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MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

TO: Douglas Fairchild, Responsible Partner, Real Estate Practice Group Cynthia Ho, Lead Associate, Real Estate Practice Group

FROM: Grace Nakamura, Working Associate, Real Estate Practice Group

CC: Theresa M. Calloway, General Counsel, Fairwater Real Estate Investment Trust Marcus D. Okonkwo, EVP, Development, Fairwater Real Estate Investment Trust

DATE: December 18, 2025

RE: Zoning and Entitlements Analysis — Harbor Point Towers, 1500–1580 Wills Street, Baltimore, MD 21231 (Block 7419, Lots 1–6, Baltimore City)

CLIENT: Fairwater Real Estate Investment Trust

MATTER: Harbor Point Development JV, LLC — Institutional JV Development Matter

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I. EXECUTIVE SUMMARY

This memorandum presents the results of our analysis of the zoning and entitlement status for the Harbor Point Towers mixed-use development project (the "Project") located at 1500–1580 Wills Street, Baltimore, MD 21231 (Block 7419, Lots 1–6, Baltimore City) (the "Site"). This analysis has been prepared in connection with the formation of Harbor Point Development JV, LLC (the "JV"), the $240,000,000 joint venture between Fairwater HP Manager, LLC, a wholly owned subsidiary of Fairwater Real Estate Investment Trust ("Fairwater"), holding a 30% interest, and Prescott HP Investor, LLC ("Prescott"), holding a 70% interest, for the purpose of acquiring, developing, and operating the Project.

The Site consists of an approximately 8.2-acre waterfront parcel located in Baltimore's Harbor Point district. The Project contemplates the construction of two 28-story residential towers containing a total of 610 residential units (rental) and approximately 45,000 square feet of ground-floor retail and commercial space, collectively referred to as "Harbor Point Towers."

The total estimated Project cost is $576,000,000, allocated as follows: land acquisition costs of approximately $54,000,000; hard construction costs of approximately $432,000,000; and soft costs (including architectural, engineering, legal, financing, and other pre-development and development costs) of approximately $90,000,000. The JV will be capitalized with $240,000,000 in equity (Fairwater: $72,000,000 at 30%; Prescott: $168,000,000 at 70%), supplemented by a $336,000,000 construction loan facility from Meridian National Bank, N.A.

The Site is currently owned in fee simple by Harbor East Land Holdings, LLC, of which Vincent A. DeLuca is the sole member. The JV intends to acquire the Site through an assignment of the existing Purchase and Sale Agreement (the "PSA") between Fairwater (as original purchaser) and Harbor East Land Holdings, LLC. The target date for land closing is January 30, 2026. The JV Operating Agreement is expected to be executed on January 12, 2026.

Key Finding: The Project is fully entitled under Baltimore City Planned Unit Development Ordinance No. 24-0417, which was approved by the Baltimore City Council on June 14, 2024 (the "PUD Ordinance"). The PUD Ordinance authorizes the proposed mixed-use development, including the two 28-story residential towers, 610 residential units, and 45,000 square feet of ground-floor retail. Building permit applications have not yet been filed, but permits are expected to be obtained in Q1 2026. Several conditions of PUD approval must be satisfied or monitored prior to and during construction, as detailed in Section III.C below. Based on our review, no material impediments to closing or construction commencement have been identified, subject to the conditions and recommendations set forth herein.

The construction lender, Meridian National Bank, N.A. (contact: Kevin P. Driscoll, SVP, Institutional Real Estate Lending), will require confirmation of the Project's entitlement status as a condition precedent to closing on the $336,000,000 construction loan facility. The construction loan closing is targeted for February 15, 2026. The general contractor for the Project is Pinnacle General Contractors, Inc. ("Pinnacle"), which has executed a Guaranteed Maximum Price ("GMP") contract dated December 20, 2025. The target date for construction commencement is March 1, 2026, with estimated substantial completion in September 2028 and estimated stabilization (93% occupancy) in March 2029.

This memorandum addresses the following topics: (a) the Site description and prior zoning classification; (b) the PUD approval, including the scope of the approval and conditions imposed; (c) vested rights analysis under Maryland law; (d) building permit application status and timeline; (e) other required governmental approvals and permits; (f) environmental compliance and regulatory interface; (g) title and survey matters affecting entitlements; (h) transferability of entitlements to the JV; (i) ongoing compliance and reporting obligations; and (j) risk assessment and recommendations. This memorandum should be read in conjunction with the separately issued Environmental Review Memorandum, Title Review Memorandum, and Survey Review Memorandum, each prepared by this office.

II. SITE DESCRIPTION AND PRIOR ZONING CLASSIFICATION

A. Parcel Description

The Site is located at 1500–1580 Wills Street, Baltimore, MD 21231, in the Harbor Point district of Baltimore City. The Site is identified in the records of the Baltimore City Department of Finance, Bureau of Revenue Collections, as Block 7419, Lots 1 through 6. The total area of the Site is approximately 8.2 acres (approximately 357,192 square feet), as confirmed by the ALTA/NSPS Land Title Survey delivered on December 3, 2025, by Calvert Surveying & Engineering, Inc. (the "Survey"). The Survey was prepared in accordance with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, including Table A optional items 1 through 4, 5, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 11(b), 13, 14, 16, 17, 18, and 19.

The Site is a waterfront parcel situated on the northwest shoreline of the Northwest Branch of the Patapsco River, within the broader Inner Harbor area of Baltimore. The Site's western boundary fronts on Wills Street, while the eastern boundary is defined by the waterfront bulkhead and shoreline. The northern boundary is generally adjacent to existing mixed-use development within the Harbor Point district, and the southern boundary abuts a combination of public right-of-way and additional parcels within the Harbor Point master development area.

The current fee simple owner of the Site is Harbor East Land Holdings, LLC, a Maryland limited liability company, of which Vincent A. DeLuca is the sole member and manager. Harbor East Land Holdings, LLC acquired the Site through a series of transactions completed between 2018 and 2020, consolidating the six underlying lots (Lots 1 through 6 of Block 7419) into a single development parcel. Title to the Site is held free and clear of any mortgage or deed of trust encumbrances, subject to the easements, covenants, and restrictions identified in the title commitment issued by Tidewater Insurance Group, Inc. on December 9, 2025 (the "Title Commitment"), which are addressed in the separate Title Review Memorandum and summarized in Section VIII below as relevant to entitlements.

The Site is improved with several former industrial and warehouse structures, the majority of which are vacant and in various states of disrepair. The Phase I Environmental Site Assessment completed on November 25, 2025, by Bayline Environmental Consultants, LLC, provides a detailed description of existing improvements and site conditions, which is addressed in the separate Environmental Review Memorandum and summarized in Section VII below.

B. Prior Zoning Classification

Prior to the adoption of PUD Ordinance No. 24-0417 on June 14, 2024, the Site was classified under the Baltimore City Zoning Code (Title 32 of the Baltimore City Code, as amended by the comprehensive "Transform Baltimore" rezoning adopted in 2017) in the W-1 (Waterfront: Industrial/Commercial Mixed-Use) zoning district. The W-1 district is a waterfront-oriented zoning classification designed to accommodate a mix of light industrial, commercial, office, and limited residential uses in areas historically characterized by maritime and industrial activity along the Baltimore waterfront.

Under the W-1 zoning designation, the following categories of uses were permitted as of right or by conditional use:

(a) Permitted As-of-Right Uses. The W-1 district permitted, as of right, light manufacturing, warehouse and distribution facilities, marine-related commercial uses, general commercial and office uses, and limited residential uses at densities not exceeding a floor area ratio (FAR) of 2.0 and building heights not exceeding 65 feet (approximately 5 to 6 stories).

(b) Conditional Uses. Certain additional uses were available through the conditional use process, including higher-density mixed-use development, but subject to specific conditions and Planning Commission approval.

(c) Prohibited Uses. Heavy industrial uses, hazardous materials processing, and certain other incompatible uses were prohibited.

The proposed Harbor Point Towers development, however, significantly exceeds what was permissible under the W-1 base zoning classification in several critical respects:

(i) Height. The two proposed 28-story residential towers will reach an estimated height of approximately 310 feet each (exclusive of mechanical penthouses and architectural elements), far exceeding the W-1 district's maximum building height of 65 feet. Even under the conditional use provisions, the W-1 district did not contemplate structures of this scale.

(ii) Density. The proposed 610 residential units on an 8.2-acre site represent a residential density of approximately 74 units per acre, with an estimated FAR (including retail space) significantly in excess of the W-1 district's maximum FAR of 2.0.

(iii) Use Mix. While the W-1 district permitted limited residential use as an accessory or secondary component of a commercial or industrial development, the proposed Project is predominantly residential in character, with ground-floor retail serving as an ancillary component. This use profile was not consistent with the W-1 district's primary orientation toward industrial and commercial uses.

(iv) Parking. The W-1 district's parking requirements were calibrated for commercial and light industrial uses. The residential parking ratios required for 610 units, together with retail parking, necessitated a different parking framework than the base zoning provided.

For these reasons, the prior base zoning classification of W-1 was inadequate to accommodate the proposed Project, and the PUD application was necessary to establish the zoning framework for the Harbor Point Towers development. The Planned Unit Development process under the Baltimore City Zoning Code provides a mechanism for comprehensive site-specific zoning that permits deviations from the base zoning district regulations, provided that the proposed development satisfies the PUD approval criteria, including compatibility with surrounding uses, provision of public benefits, and consistency with the Baltimore City Comprehensive Master Plan.

C. Surrounding Land Use Context

The Site is situated within the broader Harbor Point mixed-use district, which has undergone significant transformation over the past decade from a formerly industrial waterfront area to a vibrant mixed-use neighborhood. The surrounding land uses include the following:

(a) North. Immediately to the north of the Site, the Harbor Point district includes completed mixed-use developments featuring mid-rise residential buildings, Class A office space (including the headquarters of Crestline Corporation), ground-floor retail, and structured parking. The existing development to the north generally ranges from 8 to 15 stories in height.

(b) East. To the east, the Site is bounded by the waterfront, specifically the Northwest Branch of the Patapsco River. The waterfront area includes a completed public promenade, marina facilities, and open space amenities that serve the existing Harbor Point community. The PUD conditions require the extension and enhancement of this public waterfront access, as discussed in Section III.C below.

(c) South. To the south, the Site is adjacent to additional parcels within the Harbor Point master development area that are in various stages of planning and development. Some parcels to the south remain underutilized or improved with older commercial and warehouse structures.

(d) West. To the west, across Wills Street, the land use transitions to a mix of commercial, institutional, and residential uses characteristic of the broader Harbor East and Fells Point neighborhoods.

The proposed Harbor Point Towers development is consistent with the general character and planning objectives for the Harbor Point area. The Baltimore City Comprehensive Master Plan, most recently updated in 2022, identifies the Harbor Point district as a priority area for high-density mixed-use waterfront redevelopment, with emphasis on residential development to support population growth, ground-floor retail to activate the pedestrian environment, public waterfront access, and sustainable design. The 2022 Comprehensive Master Plan update specifically contemplates increased building heights and densities in the Harbor Point district, subject to site-specific review through the PUD or other discretionary approval processes.

Additionally, the Harbor Point area has been the subject of several coordinated planning initiatives by Baltimore City, including the Harbor Point Master Development Plan (adopted by the Planning Commission in 2013) and the Baltimore Waterfront Promenade Plan (updated 2020), both of which support the type of high-density, mixed-use waterfront development proposed by the Harbor Point Towers project. The PUD application for the Project was reviewed for consistency with these planning documents, and the Planning Commission's recommendation of approval expressly cited the Project's alignment with the city's waterfront redevelopment objectives.

