The $1.5 billion State Center deal is subject to state procurement laws and needs to be properly bid, Baltimore City Circuit Court Judge Althea M. Handy has ruled.

"The Court finds, and the Defendants admit, that Defendants did not comply with the procedures required in the code, therefore, the Master Development Agreement, the First Amendment to the Master Development Agreement, and the Ground Leases are void," Baltimore City Circuit Court Judge Althea M. Handy wrote in a decision released Jan. 17.

The ruling is a huge setback for state government plans to turn its 20 acres of aging office buildings into a modern mixed-use development under a public-private partnership. It's a huge victory for downtown office-building owners who sued to stop the project, arguing that the project would drain renters from their buildings and would do so with their tax money-which was being handed out in violation of state contracting rules.

"On behalf of the many downtown businesses, both small and large, that raised questions about this project and how it was awarded, we are pleased," said Alan Rifkin of Rifkin, Livingston, Levitan, and Silver, who represented the plaintiffs. "The court's ruling reconfirms the significance of following the competitive bidding laws that have served the people of this state for well for so many years."