be reached by The Baltimore Sun.

Per county code, Madigan wrote that only the county administrative officer has the discretion to create or change development fees, which must then be presented to the County Council. The refundable security deposits, paid by developers to ensure work such as road improvements, utility installation and environmental projects are completed properly, are prohibited from waiver. But Madigan found no evidence during Jablon’s employment that a county administrative officer ever signed off on a fee change.

After Jablon retired from the county job on Jan. 1, 2019, his successor, Michael Mallinoff, attempted to rescind the deal. Mallinoff sent a letter that September notifying Brown Enterprises that certain fees and securities would be required, according to the report. When Mallinoff met with Howard Brown in October 2019, Brown told him that the waivers were approved because of the project’s status as a transit-oriented development, according to the report.

But then a member of County Executive Johnny Olszewski Jr.’s administration stepped in to ensure the waivers were granted. Mallinoff was told by that person “that the arrangement with the developer had pre-dated the current administration and therefore, needed to be honored,” the report said.

Emails show that Mallinoff still attempted to collect some fees for about the next year, “despite getting resistance from the developer and at times, the administration,” according to the report.

Mallinoff left county government in December 2020; his departure came after he refused for months to sign off on a permit for a wealthy developer’s private tennis barn project, which is the subject of another inspector general investigation.

After he was replaced by current permits director Pete Gutwald in early 2021, Gutwald said he would not sign off on new waiver requests, citing an opinion from the law office that only the county administrative officer could authorize such waivers, the report said.

That’s when county administrative officer Stacy Rodgers sent a Sept. 21 letter to the developer affirming that the county would continue to waive project fees as authorized by the unsigned 2018 memo, but only for new construction; modifications of existing buildings will be subject to permit fees, Rodgers said.

In a letter to the inspector general responding to the report, Rodgers wrote that Olszewski’s administration will maintain the arrangement made under the late Baltimore County Executive Kevin Kamenetz’s administration.

“Providing fee waivers in connection with large development projects has not been a practice of the current administration,” Rodgers wrote. “We inherited this agreement, which had been in place for several years prior to our administration taking office. As such, it was appropriate for the agreement to remain in place.

“While our administration will honor the agreement we inherited, we will not waive fees into perpetuity at this site,” she wrote to Madigan, adding the administration intends to adhere to county code for security deposits on any future phases of Metro Centre.

Because the county said it will honor the arrangement with Brown Enterprises, Madigan questioned whether the county plans to refund roughly $41,000 in fees “inadvertently” collected under Jablon and Mallinoff, since such payments mean the county was not adhering to its own agreement with the developer.

Rodgers wrote that the county would not refund any money that was collected from the developer.

Matt Schoenfeld, an attorney who works as general counsel for David S. Brown, declined to comment on the report.

Council chair Julian Jones, a Democrat whose district includes Owings Mills, declined to comment on the administration’s decision not to notify council members of the fees. He added, though, that he sees the Metro Centre as one part of a development plan — along with Foundry Row and Mill Station — that is breathing life back into downtown Owings Mills.

David S. Brown Enterprises and Howard Brown have contributed to the campaigns of several Baltimore County elected officials. Olszewski has received at least $14,500 since 2018, while Jones has received at least $5,100 in cash and in-kind campaign donations since 2019, according to state records.

“The Metro Centre is very important to my community,” Jones said. “It’s a tremendous source of pride to the community. It’s a tremendous economic driver for not just this side of the county, but for all Baltimore County.”