III. PLANNED UNIT DEVELOPMENT APPROVAL — ORDINANCE NO. 24-0417

A. PUD Application and Approval Process

The PUD application for the Harbor Point Towers project was filed by Harbor East Land Holdings, LLC, as the fee simple owner of the Site, in accordance with the Baltimore City Zoning Code, Title 32, Subtitle 5 (Planned Unit Developments). The application was prepared by the land use attorneys and planning consultants retained by Harbor East Land Holdings, LLC, and was submitted to the Baltimore City Department of Planning on or about September 15, 2023.

The PUD application and approval process proceeded through the following stages:

(1) Pre-Application Conference. Prior to filing the formal PUD application, the applicant participated in a pre-application conference with the Baltimore City Department of Planning staff, at which the general scope and concept for the proposed development were discussed. This pre-application conference occurred in July 2023. Department of Planning staff provided initial feedback on the proposed building heights, density, and use mix, and identified key issues to be addressed in the formal application, including transportation impacts, waterfront access, stormwater management, and affordable housing.

(2) Application Filing and Completeness Review. The formal PUD application was filed on September 15, 2023, accompanied by the required submissions, including a PUD site plan, architectural renderings, traffic impact study, environmental assessment, public benefit statement, and community engagement plan. The Department of Planning determined the application to be complete on October 8, 2023.

(3) Community Engagement. In accordance with Baltimore City's community engagement requirements for PUD applications, the applicant conducted a series of community meetings and informational sessions with neighborhood associations and stakeholder groups in the Harbor Point, Harbor East, and Fells Point areas. These meetings occurred between October 2023 and January 2024. Community feedback was incorporated into the final PUD submission, including modifications to the ground-floor retail layout, enhanced public waterfront access provisions, and additional pedestrian and bicycle infrastructure commitments.

(4) Planning Commission Review and Public Hearing. The Baltimore City Planning Commission held a public hearing on the PUD application on March 12, 2024. The public hearing was preceded by a staff report from the Department of Planning recommending approval of the PUD, subject to specified conditions. The Planning Commission received testimony from the applicant, community members, and other interested parties. Following deliberation, the Planning Commission voted to recommend approval of the PUD to the Baltimore City Council, subject to the conditions enumerated in the staff report, with certain modifications adopted at the hearing.

(5) Baltimore City Council Review and Approval. Following the Planning Commission's recommendation, the PUD application was introduced to the Baltimore City Council as Council Bill 24-0417 on April 8, 2024. The bill was referred to the Council's Land Use and Transportation Committee, which held a committee hearing on May 6, 2024. The committee voted to report the bill favorably to the full Council. The Baltimore City Council adopted Council Bill 24-0417 on June 10, 2024, by a vote of 12 to 2, with one abstention.

(6) Mayoral Approval and Effective Date. The bill was signed by the Mayor of Baltimore City on June 14, 2024, and became effective as Ordinance No. 24-0417 on that date.

Under Maryland law, a PUD ordinance adopted by a municipal legislative body is a legislative act. As such, the ordinance was subject to judicial review only by way of a petition for judicial review filed in the Circuit Court for Baltimore City within 30 days of the effective date, in accordance with the Maryland Rules and applicable provisions of the Maryland Land Use Article. We have confirmed that no petition for judicial review, appeal, or other legal challenge was filed within the 30-day appeal period (which expired on July 14, 2024), and no subsequent challenge to the PUD Ordinance has been filed. Accordingly, Ordinance No. 24-0417 is final and non-appealable.

B. Scope of PUD Approval

PUD Ordinance No. 24-0417 authorizes the development of the Site as a mixed-use planned unit development with the following parameters:

(1) Permitted Uses. The PUD Ordinance authorizes the following uses on the Site:

(a) Multifamily residential use (rental apartments), including studio, one-bedroom, two-bedroom, and three-bedroom configurations;

(b) Ground-floor retail and commercial use, including restaurants, cafés, convenience retail, personal services, and fitness/wellness establishments;

(c) Accessory uses customarily incidental to multifamily residential and ground-floor retail, including residential amenity spaces (fitness center, co-working lounge, pool deck, rooftop terrace), building management and leasing offices, mail and package rooms, and building maintenance and utility spaces; and

(d) Structured and surface parking for residents, retail customers, and visitors.

(2) Maximum Building Height. The PUD Ordinance permits a maximum of two towers, each up to 28 stories in height. The maximum building height measured from the average finished grade is 325 feet, exclusive of mechanical penthouses, elevator overruns, and architectural screening elements, which may extend an additional 20 feet above the maximum roof height (for a total maximum height of 345 feet to the top of mechanical/architectural features). These height limits are depicted on the approved PUD site plan.

(3) Maximum Residential Density. The PUD Ordinance permits a maximum of 610 residential units across both towers combined. The ordinance does not prescribe a maximum floor area ratio but instead controls density through the unit count limitation and the building height and footprint parameters established in the approved PUD site plan.

(4) Maximum Retail/Commercial square Footage. The PUD Ordinance permits approximately 45,000 square feet of ground-floor retail and commercial space, distributed between both towers and the connecting podium structure as shown on the approved PUD site plan.

(5) Building Footprints and Setbacks. The PUD Ordinance establishes specific building footprint envelopes and minimum setback requirements for each tower and the podium/base structure, as depicted on the approved PUD site plan (Appendix B). Key setback requirements include:

(a) Minimum 25-foot setback from the Wills Street right-of-way at grade, with upper floors permitted to cantilever to a minimum 15-foot setback above the 5th floor;

(b) Minimum 40-foot setback from the waterfront bulkhead line, to accommodate the required public waterfront promenade and landscaped buffer;

(d) Minimum 15-foot setbacks from the northern and southern property boundaries at the podium level, increasing to 20 feet above the 10th floor.

(6) Parking Requirements. The PUD Ordinance establishes the following minimum parking ratios for the Project:

(a) Residential parking: 0.85 spaces per residential unit (minimum 519 spaces for 610 units);

(b) Retail parking: 3 spaces per 1,000 square feet of gross leasable retail area (minimum 135 spaces for 45,000 square feet); and

The PUD Ordinance also permits up to 50 bicycle parking spaces on each tower's ground level and requires a minimum of 20 electric vehicle charging stations within the parking garage.

(7) Open Space and Public Amenity Requirements. The PUD Ordinance requires a minimum of 15% of the total Site area (approximately 53,580 square feet, or 1.23 acres) to be developed as publicly accessible open space, including the waterfront promenade, landscaped plazas, and pedestrian connections to the surrounding street grid. The specific open space requirements are enumerated in the conditions of approval (Section III.C below).

(8) Signage Provisions. The PUD Ordinance establishes a signage program for the Project, permitting building identification signage, retail tenant signage, and wayfinding signage in accordance with a master sign plan to be submitted to the Department of Planning for administrative approval prior to certificate of occupancy. The master sign plan must comply with the general sign regulations of the Baltimore City Zoning Code, except as specifically modified by the PUD Ordinance.

(9) Phasing. The PUD Ordinance permits, but does not require, phased development of the two towers. Both towers may be constructed simultaneously or sequentially, at the developer's election. If the development is phased, each phase must independently satisfy the applicable parking, open space, and public amenity requirements attributable to that phase, as determined by the Department of Planning. Based on current Project plans and the GMP contract with Pinnacle, both towers will be constructed simultaneously, commencing in March 2026.

C. Conditions of Approval

Ordinance No. 24-0417 imposes a number of conditions of approval that must be satisfied prior to building permit issuance, during construction, and/or upon completion of the Project. We have reviewed each condition and assessed its current compliance status. The material conditions are summarized below, with a comprehensive compliance status table attached as Appendix C.

1. Infrastructure Improvements. The PUD Ordinance requires the developer to design, construct, and dedicate the following public infrastructure improvements in connection with the Project:

(a) Public Street Improvements. The developer must reconstruct and improve the segment of Wills Street adjacent to the Site (approximately 900 linear feet) to include widened sidewalks (minimum 12 feet), new street trees, pedestrian-scale lighting, and ADA-compliant curb ramps. Additionally, the developer must construct a new public road extending from Wills Street to the waterfront promenade (the "Harbor Access Drive"), providing vehicular and emergency access to the eastern portion of the Site. The plans for these improvements must be approved by the Baltimore City Department of Transportation prior to building permit issuance, and construction must be completed prior to the issuance of the first certificate of occupancy.

(b) Utility Upgrades. The developer must design and construct upgrades to the existing water main and sanitary sewer infrastructure serving the Site, as required by the Baltimore City Department of Public Works, to ensure adequate capacity for the 610 residential units and 45,000 square feet of retail. The developer is also responsible for the extension of stormwater drainage infrastructure to connect the Site's stormwater management system to the public system. Preliminary utility plans have been prepared by the Project's civil engineer and are currently under review by the Department of Public Works.

(c) Stormwater Management Facilities. The developer must design, construct, and maintain on-site stormwater management facilities in compliance with the Baltimore City Stormwater Management Design Manual and the Maryland Stormwater Management Act of 2007, as amended. The PUD Ordinance requires a "green infrastructure" approach to stormwater management, incorporating bioretention facilities, permeable paving, green roofs, and other low-impact development techniques to the maximum extent practicable. A detailed stormwater management plan must be approved by the Baltimore City Department of Public Works prior to grading permit and building permit issuance.

(d) Waterfront Promenade and Public Access Improvements. The developer must design and construct an extension of the existing Harbor Point waterfront promenade along the full length of the Site's waterfront frontage (approximately 650 linear feet). The promenade must be a minimum of 20 feet in width, with a combination of hardscape and landscaping, seating, lighting, and public art installations. The promenade must be dedicated as a public access easement upon completion and must be maintained by the developer or its successors in perpetuity. The waterfront promenade must be completed and open to the public no later than the date of issuance of the first certificate of occupancy.

Compliance Status: Preliminary infrastructure plans have been prepared. Final engineering plans for street improvements and utility upgrades are in progress and are expected to be submitted to the relevant city departments in January 2026, concurrent with building permit applications. The stormwater management plan is under development and has been the subject of preliminary review by the Department of Public Works. The waterfront promenade design is in the schematic design phase. This condition requires ongoing monitoring and coordination with the Baltimore City Department of Transportation and Department of Public Works. No material compliance issues have been identified at this time.

2. Design Review. The PUD Ordinance requires that the final architectural design of the Project, including building elevations, materials, ground-floor retail façade treatment, and landscape design, be submitted to and approved by the Baltimore City Department of Planning's Urban Design and Architecture Advisory Panel ("UDAAP") prior to the issuance of any building permit. The UDAAP review is intended to ensure that the final design is consistent with the design principles and character depicted in the PUD application materials, while allowing appropriate refinement and development of the design during the construction documents phase.

Compliance Status: Schematic design for the Project has been completed by the Project architect and is currently being developed into design development and construction documents. The UDAAP submission is expected to be made in January 2026, with approval anticipated in February 2026. The timing of UDAAP approval is a critical path item for building permit issuance and should be closely monitored. We recommend that the Project architect engage in informal pre-submission consultation with UDAAP staff to identify any potential design issues prior to the formal submission.

3. Affordable Housing / Workforce Housing. The PUD Ordinance requires that a minimum of 10% of the total residential units (61 units) be set aside as "workforce housing" units, defined as units affordable to households earning no more than 80% of the Area Median Income ("AMI") for the Baltimore Metropolitan Statistical Area, as determined by the U.S. Department of Housing and Urban Development. The workforce housing units must be distributed proportionally across both towers and across the range of unit types (studio, one-bedroom, two-bedroom, and three-bedroom), and must be comparable in quality and finish to market-rate units. The workforce housing commitment runs for a period of 30 years from the date of initial certificate of occupancy and must be memorialized in a regulatory agreement recorded against the Site.

