WILDWOOD CREST – At a raucous June 7 meeting, the Wildwood Crest Planning Board denied a prominent hotelier’s proposal for a beachfront resort after hearing more than seven hours of testimony over the course of two meetings held in front of standing-room-only crowds.
“I’m just shellshocked right now,” ICONA Resorts Chairman Eustace Mita told the Herald after the board’s unanimous denial of his proposed Mahalo Hotel. “As a municipality, where do you go?”
During deliberations, board members mostly focused on the proposed undersized parking arrangement, which they considered unsafe and feared would create an unfair burden on neighbors. Most board members indicated they would be amenable to the proposal if the parking situation was addressed differently.
Mita said he was disappointed by the board’s decision but would not appeal it in court and could not predict what is next for the property, which has sat dilapidated and frozen in time for four summers.
The Backstory
Mita acquired the former Ocean Holiday Motor Inn in 2019 and proposed a project to renovate, adding an additional tower of rooms, moving the pool to the second level, and creating an undersized parking garage beneath the hotel. It was to be called the Mahalo, a select-service offspring of Mita’s acclaimed full-service ICONA chain.
In 2020, Mita’s original plan for the Wildwood Crest Mahalo – which was larger and sought more relief than the 2023 version – was presented to the Crest board and unanimously approved. There was only one public comment made at that meeting.
However, when the motel across the street, the Compass Family Resort, got wind of what had happened, the owners sued the Mahalo, asking the court to reconsider the Planning Board’s approval. A Superior Court judge did uphold the board’s decision, but the Compass owners appealed that ruling.
While the appeal was pending, it was determined the project would require a Coastal Area Facility Review Act (CAFRA) permit from the state Department of Environmental Protection (DEP). In order to meet the CAFRA requirements, the project was pared down.
The DEP did issue a permit and although Compass appealed that, too, the project was ultimately given the green light by the state.
However, since the plan changed from what was originally presented and approved at the local level in 2020, actually becoming smaller – with setbacks reduced along Rosemary Road from the original zero foot ask to 11 feet – it was now considered a new proposal and had to come back in front of the board for fresh consideration.
(ED. NOTE: More background and information on the project’s specifics are available in our prior coverage, here and here.)
Round 2
In April, the first hearing was held in front of a crowd of interested public, a stark contrast to the empty room the Mahalo was previously approved in front of in 2020. After 4.5 hours of testimony, the hearing was continued to June.
A similar size crowd returned then, even though there was no public comment portion during the June meeting.
The Compass was represented by counsel, as an objecting party, during the hearings and presented testimony from two experts, a planner and traffic engineer, who poked holes in the Mahalo plan.
David Shropshire, the traffic engineer hired by the Compass, pointed out some of the parking deficiencies in April. In June, it was planner Peter Steck’s turn.
Under questioning from Compass attorney Nicholas Talvacchia, Steck laid out the problems he saw with the application.
Steck pointed out that the pool deck should be counted toward total lot coverage, something the applicant eventually conceded. Counting the pool, the building covers 85% of the lot, according to Steck’s calculations. Leaving the pool out, it is still around 75%; 40% is what’s allowed by ordinance.
Steck also pointed to the work that had been done, removing the Ocean Holiday’s sundeck, and filling in the pool. He entered a handout into evidence which showed photos of the former Ocean Holiday when it was in operation and the building as it appears now.
Steck said some of the pre-existing conditions that were cited by the applicant to avoid the need for additional variances didn’t exist anymore because of that premature demolition.
He also pointed to the borough’s Master Plan, which acknowledged a need to incentivize hotels to remain hotels and not turn into condos. However, part of the Master Plan also stated a desire to preserve view corridors. To achieve both, hotel owners could renovate up, but not out.
Steck reminded the board that an original Mahalo application actually included a sixth story, but that was dropped from the plan prior to the 2020 hearing. The architect for Mahalo testified it was structurally not feasible, but Steck questioned where the evidence was to support that.
Steck also gave his take on the problems with the parking arrangement, reiterating many of the points made in April by Shropshire.
“This is simply 10 pounds in the 5-pound sack,” he said.
When he finished his testimony, much of the gallery erupted into applause.
Pawlowskis Weigh In
Despite spending tens of thousands of dollars in legal fees and hiring experts to try to stop the Mahalo project, Paul Pawlowski and his brother, George, owners of the Compass, were surprisingly subdued after the board denied the Mahalo application.
“Our team did a good job, but it’s not over,” George Pawlowski Jr. said in an interview.
“I feel that there’s no winners in this long road that we’ve been on. The community, as a whole, is suffering with the fact that there’s this dilapidated building in the heart of Wildwood Crest,” Paul Pawlowski said in an interview.
Both Pawlowski brothers and their father, George Sr., addressed the Planning Board June 7. They pushed back at the notion they weren’t interested in communicating with the Mahalo. The brothers said in an interview after the meeting they would welcome dialogue with the developer that could result in a compromise that would lead them to withdraw their objection to the project.
“We’re open to having a sit down with Mr. Mita and opening up the door to some sort of mediation. We would like to keep our view corridor and not oppose his application. So, the door is open for mediation anytime Mr. Mita would like to sit down,” Paul Pawlowski said.
What’s the Future?
For now, the site will remain an eyesore. Mita said he isn’t sure what his next move is.
“I really got to think about it. This has been a long, expensive process. We’ve had that sitting there for four years. No revenue and the interest meter just keeps ticking,” Mita said. “It’s been a four-year slog. This has been the longest and most difficult application of any of our hotels by far.”
While he did say he would consider modifications to the hotel plan, Mita also mentioned one word that will certainly get some people’s attention.
“We’re just going to have to re-evaluate, go back to the drawing board and see what we do. Maybe it’s condominiums,” he said in an interview.
He said further paring down the hotel plan would be difficult but did sound open to trying to find a way.
When asked if he still had faith in Wildwood Crest for future development, Mita took a pause.
“I’ll say I have faith in Wildwood Crest. I don’t know about development, but I have faith in Wildwood Crest,” he said with a laugh.
Contact the author, Shay Roddy, at sroddy@cmcherald.com or 609-886-8600, ext. 142.
