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Hotel Plan Returning to Cape May After OC Mayor Says No

An artist’s rendering shows the entry of a seven-story
DAS Architects/File Photo

An artist’s rendering shows the entry of a seven-story, 168-room hotel that Eustace Mita, ICONA Resorts owner and chief executive officer, first proposed for the former Beach Theatre site in Cape May back in October 2021.

By Vince Conti

OCEAN CITY – Eustace Mita, ICONA resorts owner and chief executive officer, plans to bring a hotel proposal back to Cape May after Ocean City Mayor Jay Gillian stated he could not support Mita’s plan for a $150 million to $175 million, ocean-facing resort hotel in that town. 
It is the second time that Mita has shown a willingness to invest at historic levels in the county’s tourism hotel infrastructure only to find his offer rebuffed. 
His pitch for a grand hotel in the style of the early 20th century initially fell flat in Cape May, where City Council put out the word quickly that the governing body was not interested in entertaining Mita’s proposal as part of a redevelopment zone effort on the site of the former Beach Theatre Mita already purchased for $6.7 million in 2019. 
Calling the Beach Theatre area a blighted zone, Mita sought the zoning flexibilities of a redevelopment designation as a way to speed up the project, arguing that such a designation would shave two years off the date when the hotel would start receiving visitors to Cape May.
In both Cape May and Ocean City, Mita’s proposals require what he termed a partnership with the municipality.
The Ocean City site Mita is proposing for development is owned by the city. It is the only potentially available ocean-fronting space of sufficient size for the grand hotel design. 
In Cape May, Mita already owns the proposed site but would need governing body intervention to get the redevelopment zone designation he is seeking. Mita has been clear that he could only do one of these proposals, not both.
Following his Cape May presentation, Mita told the Herald he saw the use of a redevelopment zone as a mechanism to allow specific zoning requirements for a project. It is a method by which the Planning Board can allow exceptions specific to a project without the worry of a potentially broader impact on future zoning applications. It can also speed up state approvals. 
Now, with the likelihood small that Mita can gain the city-owned land he identified as a site for an Ocean City hotel complex, he said he will return his attention to Cape May. 
Mita said his proposal for a grand hotel across from the Cape May Convention Center would establish a symbiotic relationship, benefiting both the hotel and the Convention Center. 
Mita adds that Cape May has lost 50% of the hotel rooms it had in 2000. He maintains that hotel rooms are an essential element in support of both the city’s tourism and the use of its convention facility. 
Mita’s ICONA Resorts has eight current hotel facilities, all in Cape May County. 
“If we didn’t have the other eight properties, we would not be able to even make this proposal,” Mita said. 
The other properties allow him to entertain an investment that will take 10 years to start turning a profit. Mita also points to the results of guest ratings that place ICONA Resorts properties among the most desirable stays in the county and in the top tier of the nation’s 150,000 hotels and motels.  
In Cape May, the conceptual design called for a 168-room hotel that would be part of a seven-story building, including retail shopping on the first floor and a four-story indoor garage with room for 255 valet-parked vehicles. 
Along with the 11 retail stores, the plan called for two restaurants, with one located on the second floor, sharing with a ballroom.  
When asked about the number of negative comments he heard during his September 2022 public presentation in Cape May, Mita said his experience is that early in a proposal of this type, the first to come out and comment are those who are opposed and who are not necessarily representative of the populous as a whole. 
He feels the “not in my backyard mentality” of some residents should not deter the city’s governing body from serious consideration of what would be the largest single development investment in the county’s history.
Mita will still be looking for a redevelopment zone designation for the Beach Theatre property. He said it is the only property with oceanfront access that meets the state requirements for a blighted area. 
For Mita, the designation would be a help to the city, not just to ICONA Resorts. He reiterated that he is not seeking any tax abatement. 
“We will pay all our taxes,” he said. 
One thing that hurt Mita the first time through Cape May last year was a sense that he was seeking an unfair advantage over other developers or even just homeowners who must go through the standard approval process. 
More than once, Mayor Zack Mullock said, “We want what is fair.” 
For Mita, fairness is not defined as one size fits all but rather a careful and detailed consideration of all that this level of investment might mean for the city.
When asked about the rise of short-term rentals (STR) in Cape May and their challenge to traditional hotels, Mita responded that STRs are not attracting the same customer as full-service hotels with many amenities. 
While the room costs may be similar, he said, the STR customer is less likely to spend as much in surrounding city businesses.
Mita’s plans now call for a series of “town hall meetings” with the Cape May public aimed at a better explanation of his proposal and its benefits for the city. 
He hopes to reach a larger and what he assumes will be a more representative segment of the public. His goal is to show how a grand hotel in a historic style can be a boost to Cape May’s future tourism efforts. 
Contact the author, Vince Conti, at vconti@cmcherald.com.

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