Additionally, during the PUD approval process, the applicant voluntarily committed to provide an additional 5% of units (approximately 31 units) as affordable to households earning no more than 60% of AMI. This voluntary commitment was incorporated into the PUD Ordinance as a binding condition.

Compliance Status: The workforce housing and affordability commitments have been incorporated into the JV's financial underwriting and operating pro forma. A draft regulatory agreement is being prepared by this office for review by the Baltimore City Department of Housing and Community Development. The regulatory agreement must be executed and recorded prior to certificate of occupancy, but the commitment must be acknowledged in the building permit application. The JV Operating Agreement should include provisions addressing the allocation of workforce housing costs between Fairwater and Prescott and the impact on development returns. We note that the 92 affordable/workforce units (61 at 80% AMI plus 31 at 60% AMI) will affect projected rental revenue and should be reflected in the pro forma provided to Meridian National Bank, N.A. in connection with the construction loan.

4. Transportation / Traffic Mitigation. The PUD Ordinance incorporates the findings and mitigation commitments from the traffic impact study prepared by the applicant's traffic engineers in connection with the PUD application. The required transportation and traffic mitigation measures include:

(a) Signal timing modifications and signal equipment upgrades at the intersection of Wills Street and Eastern Avenue, to be designed and funded by the developer and implemented by the Baltimore City Department of Transportation;

(b) Construction of a new traffic signal at the intersection of Wills Street and the proposed Harbor Access Drive, subject to design approval by the Department of Transportation;

(c) Installation of enhanced pedestrian crosswalks, ADA-compliant pedestrian signals, and curb extensions at three intersections adjacent to the Site;

(d) Construction of a protected bicycle lane along the Site's Wills Street frontage, connecting to the existing Baltimore City bicycle network;

(e) Implementation of a Transportation Demand Management ("TDM") plan, including provision of transit pass subsidies for residents, bicycle storage and repair facilities, and car-sharing parking spaces; and

(f) Payment of a transportation impact fee of $500,000 to the Baltimore City Transportation Impact Fund, payable prior to issuance of the first certificate of occupancy.

Compliance Status: The traffic signal and intersection improvements are in the design phase and are being coordinated with the Department of Transportation. The TDM plan has been drafted in outline form but requires completion and approval. The transportation impact fee is budgeted in the Project's soft cost estimate. No material compliance issues have been identified, but the signal improvements at Wills Street and Eastern Avenue will require cooperation from the Maryland State Highway Administration if Eastern Avenue is classified as a state highway in this segment, which is under investigation.

5. Environmental / Waterfront Protections. The PUD Ordinance imposes the following environmental and waterfront protection requirements:

(a) Approval of a comprehensive stormwater management plan by the Baltimore City Department of Public Works and, if applicable, the Maryland Department of the Environment, incorporating Environmental Site Design (ESD) to the maximum extent practicable, as required by the Maryland Stormwater Management Act;

(b) Compliance with the Chesapeake Bay Critical Area requirements, to the extent the Site falls within the Critical Area (the 1,000-foot buffer from tidal waters). Based on preliminary review, the Site is located within the Chesapeake Bay Critical Area and is classified as an Intensely Developed Area ("IDA"), which permits development at high densities subject to compliance with the Critical Area program's requirements for impervious surface limits, stormwater management, habitat protection, and buffer management. A Critical Area approval from the Chesapeake Bay Critical Area Commission or its local designee (Baltimore City) is required;

(c) Maintenance of a minimum 100-foot natural buffer from the mean high-water line, except as modified by the IDA provisions and approved by the Critical Area Commission;

(d) Shoreline stabilization measures to prevent erosion and protect water quality during and after construction; and

(e) Compliance with all applicable federal, state, and local environmental regulations, including without limitation the Clean Water Act, the Maryland Environment Article, and the Baltimore City Environmental Control Board regulations.

Compliance Status: The stormwater management plan is under development, as noted above. The Critical Area classification of the Site as an IDA has been preliminarily confirmed by Baltimore City planning staff, but formal Critical Area approval has not yet been obtained. A Critical Area application is expected to be filed in January 2026. Shoreline stabilization measures are included in the preliminary site plans. Environmental compliance is being coordinated with Bayline Environmental Consultants, LLC. This condition requires continued attention and timely filing of the Critical Area application.

6. Public Amenities. In addition to the waterfront promenade and infrastructure improvements described above, the PUD Ordinance requires the developer to provide the following public amenities:

(a) A publicly accessible ground-level plaza of not less than 8,000 square feet between the two towers, designed as a gathering space with seating, landscaping, public art, and programmable event space;

(b) A minimum of two public art installations, selected through a process approved by the Baltimore Office of Promotion & The Arts, with a combined minimum budget of $750,000;

(c) A community meeting room of not less than 1,500 square feet within one of the towers, available for use by neighborhood organizations at no charge, subject to a community use agreement to be approved by the Department of Planning;

(d) A public waterfront access easement recorded against the Site, ensuring permanent public access to the waterfront promenade; and

(e) A contribution of $250,000 to the Harbor Point Community Benefit Fund, payable prior to the issuance of the first certificate of occupancy.

Compliance Status: The public plaza and community meeting room are incorporated into the architectural program. The public art budget is included in the Project's soft cost estimate. The waterfront access easement will be prepared by this office and recorded at or prior to the first certificate of occupancy. The community benefit contribution is budgeted. No material compliance issues have been identified.

7. Timing / Commencement Requirements. The PUD Ordinance contains a commencement requirement providing that construction of the Project (defined as the commencement of foundation work) must begin within 36 months of the effective date of the PUD Ordinance (i.e., by June 14, 2027). If construction does not commence within this 36-month period, the PUD approval shall lapse and the Site shall revert to its prior zoning classification (W-1), unless the developer obtains an extension of time from the Baltimore City Council by ordinance. The PUD Ordinance does not specify a maximum construction completion deadline, but the certificate of occupancy application must demonstrate conformance with the approved PUD plans.

Compliance Status: The current construction schedule targets construction commencement (foundation work) on or about March 1, 2026, which is well within the 36-month commencement deadline of June 14, 2027. However, as discussed in Section V below, building permits have not yet been obtained, and any material delay in permit issuance could push the construction commencement date. We recommend that the JV calendar the June 14, 2027 sunset date and monitor progress against this deadline. Given the current timeline, there is a comfortable margin, but unforeseen permitting delays could compress this window.

8. Reporting and Compliance. The PUD Ordinance requires the developer to submit semi-annual progress reports to the Baltimore City Planning Commission during the construction period, documenting:

(a) The status of construction and percentage of completion;

(b) Compliance with the conditions of approval, including infrastructure improvements, affordable housing commitments, and environmental requirements;

(d) Any issues or delays that may affect the Project's conformance with the PUD Ordinance.

The first progress report is due six months after the issuance of the building permit. The Planning Commission retains the authority to convene a public hearing to review compliance if the reports indicate material deviations from the approved plans or conditions.

Compliance Status: No progress reports are due at this time. This reporting obligation will become relevant following building permit issuance and should be incorporated into the development management procedures under the Development Management Agreement with Fairwater. We recommend that Marcus D. Okonkwo's development team establish a compliance tracking system to ensure timely and accurate reporting.

D. PUD Site Plan and Approved Plans

The approved PUD site plan, a copy of which is attached hereto as Appendix B, constitutes a binding component of Ordinance No. 24-0417. The PUD site plan depicts the location, footprint, and maximum height of each tower, the podium and parking structure, building setbacks, the public waterfront promenade, the ground-level plaza, vehicular and pedestrian access points, parking entry locations, and landscape areas. The approved PUD site plan also incorporates key dimensions, setback measurements, and notations regarding conditions of approval.

Legal Effect of the Approved PUD Site Plan. Under the Baltimore City Zoning Code, the approved PUD site plan has the force and effect of a zoning regulation applicable to the Site. Development of the Site must conform to the approved PUD site plan. Any deviation from the approved plan requires either an administrative modification or a formal PUD amendment, depending on the nature and significance of the deviation, as described below.

Modifications and Amendments. The Baltimore City Zoning Code distinguishes between two categories of changes to an approved PUD:

(a) Minor Modifications. Minor modifications that do not materially alter the character, density, intensity, height, or layout of the approved development may be approved administratively by the Director of the Department of Planning, without City Council action. Examples of minor modifications include adjustments to building footprint locations of not more than 10 feet, changes to façade materials or architectural details that do not affect building height or massing, and reconfiguration of parking layout that does not reduce the total number of parking spaces below the minimum requirement.

(b) Major Amendments. Major amendments that materially alter the character, density, intensity, height, or layout of the approved development require a formal PUD amendment, processed through the same application, public hearing, Planning Commission review, and City Council approval process as the original PUD application. Examples of major amendments include increases in building height beyond the approved maximums, increases in the total number of residential units, reductions in required open space or public amenities, and changes to the permitted use categories.

Implications for the GMP Contract. The GMP contract with Pinnacle General Contractors, Inc. (executed December 20, 2025) is based on the construction documents being developed from the approved PUD site plan and the schematic design. As construction documents are finalized, it is essential that the Project architect and Pinnacle confirm that all design details are consistent with the approved PUD site plan. Any design modifications that emerge during the construction documents phase must be evaluated against the PUD site plan to determine whether an administrative modification or major amendment is required. The GMP contract should include provisions (and we understand that it does) allocating responsibility for any cost increases or schedule delays arising from PUD-related design changes. We recommend that the development team establish a protocol for PUD compliance review of all design changes prior to implementation.

IV. VESTED RIGHTS ANALYSIS UNDER MARYLAND LAW

A. Maryland Vested Rights Doctrine

Under Maryland law, the doctrine of vested rights determines the point at which a property owner's right to develop property in accordance with an approved plan becomes legally protected against subsequent changes in zoning or land use regulations. The vested rights doctrine is a critical consideration for the JV, as the period between JV formation and the issuance of building permits represents a window during which the development rights authorized by the PUD Ordinance are not yet fully vested.

Maryland follows the traditional common law rule that a landowner's right to develop property does not vest until (i) a valid building permit has been issued, and (ii) the landowner has made substantial expenditures in good-faith reliance on the permit. This two-part test has been articulated by the Court of Appeals of Maryland (now the Supreme Court of Maryland) in a line of cases including Prince George's County v. Sunrise Development Ltd. Partnership, 330 Md. 297 (1993), and County Council of Prince George's County v. Zimmer Development Co., 444 Md. 490 (2015), among others.

Under this framework:

(a) Permit Issuance. A mere application for a building permit does not create vested rights. The permit must be actually issued. Similarly, the approval of a PUD, site plan, or subdivision plan, while a significant entitlement, does not by itself vest the right to develop. The PUD approval establishes the regulatory framework for the development, but the actual right to commence construction does not vest until the building permit is in hand.

(b) Substantial Expenditures. Even after a building permit is issued, the landowner must make substantial expenditures in good-faith reliance on the permit before the right to develop is fully vested. The Maryland courts have not established a bright-line test for what constitutes "substantial" expenditures, but have considered factors such as the magnitude of expenditures relative to the total project cost, the nature of the expenditures (site preparation, foundation work, and procurement of long-lead materials are typically more persuasive than soft costs alone), and the irreversibility of the expenditures.

(c) Good Faith. The expenditures must be made in good faith — that is, the landowner must not have been on notice that a change in the regulatory framework was imminent or likely.

The Maryland Land Use Article (Title 4 of the Maryland Code) contains certain statutory protections for approved development plans, but these provisions are primarily applicable to counties and municipalities operating under the Land Use Article's planning and zoning framework. Baltimore City, as an independent city with its own charter and zoning code, is not directly subject to all provisions of the Land Use Article, although Maryland courts have applied the general principles of the vested rights doctrine to Baltimore City in a manner consistent with the Land Use Article's framework.

