A New York developer’s ambitions to revitalize a neighborhood in West Baltimore could end in a courtroom in Boston.

For two decades, La Cité Development has tried — and failed — to remake a massive area in the heart of Poppleton. Championed by city officials, the project displaced families, destroyed homes and created entire blocks of empty land. Just one apartment complex was built.

Now, a judge is ordering La Cité Development to cease operations and hand over the next phase of development to one of its investors, Arctaris Impact Investors. Arctaris, based in Massachusetts, sued La Cité in a local court last summer.

The two firms signed an operating agreement in November 2022 to develop an age-restricted apartment building for older adults. La Cité would manage the project. Arctaris would provide more than $13 million to get it off the ground.

The total cost was expected to exceed $70 million, according to their operating agreement. But La Cité never secured any additional financing for the project, Arctaris alleges in court documents.

When the agreed-upon deadline to start construction arrived on Jan. 31, 2024, nothing happened. The site in Poppleton remains an empty lot.

Citing the lack of progress, Arctaris filed suit. The investor gave two options: hand over control of the project, or give the money back.

According to court filings, La Cité agreed to pay about $12 million to Arctaris by the end of last year to keep control of the project.

That didn’t happen.

Two weeks before the deadline, La Cité put its existing apartment complex up for sale. No sale has been recorded in land records, and the listing is still active.

In court documents, La Cité blamed the missed $12 million payment on a separate, “frivolous” lawsuit filed by residents of Poppleton in August.

To Arctaris, La Cité’s failure to pay meant it ceded control of the project to Arctaris. The firm said it sent a representative late last month to the New York address listed by La Cité ― but that no executives were present.

Arctaris filed a motion for an injunction, asking the judge to order La Cité to hand over control. La Cité filed its own motion for an injunction, asking to stay in control.

On Monday, Judge Kenneth Salinger allowed Arctaris’ motion, writing in his decision that the firm was “extremely likely” to succeed at trial.

“The Project has not gone well,” he wrote.

The order could deal a serious blow to La Cité’s overall aims in Poppleton, which were already under duress.

La Cité and its president, Dan Bythewood Jr., first approached the city about redeveloping a large swath of Poppleton in 2003, and the city signed a deal with the inexperienced developer in 2006.

The deal survived years of delays and litigation. But, citing missed deadlines and other issues, the city ended its agreement with La Cité last year.

La Cité threatened to sue the city, though it has not, and vowed to forge ahead.

In a statement Wednesday, La Cité said the judge’s decision only applied to the proposed age-restricted apartment building.

The developer has separately been pursuing plans to build townhomes and smaller apartment buildings in Poppleton with builder NVR Ryan Homes. La Cité has said that neither the city’s cancellation of its agreement last year nor the Boston judge’s order apply to that project.

Political donations

Citing reporting in The Baltimore Banner, Poppleton residents filed a federal lawsuit last summer, claiming the city improperly used eminent domain when it signed a deal with the politically connected developer. That litigation is ongoing.

Politics also played a role in souring the relationship between Arctaris and La Cité, court records show, with $16,000 worth of donations leading to a monthslong standoff.

La Cité and the Bythewood family have been donating to Maryland politicians for years. In July, a review of campaign finance records by The Banner found nearly $110,000 of such donations. A day after that story was published, records show Bythewood donated $3,000 to Gov. Wes Moore.

Throughout their operating agreement, Arctaris regularly reviewed and approved withdrawals of money by La Cité. At one point in 2023, Arctaris reimbursed the developer $16,000 for “marketing” expenses.

That turned out to be a $6,000 donation to Mayor Brandon Scott and $10,000 to Moore’s inaugural fund, and Arctaris later asked La Cité for that money back, according to court documents. In the court filings, Arctaris called the way La Cité characterized those expenses in an effort to be reimbursed for them “unlawful” and “contrary to Maryland Election Law.”

In an affidavit, La Cité Vice President Ian Arias said the campaign donations were legitimate marketing expenses that allowed the developer to attend two political events for Scott and Moore and “draw attention and support to the project.”

After refusing for months to repay Arctaris the $16,000, La Cité later relented, though the developer still maintains it was an appropriate way to use the investor’s money.

“Attending such events are traditional marketing expenses for most multi-family real estate developers,” the developer said in a statement.