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Board approves hiring outside attorneys for Key Bridge litigation

A view of the remains of the Francis Scott Key Bridge. The span collapsed after it was struck by the Dali, a cargo ship registered in Singapore, about 30-minutes after it left the Port of Baltimore. Screenshots from video released March 26, 2024 by the National Transportation Safety Board.

While President Joe Biden has promised that the federal government will cover 100% of the costs to replace the Francis Scott Key Bridge, Gov. Wes Moore (D) said that the state will not leave taxpayers footing the whole bill.

The three-member Board of Public Works, chaired by Moore, unanimously approved contracts Wednesday to hire five firms that will represent the state in what is likely to be a protracted and complicated legal fight as it seeks compensation for the collapsed span.

“But we also know that a core part of what needs to happen, what actually needs to get done, is making sure that the responsible parties are actually held responsible,” Moore said. “And so since we have every full intention of making sure that the American taxpayers are whole. We want to also do that by ensuring that everything owed to the state through insurance payouts and litigation is going to happen.”

Maryland Attorney General Anthony Brown (D) said five law firms hired by his office are the “right mix” to handle the complex litigation expected from the collapse of the Francis Scott Key Bridge. Photo by Bryan P. Sears.

The center portion of the 1.6-mile span over the Patapsco River collapsed into the water in the early morning of March 26 after the cargo ship Dali collided with a pier that supported the bridge.

Six construction workers on the bridge died. One crew member on board the Singapore-flagged was injured.

Lloyd’s of London projects that the incident could result in the most expensive maritime insurance payout in history. The insurer said total claims could approach $4 billion. But there is no final estimate on the cost to replace the bridge.

Hours after the collision and bridge collapse, Biden vowed the federal government would fund the cost of replacement. To keep that promise, however, Congress would need to pass legislation changing the current 90/10 cost split between state and federal governments. That legislation is currently stalled.

“We’ve been pushing significantly for a 100% cost share on this with the federal government,” Moore said. “And I do want to be clear with everybody, 100% cost share does not mean that we’re just asking the taxpayers to pay for it. That’s not what I want.”

Five firms will represent the state in what is expected to be complicated and protracted litigation. Attorney General Anthony Brown said the firms are the “right mix of maritime insurance, complex litigation and other expertise and experience that we need to pursue and protect the state’s interest in this critical matter.”

The firms include Hunt Valley-based Downs Ward Bender Herzog & Kintigh PA; Kelley Drye & Warren LLP and Liskow & Lewis APLC, both of Houston; The Lanier Law Firm of New York; and Partridge LLC of New Orleans.

The firms, which will be assistant counsel to the attorney general, are hired on a contingency basis. They are paid only if the state recovers monetary damages. Fees range from 2% to 18% . The amount excludes the first $350 million, the amount of insurance payout to which the state is entitled.

“It goes without saying that this will be an exceedingly complex and potentially lengthy litigation,” Brown said.

Board approves Pimlico master agreement

The board also unanimously approved a five-part master agreement that moves the state closer to owning the Preakness Stakes and controlling horse racing in the state, and the promise of community improvements to the Park Heights Community surrounding Pimlico Race Course.

“We cannot have a thriving industry. We cannot have a singular celebratory day, while the community that surrounds that day, continues to be divested in, continues to be ignored and continues to fall,” Moore said. “That was not going to stand. And so we’re thankful for the partnership to say that we believe in the industry. We believe in supporting the business community. We believe in Park Heights. And you cannot have success in one without having success in the other.”

Belinda Stronach, CEO of Stronach Group, has agreed to a deal that lets the state control thoroughbred racing and the Preakness and revitalize Pimlico Race Course and the surrounding Park Heights community. Photo by Bryan P. Sears.

The unanimous approval comes four days before the 149th running of the Preakness Stakes.

The plan, known as the Pimlico Plus Plan, will eventually concentrate all thoroughbred horse racing at Pimlico.

“We believe that with … the approval and signing of these agreements, that we will put Maryland horse racing on a solid floor for the future,” said Greg Cross, chair of the Maryland Thoroughbred Racetrack Operating Authority.

The agreements approved by the board Wednesday cover five aspects of track and racing operations:

  • The master agreement itself transfers control of all thoroughbred horse races to the state as of Jan. 1 of this year. It also transfers related memorabilia and trophies and the Maryland Jockey Club to the state.
  • 1/ST Racing, owned by the Stronach Group, agrees to transfer Pimlico Race Course to the Maryland Thoroughbred Racetrack Operating Authority for $1 on July 1.
  • A lease agreement between the operating authority and 1/ST to lease the Laurel park facility for up to four years. Horse races, including and the Preakness Stakes, are expected to temporarily move to the Laurel facility while Pimlico is razed and rebuilt. The state would pay $1 per year for the first year and up to $3.5 million for a fourth year.
  • An exclusive and perpetual license to the Preakness, the second leg of horse racing’s Triple Crown, begining July 2026 for an intial 10-year term that automatically extends for additional five-year terms unless the operating authority gives notice of non-renewal. Stronach will receive a $3 million base fee that increases by 2% annually. Stronach will also receive 2% of the handle from races.
  • Stronach also agrees to provide the Woodlawn Vase trophy, awarded to the winner of the Preakness, on permanent loan to the operating authority. The vase, valued at an estimated $7 million, is considered one of the most valuable in sports.

The agreements are part of years of negotiations, as well as a late-filed legislative effort to save and revitalize the historic race track. In addition to $400 million in state bonds, the state also plans to invest in housing, job training and workforce development in Park Heights.

Moore signed the bill into law last week.

“It’s not enough to create winners on a field or on a track,” Moore said. “You’ve got to create winners off the field and outside of the track, as well. So when it comes to projects like this of generational impact, we’re not just focused on closing deals. We’re focusing on driving opportunity.”

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Board approves hiring outside attorneys for Key Bridge litigation