The Baltimore City Charter, Article VII, Section 1, grants the City Council the power to adopt and amend zoning regulations, including PUD ordinances. The Charter does not contain a specific vested rights provision, but the general common law principles apply.

B. Application to Harbor Point Towers

Applying the Maryland vested rights framework to the Harbor Point Towers project, we note the following:

PUD Approval as a Legislative Act. Ordinance No. 24-0417 is a legislative act of the Baltimore City Council. As such, it is generally not subject to reversal or repeal absent a subsequent legislative action by the City Council. Under Maryland law, a subsequent City Council could, in theory, amend or repeal the PUD Ordinance, but such action would require the same legislative process (introduction, committee hearing, public hearing, Council vote, and mayoral approval) and would be subject to legal challenge by the affected property owner on grounds of reliance, estoppel, or unconstitutional taking. However, the PUD approval alone, without a building permit, does not fully vest the development rights under the traditional Maryland vested rights doctrine.

Pre-Development Expenditures. Fairwater, on behalf of the JV, has incurred and will continue to incur significant pre-development expenditures in reliance on the PUD Ordinance, including: (a) fees paid to architectural, engineering, and consulting firms for design and planning work; (b) legal fees incurred in connection with the JV formation, entitlement analysis, and loan negotiation; (c) deposits under the land PSA; (d) costs of environmental and geotechnical investigations; and (e) other soft costs. These expenditures, which are subject to reimbursement under the Pre-Formation Expenditure Reimbursement Agreement between Fairwater and the JV, constitute evidence of good-faith reliance on the PUD approval. However, under Maryland case law, pre-permit soft cost expenditures alone may not be sufficient to establish vested rights in the absence of a building permit.

Equitable Vesting Arguments. In certain circumstances, Maryland courts have recognized equitable vesting arguments where a property owner has made substantial expenditures in reliance on a governmental approval, even in the absence of a building permit, particularly where the government's conduct (such as the adoption of a site-specific legislative approval like a PUD ordinance) has induced the reliance. While these arguments are not well-established in Maryland law and are fact-dependent, the magnitude of the Project ($576,000,000 total cost, with $240,000,000 in equity and $336,000,000 in construction financing), the specificity of the PUD Ordinance, and the JV's substantial pre-development expenditures would support an equitable vesting argument if the City were to attempt to revoke or materially modify the PUD before permits are issued.

Recommendation. We strongly recommend that the JV move expeditiously to obtain building permits following the execution of the JV Agreement and land PSA assignment. The filing of building permit applications should occur as soon as practicable after JV signing (targeted for January 12, 2026), and the JV should use commercially reasonable efforts to obtain permits in Q1 2026, before the construction loan closing on February 15, 2026, or as soon thereafter as feasible. Obtaining building permits and commencing construction (defined in the PUD Ordinance as the commencement of foundation work) will complete the vesting process and provide the strongest legal protection against subsequent regulatory changes.

Risk Assessment — Pre-Vesting Period. During the period between JV signing (January 12, 2026) and building permit issuance (expected Q1 2026), the development rights are not yet fully vested under Maryland law. During this window, the following risks exist:

(a) The Baltimore City Council could, in theory, amend or repeal the PUD Ordinance, although this would require a full legislative process and would be subject to legal challenge;

(b) The City could adopt new building code requirements, zoning amendments, or regulatory requirements that could affect the Project's design, cost, or feasibility;

(c) A moratorium on development or building permits could be imposed, although no such moratorium is currently pending or, to our knowledge, contemplated; and

(d) Changes in the political environment or administration could alter the City's support for the Project, although the PUD Ordinance was adopted with a strong Council majority (12-2).

We assess the risk of an adverse regulatory change during the pre-vesting period as low, based on the strong Council vote, the absence of any known legislative initiatives that would affect the Project, and the general political support for waterfront redevelopment in Baltimore. Nevertheless, the risk is not zero, and prompt action to obtain building permits is the most effective mitigation.

C. Protection Against Downzoning or Regulatory Changes

As noted above, the primary risk during the pre-vesting period is that Baltimore City could take legislative or regulatory action that would adversely affect the Project before building permits are issued. We have reviewed the current legislative calendar of the Baltimore City Council and the pending regulatory actions of the Department of Planning and other relevant agencies, and we are not aware of any specific initiative that would affect the Harbor Point Towers project.

However, we note the following general considerations:

(a) Building Code Updates. Baltimore City periodically updates its building code to adopt new editions of the International Building Code ("IBC") and related codes. A new code edition could impose additional requirements (such as enhanced fire protection, accessibility, or energy efficiency standards) that could affect the Project's design and cost. Under Maryland law, building permit applications are generally reviewed under the codes in effect at the time of application filing. We recommend filing permit applications as early as practicable to "lock in" the current building code requirements.

(b) Inclusionary Housing Legislation. There is ongoing discussion in the Baltimore City Council regarding the adoption or expansion of mandatory inclusionary housing requirements. If new inclusionary housing legislation is adopted before building permits are issued, it could impose additional affordable housing requirements beyond those already established in the PUD Ordinance. The current PUD Ordinance includes a 10% workforce housing requirement plus a 5% voluntary affordability commitment, which may satisfy or exceed any new inclusionary requirement, but this should be monitored.

(c) Environmental and Sustainability Regulations. Baltimore City and the State of Maryland have adopted and continue to develop environmental and sustainability regulations, including building energy performance standards, electrification requirements, and stormwater management enhancements. Changes to these regulations could affect the Project's design and cost if adopted before permits are issued.

Recommendation — Land PSA Assignment. We recommend that the Assignment and Assumption of PSA from Fairwater to the JV, and the underlying PSA with Harbor East Land Holdings, LLC, include robust representations and warranties from the seller (Harbor East Land Holdings, LLC / Vincent A. DeLuca) regarding the entitlement status of the Site, including:

(a) That the PUD Ordinance is in full force and effect, has not been modified or amended, and is not subject to any pending or threatened challenge, appeal, or revocation;

(b) That the seller has not received any notice from any governmental authority of any proposed zoning change, building code amendment, moratorium, or other regulatory action that would affect the Project;

(c) That the seller has complied with all conditions of the PUD Ordinance that are required to be satisfied prior to land closing; and

(d) That the seller will cooperate with the JV and Fairwater in connection with building permit applications, design review submissions, and other governmental applications pending land closing and for a reasonable period thereafter.

These representations and warranties should survive land closing for a period of not less than 12 months and should be included as conditions precedent to the JV's obligation to close on the land acquisition.

V. BUILDING PERMIT APPLICATION AND TIMELINE

A. Current Status

As of the date of this memorandum (December 18, 2025), building permit applications for the Harbor Point Towers project have not yet been filed with the Baltimore City Department of Housing and Community Development ("DHCD"), which administers the building permit review and issuance process for Baltimore City. The building permit applications are expected to be filed in January 2026, following the execution of the JV Agreement and the assignment of the land PSA, with permits expected to be obtained in Q1 2026.

Responsibility for the preparation and filing of building permit applications rests with Fairwater, in its capacity as development manager under the Development Management Agreement between Fairwater and the JV. Fairwater's development team, led by Marcus D. Okonkwo, EVP, Development, will coordinate the permit application process with the Project architect, the Project's structural, MEP, and civil engineers, and Pinnacle General Contractors, Inc.

B. Required Submissions

The building permit application for a project of this scale and complexity will require the submission of the following documents and plans to the Baltimore City DHCD, Plan Review Division:

(1) Architectural Plans and Specifications. Complete architectural plans and specifications for both towers, including floor plans, building sections, exterior elevations, wall sections, roof plans, and interior layouts. The architectural plans must conform to the approved PUD site plan and incorporate any modifications approved through the UDAAP design review process. The plans must comply with the International Building Code (2021 edition, as adopted by Baltimore City), the International Residential Code (to the extent applicable to dwelling units), and all applicable Baltimore City amendments and supplements.

(2) Structural Engineering Plans. Complete structural engineering plans and calculations for both towers, including foundation design, structural framing, lateral load resistance systems, and connections. The structural plans must be based on the geotechnical report prepared for the Site and must comply with the IBC's structural provisions, including seismic design requirements (Seismic Design Category A or B for the Baltimore area) and wind design requirements.

(3) MEP Plans. Complete mechanical, electrical, and plumbing plans and specifications, including HVAC systems, electrical distribution, emergency power, plumbing systems, domestic water and sanitary sewer connections, and fire suppression and detection systems.

(4) Fire Protection and Life Safety Plans. Dedicated fire protection and life safety plans, including fire alarm system design, automatic sprinkler system design, fire department access and connection points, stairwell pressurization, smoke control systems, and means of egress analysis. These plans will be reviewed by the Baltimore City Fire Department's Fire Prevention Bureau.

(5) Stormwater Management Plan. A detailed stormwater management plan prepared in accordance with the Baltimore City Stormwater Management Design Manual and the Maryland Stormwater Management Act, incorporating Environmental Site Design (ESD) measures. This plan must be approved by the Baltimore City Department of Public Works prior to building permit issuance.

(6) Accessibility Compliance Documentation. Documentation demonstrating compliance with the Americans with Disabilities Act (ADA) Accessibility Standards for Buildings and Facilities, the Fair Housing Act's design and construction requirements (for covered multifamily dwellings with four or more units), and the Maryland Accessibility Code (COMAR 05.02.02).

(7) Energy Code Compliance Documentation. Documentation demonstrating compliance with the International Energy Conservation Code (IECC 2021 edition, as adopted by Baltimore City) or, alternatively, compliance with ASHRAE 90.1-2019 for commercial portions of the building.

(8) Geotechnical Report. The geotechnical report for the Site, prepared by a licensed geotechnical engineer, documenting subsurface conditions, bearing capacity, groundwater conditions, and foundation design recommendations. The geotechnical report has been prepared and will be submitted with the permit application.

(9) UDAAP Design Review Approval. Written confirmation of final design review approval from the UDAAP, as required by PUD Condition No. 2 (discussed in Section III.C.2 above). This approval must be obtained prior to building permit issuance.

C. Review and Approval Process

The building permit review process involves multiple city departments and agencies, coordinated through the DHCD Plan Review Division:

(1) Baltimore City DHCD — Plan Review Division. The DHCD Plan Review Division is the primary reviewing authority for building permit applications. The Plan Review Division reviews architectural, structural, and MEP plans for compliance with the building code, zoning code (including the PUD Ordinance), accessibility requirements, and energy code. For a project of this complexity, the initial plan review cycle typically takes 60 to 90 days from the date of a complete submission. Corrections and resubmissions may add 30 to 45 days per cycle. In our experience with comparable projects, two to three review cycles are common, resulting in a total review timeline of approximately 90 to 150 days from initial submission.

(2) Baltimore City Fire Department — Fire Prevention Bureau. Fire protection and life safety plans are reviewed by the Fire Prevention Bureau concurrently with the DHCD plan review. The Fire Department review typically takes 45 to 60 days and may involve coordination meetings with the Project's fire protection engineer. Issues commonly arising in high-rise residential construction include stairwell pressurization, fire department access to upper floors, smoke control in parking garages, and fire command center design.

(3) Baltimore City Department of Public Works. The Department of Public Works reviews stormwater management plans, water and sewer connection applications, and grading plans. Stormwater management plan approval is a prerequisite to building permit issuance. The DPW review typically takes 60 to 90 days.

