Gillian: $9M Land Deal’s Dead

OCEAN CITY – A $9-million plan to buy a former car dealership property on Simpson Avenue is dead in the water, according to Mayor Jay Gillian. 
In September, City Council unanimously approved a bond ordinance to fund the purchase from the Klause family.
Gillian and other supporters of the deal argued that this was a unique opportunity to acquire a large open space near the community center.
But members of the Fairness in Taxes group said the price was too high, even while supporting the purchase. FIT launched a petition drive to force a referendum on the bond ordinance. After falling short on the first attempt, it sounds as though the group had gathered enough signatures on a second try.
At the Oct. 23 City Council meeting, Gillian announced that there would be no referendum. The agreement of sale expires Oct. 31.
“This petition prevents the city from completing the purchase before then, so because buying the property is no longer an option, there will be no need for a vote, and I will recommend at the next City Council meeting to repeal the funding ordinance,” Gillian said in his report to council.
He had no further comment on the matter. Council did not discuss it at the meeting. After the close of the meeting, Gillian confirmed that the sale was dead.
At previous meetings, he’s stated that if the city didn’t purchase the property, it would most likely be developed as single-family houses.
Nothing is certain, according to Harry Klause, who owns the property with his brother, Jerry Klause, but that’s the most likely scenario.
Contacted after the meeting, Klause said they wanted to see that land purchased by the city but could not go lower than the $9 million. He indicated that was lower than offers they had received.
“There’s been a lot of twists and turns in this thing. Right now, we’re still constrained by the agreement with the city,” he said. “When that’s all over I guess we’ll figure out what we’re doing. Things will work out,” Klause said.
In a separate interview, Jerry Klause said without a deal with the city, they would develop the property.
“We can sell it to the city, or we can build houses. We have to do something,” he said.
“We’re very pleased with the announcement last night that the mayor and City Council are listening to the taxpayers. By gathering more than 600 signatures, we sent a message to the mayor and City Council that we were not happy with this,” said Dave Breeden, FIT’s vice president, and a retired city employee.
He reiterated that FIT supported the city purchase but believed $9 million was too much, suggesting more negotiation was needed.
“A lot more work needs to be done when it comes to major expenses like this,” he said. “The Klauses and the city have been going at this for about a year. If the Klauses had another offer, I think they would have taken it a long time ago.”
The fight over the property had been a hot topic in Ocean City since September. The property had been used as a car dealership since the 1930s, until the most recent tenants closed earlier this year. The dealership covered most of the block between Simpson and Haven avenues from 16th Street to the parking lot of the Ocean City Community Center at 17th Street.
It falls in a mixed-use neighborhood, with residential properties on one side and a car wash and chain pharmacy on the other.
For years, the city’s largest grocery store stood nearby, but that property became a city recreation field.
There is a single building on the property, which is otherwise a wide, paved lot.
In addition to the Klause brothers, other parts of the property are owned by John Flood, a former City Council president who challenged Gillian for the mayor’s seat this year, and the Palermo family.
After approving the Klause purchase, council approved an ordinance allowing the city to acquire the other properties on the block through negotiation or condemnation.
That ordinance remains in effect unless council amends or repeals that as well.
To contact Bill Barlow, email bbarlow@cmcherald.com.