(4) Maryland Department of the Environment (MDE). If the Project requires state-level environmental permits (discussed in Section VI.B below), MDE review may proceed concurrently but

MEMORANDUM
PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
TO: Douglas Fairchild, Responsible Partner, Real Estate Practice Group Cynthia Ho, Lead Associate, Real Estate Practice Group
FROM: Grace Nakamura, Working Associate, Real Estate Practice Group
CC: Theresa M. Calloway, General Counsel, Fairwater Real Estate Investment Trust Marcus D. Okonkwo, EVP, Development, Fairwater Real Estate Investment Trust
DATE: December 18, 2025
RE: Zoning and Entitlements Analysis — Harbor Point Towers, 1500–1580 Wills Street, Baltimore, MD 21231 (Block 7419, Lots 1–6, Baltimore City)
CLIENT: Fairwater Real Estate Investment Trust
MATTER: Harbor Point Development JV, LLC — Institutional JV Development Matter
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I. EXECUTIVE SUMMARY
This memorandum presents the results of our analysis of the zoning and entitlement status for the Harbor Point Towers mixed-use development project (the "Project") located at 1500–1580 Wills Street, Baltimore, MD 21231 (Block 7419, Lots 1–6, Baltimore City) (the "Site"). This analysis has been prepared in connection with the formation of Harbor Point Development JV, LLC (the "JV"), the $240,000,000 joint venture between Fairwater HP Manager, LLC, a wholly owned subsidiary of Fairwater Real Estate Investment Trust ("Fairwater"), holding a 30% interest, and Prescott HP Investor, LLC ("Prescott"), holding a 70% interest, for the purpose of acquiring, developing, and operating the Project.
The Site consists of an approximately 8.2-acre waterfront parcel located in Baltimore's Harbor Point district. The Project contemplates the construction of two 28-story residential towers containing a total of 610 residential units (rental) and approximately 45,000 square feet of ground-floor retail and commercial space, collectively referred to as "Harbor Point Towers."
The total estimated Project cost is $576,000,000, allocated as follows: land acquisition costs of approximately $54,000,000; hard construction costs of approximately $432,000,000; and soft costs (including architectural, engineering, legal, financing, and other pre-development and development costs) of approximately $90,000,000. The JV will be capitalized with $240,000,000 in equity (Fairwater: $72,000,000 at 30%; Prescott: $168,000,000 at 70%), supplemented by a $336,000,000 construction loan facility from Meridian National Bank, N.A.
The Site is currently owned in fee simple by Harbor East Land Holdings, LLC, of which Vincent A. DeLuca is the sole member. The JV intends to acquire the Site through an assignment of the existing Purchase and Sale Agreement (the "PSA") between Fairwater (as original purchaser) and Harbor East Land Holdings, LLC. The target date for land closing is January 30, 2026. The JV Operating Agreement is expected to be executed on January 12, 2026.
Key Finding: The Project is fully entitled under Baltimore City Planned Unit Development Ordinance No. 24-0417, which was approved by the Baltimore City Council on June 14, 2024 (the "PUD Ordinance"). The PUD Ordinance authorizes the proposed mixed-use development, including the two 28-story residential towers, 610 residential units, and 45,000 square feet of ground-floor retail. Building permit applications have not yet been filed, but permits are expected to be obtained in Q1 2026. Several conditions of PUD approval must be satisfied or monitored prior to and during construction, as detailed in Section III.C below. Based on our review, no material impediments to closing or construction commencement have been identified, subject to the conditions and recommendations set forth herein.
The construction lender, Meridian National Bank, N.A. (contact: Kevin P. Driscoll, SVP, Institutional Real Estate Lending), will require confirmation of the Project's entitlement status as a condition precedent to closing on the $336,000,000 construction loan facility. The construction loan closing is targeted for February 15, 2026. The general contractor for the Project is Pinnacle General Contractors, Inc. ("Pinnacle"), which has executed a Guaranteed Maximum Price ("GMP") contract dated December 20, 2025. The target date for construction commencement is March 1, 2026, with estimated substantial completion in September 2028 and estimated stabilization (93% occupancy) in March 2029.
This memorandum addresses the following topics: (a) the Site description and prior zoning classification; (b) the PUD approval, including the scope of the approval and conditions imposed; (c) vested rights analysis under Maryland law; (d) building permit application status and timeline; (e) other required governmental approvals and permits; (f) environmental compliance and regulatory interface; (g) title and survey matters affecting entitlements; (h) transferability of entitlements to the JV; (i) ongoing compliance and reporting obligations; and (j) risk assessment and recommendations. This memorandum should be read in conjunction with the separately issued Environmental Review Memorandum, Title Review Memorandum, and Survey Review Memorandum, each prepared by this office.
II. SITE DESCRIPTION AND PRIOR ZONING CLASSIFICATION
A. Parcel Description
The Site is located at 1500–1580 Wills Street, Baltimore, MD 21231, in the Harbor Point district of Baltimore City. The Site is identified in the records of the Baltimore City Department of Finance, Bureau of Revenue Collections, as Block 7419, Lots 1 through 6. The total area of the Site is approximately 8.2 acres (approximately 357,192 square feet), as confirmed by the ALTA/NSPS Land Title Survey delivered on December 3, 2025, by Calvert Surveying & Engineering, Inc. (the "Survey"). The Survey was prepared in accordance with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, including Table A optional items 1 through 4, 5, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 11(b), 13, 14, 16, 17, 18, and 19.
The Site is a waterfront parcel situated on the northwest shoreline of the Northwest Branch of the Patapsco River, within the broader Inner Harbor area of Baltimore. The Site's western boundary fronts on Wills Street, while the eastern boundary is defined by the waterfront bulkhead and shoreline. The northern boundary is generally adjacent to existing mixed-use development within the Harbor Point district, and the southern boundary abuts a combination of public right-of-way and additional parcels within the Harbor Point master development area.
The current fee simple owner of the Site is Harbor East Land Holdings, LLC, a Maryland limited liability company, of which Vincent A. DeLuca is the sole member and manager. Harbor East Land Holdings, LLC acquired the Site through a series of transactions completed between 2018 and 2020, consolidating the six underlying lots (Lots 1 through 6 of Block 7419) into a single development parcel. Title to the Site is held free and clear of any mortgage or deed of trust encumbrances, subject to the easements, covenants, and restrictions identified in the title commitment issued by Tidewater Insurance Group, Inc. on December 9, 2025 (the "Title Commitment"), which are addressed in the separate Title Review Memorandum and summarized in Section VIII below as relevant to entitlements.
The Site is improved with several former industrial and warehouse structures, the majority of which are vacant and in various states of disrepair. The Phase I Environmental Site Assessment completed on November 25, 2025, by Bayline Environmental Consultants, LLC, provides a detailed description of existing improvements and site conditions, which is addressed in the separate Environmental Review Memorandum and summarized in Section VII below.
B. Prior Zoning Classification
Prior to the adoption of PUD Ordinance No. 24-0417 on June 14, 2024, the Site was classified under the Baltimore City Zoning Code (Title 32 of the Baltimore City Code, as amended by the comprehensive "Transform Baltimore" rezoning adopted in 2017) in the W-1 (Waterfront: Industrial/Commercial Mixed-Use) zoning district. The W-1 district is a waterfront-oriented zoning classification designed to accommodate a mix of light industrial, commercial, office, and limited residential uses in areas historically characterized by maritime and industrial activity along the Baltimore waterfront.
Under the W-1 zoning designation, the following categories of uses were permitted as of right or by conditional use:
(a) Permitted As-of-Right Uses. The W-1 district permitted, as of right, light manufacturing, warehouse and distribution facilities, marine-related commercial uses, general commercial and office uses, and limited residential uses at densities not exceeding a floor area ratio (FAR) of 2.0 and building heights not exceeding 65 feet (approximately 5 to 6 stories).
(b) Conditional Uses. Certain additional uses were available through the conditional use process, including higher-density mixed-use development, but subject to specific conditions and Planning Commission approval.
(c) Prohibited Uses. Heavy industrial uses, hazardous materials processing, and certain other incompatible uses were prohibited.
The proposed Harbor Point Towers development, however, significantly exceeds what was permissible under the W-1 base zoning classification in several critical respects:
(i) Height. The two proposed 28-story residential towers will reach an estimated height of approximately 310 feet each (exclusive of mechanical penthouses and architectural elements), far exceeding the W-1 district's maximum building height of 65 feet. Even under the conditional use provisions, the W-1 district did not contemplate structures of this scale.
(ii) Density. The proposed 610 residential units on an 8.2-acre site represent a residential density of approximately 74 units per acre, with an estimated FAR (including retail space) significantly in excess of the W-1 district's maximum FAR of 2.0.
(iii) Use Mix. While the W-1 district permitted limited residential use as an accessory or secondary component of a commercial or industrial development, the proposed Project is predominantly residential in character, with ground-floor retail serving as an ancillary component. This use profile was not consistent with the W-1 district's primary orientation toward industrial and commercial uses.
(iv) Parking. The W-1 district's parking requirements were calibrated for commercial and light industrial uses. The residential parking ratios required for 610 units, together with retail parking, necessitated a different parking framework than the base zoning provided.
For these reasons, the prior base zoning classification of W-1 was inadequate to accommodate the proposed Project, and the PUD application was necessary to establish the zoning framework for the Harbor Point Towers development. The Planned Unit Development process under the Baltimore City Zoning Code provides a mechanism for comprehensive site-specific zoning that permits deviations from the base zoning district regulations, provided that the proposed development satisfies the PUD approval criteria, including compatibility with surrounding uses, provision of public benefits, and consistency with the Baltimore City Comprehensive Master Plan.
C. Surrounding Land Use Context
The Site is situated within the broader Harbor Point mixed-use district, which has undergone significant transformation over the past decade from a formerly industrial waterfront area to a vibrant mixed-use neighborhood. The surrounding land uses include the following:
(a) North. Immediately to the north of the Site, the Harbor Point district includes completed mixed-use developments featuring mid-rise residential buildings, Class A office space (including the headquarters of Crestline Corporation), ground-floor retail, and structured parking. The existing development to the north generally ranges from 8 to 15 stories in height.
(b) East. To the east, the Site is bounded by the waterfront, specifically the Northwest Branch of the Patapsco River. The waterfront area includes a completed public promenade, marina facilities, and open space amenities that serve the existing Harbor Point community. The PUD conditions require the extension and enhancement of this public waterfront access, as discussed in Section III.C below.
(c) South. To the south, the Site is adjacent to additional parcels within the Harbor Point master development area that are in various stages of planning and development. Some parcels to the south remain underutilized or improved with older commercial and warehouse structures.
(d) West. To the west, across Wills Street, the land use transitions to a mix of commercial, institutional, and residential uses characteristic of the broader Harbor East and Fells Point neighborhoods.
The proposed Harbor Point Towers development is consistent with the general character and planning objectives for the Harbor Point area. The Baltimore City Comprehensive Master Plan, most recently updated in 2022, identifies the Harbor Point district as a priority area for high-density mixed-use waterfront redevelopment, with emphasis on residential development to support population growth, ground-floor retail to activate the pedestrian environment, public waterfront access, and sustainable design. The 2022 Comprehensive Master Plan update specifically contemplates increased building heights and densities in the Harbor Point district, subject to site-specific review through the PUD or other discretionary approval processes.
Additionally, the Harbor Point area has been the subject of several coordinated planning initiatives by Baltimore City, including the Harbor Point Master Development Plan (adopted by the Planning Commission in 2013) and the Baltimore Waterfront Promenade Plan (updated 2020), both of which support the type of high-density, mixed-use waterfront development proposed by the Harbor Point Towers project. The PUD application for the Project was reviewed for consistency with these planning documents, and the Planning Commission's recommendation of approval expressly cited the Project's alignment with the city's waterfront redevelopment objectives.
III. PLANNED UNIT DEVELOPMENT APPROVAL — ORDINANCE NO. 24-0417
A. PUD Application and Approval Process
The PUD application for the Harbor Point Towers project was filed by Harbor East Land Holdings, LLC, as the fee simple owner of the Site, in accordance with the Baltimore City Zoning Code, Title 32, Subtitle 5 (Planned Unit Developments). The application was prepared by the land use attorneys and planning consultants retained by Harbor East Land Holdings, LLC, and was submitted to the Baltimore City Department of Planning on or about September 15, 2023.
The PUD application and approval process proceeded through the following stages:
(1) Pre-Application Conference. Prior to filing the formal PUD application, the applicant participated in a pre-application conference with the Baltimore City Department of Planning staff, at which the general scope and concept for the proposed development were discussed. This pre-application conference occurred in July 2023. Department of Planning staff provided initial feedback on the proposed building heights, density, and use mix, and identified key issues to be addressed in the formal application, including transportation impacts, waterfront access, stormwater management, and affordable housing.
(2) Application Filing and Completeness Review. The formal PUD application was filed on September 15, 2023, accompanied by the required submissions, including a PUD site plan, architectural renderings, traffic impact study, environmental assessment, public benefit statement, and community engagement plan. The Department of Planning determined the application to be complete on October 8, 2023.
(3) Community Engagement. In accordance with Baltimore City's community engagement requirements for PUD applications, the applicant conducted a series of community meetings and informational sessions with neighborhood associations and stakeholder groups in the Harbor Point, Harbor East, and Fells Point areas. These meetings occurred between October 2023 and January 2024. Community feedback was incorporated into the final PUD submission, including modifications to the ground-floor retail layout, enhanced public waterfront access provisions, and additional pedestrian and bicycle infrastructure commitments.
(4) Planning Commission Review and Public Hearing. The Baltimore City Planning Commission held a public hearing on the PUD application on March 12, 2024. The public hearing was preceded by a staff report from the Department of Planning recommending approval of the PUD, subject to specified conditions. The Planning Commission received testimony from the applicant, community members, and other interested parties. Following deliberation, the Planning Commission voted to recommend approval of the PUD to the Baltimore City Council, subject to the conditions enumerated in the staff report, with certain modifications adopted at the hearing.
(5) Baltimore City Council Review and Approval. Following the Planning Commission's recommendation, the PUD application was introduced to the Baltimore City Council as Council Bill 24-0417 on April 8, 2024. The bill was referred to the Council's Land Use and Transportation Committee, which held a committee hearing on May 6, 2024. The committee voted to report the bill favorably to the full Council. The Baltimore City Council adopted Council Bill 24-0417 on June 10, 2024, by a vote of 12 to 2, with one abstention.
(6) Mayoral Approval and Effective Date. The bill was signed by the Mayor of Baltimore City on June 14, 2024, and became effective as Ordinance No. 24-0417 on that date.
Under Maryland law, a PUD ordinance adopted by a municipal legislative body is a legislative act. As such, the ordinance was subject to judicial review only by way of a petition for judicial review filed in the Circuit Court for Baltimore City within 30 days of the effective date, in accordance with the Maryland Rules and applicable provisions of the Maryland Land Use Article. We have confirmed that no petition for judicial review, appeal, or other legal challenge was filed within the 30-day appeal period (which expired on July 14, 2024), and no subsequent challenge to the PUD Ordinance has been filed. Accordingly, Ordinance No. 24-0417 is final and non-appealable.
B. Scope of PUD Approval
PUD Ordinance No. 24-0417 authorizes the development of the Site as a mixed-use planned unit development with the following parameters:
(1) Permitted Uses. The PUD Ordinance authorizes the following uses on the Site:
(a) Multifamily residential use (rental apartments), including studio, one-bedroom, two-bedroom, and three-bedroom configurations;
(b) Ground-floor retail and commercial use, including restaurants, cafés, convenience retail, personal services, and fitness/wellness establishments;
(c) Accessory uses customarily incidental to multifamily residential and ground-floor retail, including residential amenity spaces (fitness center, co-working lounge, pool deck, rooftop terrace), building management and leasing offices, mail and package rooms, and building maintenance and utility spaces; and
(d) Structured and surface parking for residents, retail customers, and visitors.
(2) Maximum Building Height. The PUD Ordinance permits a maximum of two towers, each up to 28 stories in height. The maximum building height measured from the average finished grade is 325 feet, exclusive of mechanical penthouses, elevator overruns, and architectural screening elements, which may extend an additional 20 feet above the maximum roof height (for a total maximum height of 345 feet to the top of mechanical/architectural features). These height limits are depicted on the approved PUD site plan.
(3) Maximum Residential Density. The PUD Ordinance permits a maximum of 610 residential units across both towers combined. The ordinance does not prescribe a maximum floor area ratio but instead controls density through the unit count limitation and the building height and footprint parameters established in the approved PUD site plan.
(4) Maximum Retail/Commercial square Footage. The PUD Ordinance permits approximately 45,000 square feet of ground-floor retail and commercial space, distributed between both towers and the connecting podium structure as shown on the approved PUD site plan.
(5) Building Footprints and Setbacks. The PUD Ordinance establishes specific building footprint envelopes and minimum setback requirements for each tower and the podium/base structure, as depicted on the approved PUD site plan (Appendix B). Key setback requirements include:
(a) Minimum 25-foot setback from the Wills Street right-of-way at grade, with upper floors permitted to cantilever to a minimum 15-foot setback above the 5th floor;
(b) Minimum 40-foot setback from the waterfront bulkhead line, to accommodate the required public waterfront promenade and landscaped buffer;
(c) Minimum 60-foot separation between the two towers at all levels above the podium; and
(d) Minimum 15-foot setbacks from the northern and southern property boundaries at the podium level, increasing to 20 feet above the 10th floor.
(6) Parking Requirements. The PUD Ordinance establishes the following minimum parking ratios for the Project:
(a) Residential parking: 0.85 spaces per residential unit (minimum 519 spaces for 610 units);
(b) Retail parking: 3 spaces per 1,000 square feet of gross leasable retail area (minimum 135 spaces for 45,000 square feet); and
(c) Total minimum parking: 654 spaces, to be provided in below-grade structured parking spanning both towers.
The PUD Ordinance also permits up to 50 bicycle parking spaces on each tower's ground level and requires a minimum of 20 electric vehicle charging stations within the parking garage.
(7) Open Space and Public Amenity Requirements. The PUD Ordinance requires a minimum of 15% of the total Site area (approximately 53,580 square feet, or 1.23 acres) to be developed as publicly accessible open space, including the waterfront promenade, landscaped plazas, and pedestrian connections to the surrounding street grid. The specific open space requirements are enumerated in the conditions of approval (Section III.C below).
(8) Signage Provisions. The PUD Ordinance establishes a signage program for the Project, permitting building identification signage, retail tenant signage, and wayfinding signage in accordance with a master sign plan to be submitted to the Department of Planning for administrative approval prior to certificate of occupancy. The master sign plan must comply with the general sign regulations of the Baltimore City Zoning Code, except as specifically modified by the PUD Ordinance.
(9) Phasing. The PUD Ordinance permits, but does not require, phased development of the two towers. Both towers may be constructed simultaneously or sequentially, at the developer's election. If the development is phased, each phase must independently satisfy the applicable parking, open space, and public amenity requirements attributable to that phase, as determined by the Department of Planning. Based on current Project plans and the GMP contract with Pinnacle, both towers will be constructed simultaneously, commencing in March 2026.
C. Conditions of Approval
Ordinance No. 24-0417 imposes a number of conditions of approval that must be satisfied prior to building permit issuance, during construction, and/or upon completion of the Project. We have reviewed each condition and assessed its current compliance status. The material conditions are summarized below, with a comprehensive compliance status table attached as Appendix C.
1. Infrastructure Improvements. The PUD Ordinance requires the developer to design, construct, and dedicate the following public infrastructure improvements in connection with the Project:
(a) Public Street Improvements. The developer must reconstruct and improve the segment of Wills Street adjacent to the Site (approximately 900 linear feet) to include widened sidewalks (minimum 12 feet), new street trees, pedestrian-scale lighting, and ADA-compliant curb ramps. Additionally, the developer must construct a new public road extending from Wills Street to the waterfront promenade (the "Harbor Access Drive"), providing vehicular and emergency access to the eastern portion of the Site. The plans for these improvements must be approved by the Baltimore City Department of Transportation prior to building permit issuance, and construction must be completed prior to the issuance of the first certificate of occupancy.
(b) Utility Upgrades. The developer must design and construct upgrades to the existing water main and sanitary sewer infrastructure serving the Site, as required by the Baltimore City Department of Public Works, to ensure adequate capacity for the 610 residential units and 45,000 square feet of retail. The developer is also responsible for the extension of stormwater drainage infrastructure to connect the Site's stormwater management system to the public system. Preliminary utility plans have been prepared by the Project's civil engineer and are currently under review by the Department of Public Works.
(c) Stormwater Management Facilities. The developer must design, construct, and maintain on-site stormwater management facilities in compliance with the Baltimore City Stormwater Management Design Manual and the Maryland Stormwater Management Act of 2007, as amended. The PUD Ordinance requires a "green infrastructure" approach to stormwater management, incorporating bioretention facilities, permeable paving, green roofs, and other low-impact development techniques to the maximum extent practicable. A detailed stormwater management plan must be approved by the Baltimore City Department of Public Works prior to grading permit and building permit issuance.
(d) Waterfront Promenade and Public Access Improvements. The developer must design and construct an extension of the existing Harbor Point waterfront promenade along the full length of the Site's waterfront frontage (approximately 650 linear feet). The promenade must be a minimum of 20 feet in width, with a combination of hardscape and landscaping, seating, lighting, and public art installations. The promenade must be dedicated as a public access easement upon completion and must be maintained by the developer or its successors in perpetuity. The waterfront promenade must be completed and open to the public no later than the date of issuance of the first certificate of occupancy.
Compliance Status: Preliminary infrastructure plans have been prepared. Final engineering plans for street improvements and utility upgrades are in progress and are expected to be submitted to the relevant city departments in January 2026, concurrent with building permit applications. The stormwater management plan is under development and has been the subject of preliminary review by the Department of Public Works. The waterfront promenade design is in the schematic design phase. This condition requires ongoing monitoring and coordination with the Baltimore City Department of Transportation and Department of Public Works. No material compliance issues have been identified at this time.
2. Design Review. The PUD Ordinance requires that the final architectural design of the Project, including building elevations, materials, ground-floor retail façade treatment, and landscape design, be submitted to and approved by the Baltimore City Department of Planning's Urban Design and Architecture Advisory Panel ("UDAAP") prior to the issuance of any building permit. The UDAAP review is intended to ensure that the final design is consistent with the design principles and character depicted in the PUD application materials, while allowing appropriate refinement and development of the design during the construction documents phase.
Compliance Status: Schematic design for the Project has been completed by the Project architect and is currently being developed into design development and construction documents. The UDAAP submission is expected to be made in January 2026, with approval anticipated in February 2026. The timing of UDAAP approval is a critical path item for building permit issuance and should be closely monitored. We recommend that the Project architect engage in informal pre-submission consultation with UDAAP staff to identify any potential design issues prior to the formal submission.
3. Affordable Housing / Workforce Housing. The PUD Ordinance requires that a minimum of 10% of the total residential units (61 units) be set aside as "workforce housing" units, defined as units affordable to households earning no more than 80% of the Area Median Income ("AMI") for the Baltimore Metropolitan Statistical Area, as determined by the U.S. Department of Housing and Urban Development. The workforce housing units must be distributed proportionally across both towers and across the range of unit types (studio, one-bedroom, two-bedroom, and three-bedroom), and must be comparable in quality and finish to market-rate units. The workforce housing commitment runs for a period of 30 years from the date of initial certificate of occupancy and must be memorialized in a regulatory agreement recorded against the Site.
Additionally, during the PUD approval process, the applicant voluntarily committed to provide an additional 5% of units (approximately 31 units) as affordable to households earning no more than 60% of AMI. This voluntary commitment was incorporated into the PUD Ordinance as a binding condition.
Compliance Status: The workforce housing and affordability commitments have been incorporated into the JV's financial underwriting and operating pro forma. A draft regulatory agreement is being prepared by this office for review by the Baltimore City Department of Housing and Community Development. The regulatory agreement must be executed and recorded prior to certificate of occupancy, but the commitment must be acknowledged in the building permit application. The JV Operating Agreement should include provisions addressing the allocation of workforce housing costs between Fairwater and Prescott and the impact on development returns. We note that the 92 affordable/workforce units (61 at 80% AMI plus 31 at 60% AMI) will affect projected rental revenue and should be reflected in the pro forma provided to Meridian National Bank, N.A. in connection with the construction loan.
4. Transportation / Traffic Mitigation. The PUD Ordinance incorporates the findings and mitigation commitments from the traffic impact study prepared by the applicant's traffic engineers in connection with the PUD application. The required transportation and traffic mitigation measures include:
(a) Signal timing modifications and signal equipment upgrades at the intersection of Wills Street and Eastern Avenue, to be designed and funded by the developer and implemented by the Baltimore City Department of Transportation;
(b) Construction of a new traffic signal at the intersection of Wills Street and the proposed Harbor Access Drive, subject to design approval by the Department of Transportation;
(c) Installation of enhanced pedestrian crosswalks, ADA-compliant pedestrian signals, and curb extensions at three intersections adjacent to the Site;
(d) Construction of a protected bicycle lane along the Site's Wills Street frontage, connecting to the existing Baltimore City bicycle network;
(e) Implementation of a Transportation Demand Management ("TDM") plan, including provision of transit pass subsidies for residents, bicycle storage and repair facilities, and car-sharing parking spaces; and
(f) Payment of a transportation impact fee of $500,000 to the Baltimore City Transportation Impact Fund, payable prior to issuance of the first certificate of occupancy.
Compliance Status: The traffic signal and intersection improvements are in the design phase and are being coordinated with the Department of Transportation. The TDM plan has been drafted in outline form but requires completion and approval. The transportation impact fee is budgeted in the Project's soft cost estimate. No material compliance issues have been identified, but the signal improvements at Wills Street and Eastern Avenue will require cooperation from the Maryland State Highway Administration if Eastern Avenue is classified as a state highway in this segment, which is under investigation.
5. Environmental / Waterfront Protections. The PUD Ordinance imposes the following environmental and waterfront protection requirements:
(a) Approval of a comprehensive stormwater management plan by the Baltimore City Department of Public Works and, if applicable, the Maryland Department of the Environment, incorporating Environmental Site Design (ESD) to the maximum extent practicable, as required by the Maryland Stormwater Management Act;
(b) Compliance with the Chesapeake Bay Critical Area requirements, to the extent the Site falls within the Critical Area (the 1,000-foot buffer from tidal waters). Based on preliminary review, the Site is located within the Chesapeake Bay Critical Area and is classified as an Intensely Developed Area ("IDA"), which permits development at high densities subject to compliance with the Critical Area program's requirements for impervious surface limits, stormwater management, habitat protection, and buffer management. A Critical Area approval from the Chesapeake Bay Critical Area Commission or its local designee (Baltimore City) is required;
(c) Maintenance of a minimum 100-foot natural buffer from the mean high-water line, except as modified by the IDA provisions and approved by the Critical Area Commission;
(d) Shoreline stabilization measures to prevent erosion and protect water quality during and after construction; and
(e) Compliance with all applicable federal, state, and local environmental regulations, including without limitation the Clean Water Act, the Maryland Environment Article, and the Baltimore City Environmental Control Board regulations.
Compliance Status: The stormwater management plan is under development, as noted above. The Critical Area classification of the Site as an IDA has been preliminarily confirmed by Baltimore City planning staff, but formal Critical Area approval has not yet been obtained. A Critical Area application is expected to be filed in January 2026. Shoreline stabilization measures are included in the preliminary site plans. Environmental compliance is being coordinated with Bayline Environmental Consultants, LLC. This condition requires continued attention and timely filing of the Critical Area application.
6. Public Amenities. In addition to the waterfront promenade and infrastructure improvements described above, the PUD Ordinance requires the developer to provide the following public amenities:
(a) A publicly accessible ground-level plaza of not less than 8,000 square feet between the two towers, designed as a gathering space with seating, landscaping, public art, and programmable event space;
(b) A minimum of two public art installations, selected through a process approved by the Baltimore Office of Promotion & The Arts, with a combined minimum budget of $750,000;
(c) A community meeting room of not less than 1,500 square feet within one of the towers, available for use by neighborhood organizations at no charge, subject to a community use agreement to be approved by the Department of Planning;
(d) A public waterfront access easement recorded against the Site, ensuring permanent public access to the waterfront promenade; and
(e) A contribution of $250,000 to the Harbor Point Community Benefit Fund, payable prior to the issuance of the first certificate of occupancy.
Compliance Status: The public plaza and community meeting room are incorporated into the architectural program. The public art budget is included in the Project's soft cost estimate. The waterfront access easement will be prepared by this office and recorded at or prior to the first certificate of occupancy. The community benefit contribution is budgeted. No material compliance issues have been identified.
7. Timing / Commencement Requirements. The PUD Ordinance contains a commencement requirement providing that construction of the Project (defined as the commencement of foundation work) must begin within 36 months of the effective date of the PUD Ordinance (i.e., by June 14, 2027). If construction does not commence within this 36-month period, the PUD approval shall lapse and the Site shall revert to its prior zoning classification (W-1), unless the developer obtains an extension of time from the Baltimore City Council by ordinance. The PUD Ordinance does not specify a maximum construction completion deadline, but the certificate of occupancy application must demonstrate conformance with the approved PUD plans.
Compliance Status: The current construction schedule targets construction commencement (foundation work) on or about March 1, 2026, which is well within the 36-month commencement deadline of June 14, 2027. However, as discussed in Section V below, building permits have not yet been obtained, and any material delay in permit issuance could push the construction commencement date. We recommend that the JV calendar the June 14, 2027 sunset date and monitor progress against this deadline. Given the current timeline, there is a comfortable margin, but unforeseen permitting delays could compress this window.
8. Reporting and Compliance. The PUD Ordinance requires the developer to submit semi-annual progress reports to the Baltimore City Planning Commission during the construction period, documenting:
(a) The status of construction and percentage of completion;
(b) Compliance with the conditions of approval, including infrastructure improvements, affordable housing commitments, and environmental requirements;
(c) Any modifications to the approved PUD site plan or building design; and
(d) Any issues or delays that may affect the Project's conformance with the PUD Ordinance.
The first progress report is due six months after the issuance of the building permit. The Planning Commission retains the authority to convene a public hearing to review compliance if the reports indicate material deviations from the approved plans or conditions.
Compliance Status: No progress reports are due at this time. This reporting obligation will become relevant following building permit issuance and should be incorporated into the development management procedures under the Development Management Agreement with Fairwater. We recommend that Marcus D. Okonkwo's development team establish a compliance tracking system to ensure timely and accurate reporting.
D. PUD Site Plan and Approved Plans
The approved PUD site plan, a copy of which is attached hereto as Appendix B, constitutes a binding component of Ordinance No. 24-0417. The PUD site plan depicts the location, footprint, and maximum height of each tower, the podium and parking structure, building setbacks, the public waterfront promenade, the ground-level plaza, vehicular and pedestrian access points, parking entry locations, and landscape areas. The approved PUD site plan also incorporates key dimensions, setback measurements, and notations regarding conditions of approval.
Legal Effect of the Approved PUD Site Plan. Under the Baltimore City Zoning Code, the approved PUD site plan has the force and effect of a zoning regulation applicable to the Site. Development of the Site must conform to the approved PUD site plan. Any deviation from the approved plan requires either an administrative modification or a formal PUD amendment, depending on the nature and significance of the deviation, as described below.
Modifications and Amendments. The Baltimore City Zoning Code distinguishes between two categories of changes to an approved PUD:
(a) Minor Modifications. Minor modifications that do not materially alter the character, density, intensity, height, or layout of the approved development may be approved administratively by the Director of the Department of Planning, without City Council action. Examples of minor modifications include adjustments to building footprint locations of not more than 10 feet, changes to façade materials or architectural details that do not affect building height or massing, and reconfiguration of parking layout that does not reduce the total number of parking spaces below the minimum requirement.
(b) Major Amendments. Major amendments that materially alter the character, density, intensity, height, or layout of the approved development require a formal PUD amendment, processed through the same application, public hearing, Planning Commission review, and City Council approval process as the original PUD application. Examples of major amendments include increases in building height beyond the approved maximums, increases in the total number of residential units, reductions in required open space or public amenities, and changes to the permitted use categories.
Implications for the GMP Contract. The GMP contract with Pinnacle General Contractors, Inc. (executed December 20, 2025) is based on the construction documents being developed from the approved PUD site plan and the schematic design. As construction documents are finalized, it is essential that the Project architect and Pinnacle confirm that all design details are consistent with the approved PUD site plan. Any design modifications that emerge during the construction documents phase must be evaluated against the PUD site plan to determine whether an administrative modification or major amendment is required. The GMP contract should include provisions (and we understand that it does) allocating responsibility for any cost increases or schedule delays arising from PUD-related design changes. We recommend that the development team establish a protocol for PUD compliance review of all design changes prior to implementation.
IV. VESTED RIGHTS ANALYSIS UNDER MARYLAND LAW
A. Maryland Vested Rights Doctrine
Under Maryland law, the doctrine of vested rights determines the point at which a property owner's right to develop property in accordance with an approved plan becomes legally protected against subsequent changes in zoning or land use regulations. The vested rights doctrine is a critical consideration for the JV, as the period between JV formation and the issuance of building permits represents a window during which the development rights authorized by the PUD Ordinance are not yet fully vested.
Maryland follows the traditional common law rule that a landowner's right to develop property does not vest until (i) a valid building permit has been issued, and (ii) the landowner has made substantial expenditures in good-faith reliance on the permit. This two-part test has been articulated by the Court of Appeals of Maryland (now the Supreme Court of Maryland) in a line of cases including Prince George's County v. Sunrise Development Ltd. Partnership, 330 Md. 297 (1993), and County Council of Prince George's County v. Zimmer Development Co., 444 Md. 490 (2015), among others.
Under this framework:
(a) Permit Issuance. A mere application for a building permit does not create vested rights. The permit must be actually issued. Similarly, the approval of a PUD, site plan, or subdivision plan, while a significant entitlement, does not by itself vest the right to develop. The PUD approval establishes the regulatory framework for the development, but the actual right to commence construction does not vest until the building permit is in hand.
(b) Substantial Expenditures. Even after a building permit is issued, the landowner must make substantial expenditures in good-faith reliance on the permit before the right to develop is fully vested. The Maryland courts have not established a bright-line test for what constitutes "substantial" expenditures, but have considered factors such as the magnitude of expenditures relative to the total project cost, the nature of the expenditures (site preparation, foundation work, and procurement of long-lead materials are typically more persuasive than soft costs alone), and the irreversibility of the expenditures.
(c) Good Faith. The expenditures must be made in good faith — that is, the landowner must not have been on notice that a change in the regulatory framework was imminent or likely.
The Maryland Land Use Article (Title 4 of the Maryland Code) contains certain statutory protections for approved development plans, but these provisions are primarily applicable to counties and municipalities operating under the Land Use Article's planning and zoning framework. Baltimore City, as an independent city with its own charter and zoning code, is not directly subject to all provisions of the Land Use Article, although Maryland courts have applied the general principles of the vested rights doctrine to Baltimore City in a manner consistent with the Land Use Article's framework.
The Baltimore City Charter, Article VII, Section 1, grants the City Council the power to adopt and amend zoning regulations, including PUD ordinances. The Charter does not contain a specific vested rights provision, but the general common law principles apply.
B. Application to Harbor Point Towers
Applying the Maryland vested rights framework to the Harbor Point Towers project, we note the following:
PUD Approval as a Legislative Act. Ordinance No. 24-0417 is a legislative act of the Baltimore City Council. As such, it is generally not subject to reversal or repeal absent a subsequent legislative action by the City Council. Under Maryland law, a subsequent City Council could, in theory, amend or repeal the PUD Ordinance, but such action would require the same legislative process (introduction, committee hearing, public hearing, Council vote, and mayoral approval) and would be subject to legal challenge by the affected property owner on grounds of reliance, estoppel, or unconstitutional taking. However, the PUD approval alone, without a building permit, does not fully vest the development rights under the traditional Maryland vested rights doctrine.
Pre-Development Expenditures. Fairwater, on behalf of the JV, has incurred and will continue to incur significant pre-development expenditures in reliance on the PUD Ordinance, including: (a) fees paid to architectural, engineering, and consulting firms for design and planning work; (b) legal fees incurred in connection with the JV formation, entitlement analysis, and loan negotiation; (c) deposits under the land PSA; (d) costs of environmental and geotechnical investigations; and (e) other soft costs. These expenditures, which are subject to reimbursement under the Pre-Formation Expenditure Reimbursement Agreement between Fairwater and the JV, constitute evidence of good-faith reliance on the PUD approval. However, under Maryland case law, pre-permit soft cost expenditures alone may not be sufficient to establish vested rights in the absence of a building permit.
Equitable Vesting Arguments. In certain circumstances, Maryland courts have recognized equitable vesting arguments where a property owner has made substantial expenditures in reliance on a governmental approval, even in the absence of a building permit, particularly where the government's conduct (such as the adoption of a site-specific legislative approval like a PUD ordinance) has induced the reliance. While these arguments are not well-established in Maryland law and are fact-dependent, the magnitude of the Project ($576,000,000 total cost, with $240,000,000 in equity and $336,000,000 in construction financing), the specificity of the PUD Ordinance, and the JV's substantial pre-development expenditures would support an equitable vesting argument if the City were to attempt to revoke or materially modify the PUD before permits are issued.
Recommendation. We strongly recommend that the JV move expeditiously to obtain building permits following the execution of the JV Agreement and land PSA assignment. The filing of building permit applications should occur as soon as practicable after JV signing (targeted for January 12, 2026), and the JV should use commercially reasonable efforts to obtain permits in Q1 2026, before the construction loan closing on February 15, 2026, or as soon thereafter as feasible. Obtaining building permits and commencing construction (defined in the PUD Ordinance as the commencement of foundation work) will complete the vesting process and provide the strongest legal protection against subsequent regulatory changes.
Risk Assessment — Pre-Vesting Period. During the period between JV signing (January 12, 2026) and building permit issuance (expected Q1 2026), the development rights are not yet fully vested under Maryland law. During this window, the following risks exist:
(a) The Baltimore City Council could, in theory, amend or repeal the PUD Ordinance, although this would require a full legislative process and would be subject to legal challenge;
(b) The City could adopt new building code requirements, zoning amendments, or regulatory requirements that could affect the Project's design, cost, or feasibility;
(c) A moratorium on development or building permits could be imposed, although no such moratorium is currently pending or, to our knowledge, contemplated; and
(d) Changes in the political environment or administration could alter the City's support for the Project, although the PUD Ordinance was adopted with a strong Council majority (12-2).
We assess the risk of an adverse regulatory change during the pre-vesting period as low, based on the strong Council vote, the absence of any known legislative initiatives that would affect the Project, and the general political support for waterfront redevelopment in Baltimore. Nevertheless, the risk is not zero, and prompt action to obtain building permits is the most effective mitigation.
C. Protection Against Downzoning or Regulatory Changes
As noted above, the primary risk during the pre-vesting period is that Baltimore City could take legislative or regulatory action that would adversely affect the Project before building permits are issued. We have reviewed the current legislative calendar of the Baltimore City Council and the pending regulatory actions of the Department of Planning and other relevant agencies, and we are not aware of any specific initiative that would affect the Harbor Point Towers project.
However, we note the following general considerations:
(a) Building Code Updates. Baltimore City periodically updates its building code to adopt new editions of the International Building Code ("IBC") and related codes. A new code edition could impose additional requirements (such as enhanced fire protection, accessibility, or energy efficiency standards) that could affect the Project's design and cost. Under Maryland law, building permit applications are generally reviewed under the codes in effect at the time of application filing. We recommend filing permit applications as early as practicable to "lock in" the current building code requirements.
(b) Inclusionary Housing Legislation. There is ongoing discussion in the Baltimore City Council regarding the adoption or expansion of mandatory inclusionary housing requirements. If new inclusionary housing legislation is adopted before building permits are issued, it could impose additional affordable housing requirements beyond those already established in the PUD Ordinance. The current PUD Ordinance includes a 10% workforce housing requirement plus a 5% voluntary affordability commitment, which may satisfy or exceed any new inclusionary requirement, but this should be monitored.
(c) Environmental and Sustainability Regulations. Baltimore City and the State of Maryland have adopted and continue to develop environmental and sustainability regulations, including building energy performance standards, electrification requirements, and stormwater management enhancements. Changes to these regulations could affect the Project's design and cost if adopted before permits are issued.
Recommendation — Land PSA Assignment. We recommend that the Assignment and Assumption of PSA from Fairwater to the JV, and the underlying PSA with Harbor East Land Holdings, LLC, include robust representations and warranties from the seller (Harbor East Land Holdings, LLC / Vincent A. DeLuca) regarding the entitlement status of the Site, including:
(a) That the PUD Ordinance is in full force and effect, has not been modified or amended, and is not subject to any pending or threatened challenge, appeal, or revocation;
(b) That the seller has not received any notice from any governmental authority of any proposed zoning change, building code amendment, moratorium, or other regulatory action that would affect the Project;
(c) That the seller has complied with all conditions of the PUD Ordinance that are required to be satisfied prior to land closing; and
(d) That the seller will cooperate with the JV and Fairwater in connection with building permit applications, design review submissions, and other governmental applications pending land closing and for a reasonable period thereafter.
These representations and warranties should survive land closing for a period of not less than 12 months and should be included as conditions precedent to the JV's obligation to close on the land acquisition.
V. BUILDING PERMIT APPLICATION AND TIMELINE
A. Current Status
As of the date of this memorandum (December 18, 2025), building permit applications for the Harbor Point Towers project have not yet been filed with the Baltimore City Department of Housing and Community Development ("DHCD"), which administers the building permit review and issuance process for Baltimore City. The building permit applications are expected to be filed in January 2026, following the execution of the JV Agreement and the assignment of the land PSA, with permits expected to be obtained in Q1 2026.
Responsibility for the preparation and filing of building permit applications rests with Fairwater, in its capacity as development manager under the Development Management Agreement between Fairwater and the JV. Fairwater's development team, led by Marcus D. Okonkwo, EVP, Development, will coordinate the permit application process with the Project architect, the Project's structural, MEP, and civil engineers, and Pinnacle General Contractors, Inc.
B. Required Submissions
The building permit application for a project of this scale and complexity will require the submission of the following documents and plans to the Baltimore City DHCD, Plan Review Division:
(1) Architectural Plans and Specifications. Complete architectural plans and specifications for both towers, including floor plans, building sections, exterior elevations, wall sections, roof plans, and interior layouts. The architectural plans must conform to the approved PUD site plan and incorporate any modifications approved through the UDAAP design review process. The plans must comply with the International Building Code (2021 edition, as adopted by Baltimore City), the International Residential Code (to the extent applicable to dwelling units), and all applicable Baltimore City amendments and supplements.
(2) Structural Engineering Plans. Complete structural engineering plans and calculations for both towers, including foundation design, structural framing, lateral load resistance systems, and connections. The structural plans must be based on the geotechnical report prepared for the Site and must comply with the IBC's structural provisions, including seismic design requirements (Seismic Design Category A or B for the Baltimore area) and wind design requirements.
(3) MEP Plans. Complete mechanical, electrical, and plumbing plans and specifications, including HVAC systems, electrical distribution, emergency power, plumbing systems, domestic water and sanitary sewer connections, and fire suppression and detection systems.
(4) Fire Protection and Life Safety Plans. Dedicated fire protection and life safety plans, including fire alarm system design, automatic sprinkler system design, fire department access and connection points, stairwell pressurization, smoke control systems, and means of egress analysis. These plans will be reviewed by the Baltimore City Fire Department's Fire Prevention Bureau.
(5) Stormwater Management Plan. A detailed stormwater management plan prepared in accordance with the Baltimore City Stormwater Management Design Manual and the Maryland Stormwater Management Act, incorporating Environmental Site Design (ESD) measures. This plan must be approved by the Baltimore City Department of Public Works prior to building permit issuance.
(6) Accessibility Compliance Documentation. Documentation demonstrating compliance with the Americans with Disabilities Act (ADA) Accessibility Standards for Buildings and Facilities, the Fair Housing Act's design and construction requirements (for covered multifamily dwellings with four or more units), and the Maryland Accessibility Code (COMAR 05.02.02).
(7) Energy Code Compliance Documentation. Documentation demonstrating compliance with the International Energy Conservation Code (IECC 2021 edition, as adopted by Baltimore City) or, alternatively, compliance with ASHRAE 90.1-2019 for commercial portions of the building.
(8) Geotechnical Report. The geotechnical report for the Site, prepared by a licensed geotechnical engineer, documenting subsurface conditions, bearing capacity, groundwater conditions, and foundation design recommendations. The geotechnical report has been prepared and will be submitted with the permit application.
(9) UDAAP Design Review Approval. Written confirmation of final design review approval from the UDAAP, as required by PUD Condition No. 2 (discussed in Section III.C.2 above). This approval must be obtained prior to building permit issuance.
C. Review and Approval Process
The building permit review process involves multiple city departments and agencies, coordinated through the DHCD Plan Review Division:
(1) Baltimore City DHCD — Plan Review Division. The DHCD Plan Review Division is the primary reviewing authority for building permit applications. The Plan Review Division reviews architectural, structural, and MEP plans for compliance with the building code, zoning code (including the PUD Ordinance), accessibility requirements, and energy code. For a project of this complexity, the initial plan review cycle typically takes 60 to 90 days from the date of a complete submission. Corrections and resubmissions may add 30 to 45 days per cycle. In our experience with comparable projects, two to three review cycles are common, resulting in a total review timeline of approximately 90 to 150 days from initial submission.
(2) Baltimore City Fire Department — Fire Prevention Bureau. Fire protection and life safety plans are reviewed by the Fire Prevention Bureau concurrently with the DHCD plan review. The Fire Department review typically takes 45 to 60 days and may involve coordination meetings with the Project's fire protection engineer. Issues commonly arising in high-rise residential construction include stairwell pressurization, fire department access to upper floors, smoke control in parking garages, and fire command center design.
(3) Baltimore City Department of Public Works. The Department of Public Works reviews stormwater management plans, water and sewer connection applications, and grading plans. Stormwater management plan approval is a prerequisite to building permit issuance. The DPW review typically takes 60 to 90 days.
(4) Maryland Department of the Environment (MDE). If the Project requires state-level environmental permits (discussed in Section VI.B below), MDE review may proceed concurrently but

MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

I. EXECUTIVE SUMMARY

II. SITE DESCRIPTION AND PRIOR ZONING CLASSIFICATION

IV. VESTED RIGHTS ANALYSIS UNDER MARYLAND LAW

V. BUILDING PERMIT APPLICATION AND TIMELINE

Record

Parties

Dates

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