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OC Moves to Fund Property Purchase

A file photo shows demolition of a former car dealership. Plans call for the area to be used as open space

By Bill Barlow

OCEAN CITY – Ocean City Council introduced three bond ordinances Jan. 23 to fund the acquisition of more than a city block of property on Simpson Avenue. Taken together, the bonds total close to $11.9 million.
Situated between the city’s community center and a recreation field that was once home to a supermarket, the land served as a car lot for generations.
The car dealership shut down in February 2018, and since then, much of the property has been considered for residential development.
The city has sought to purchase the land for years. Officials with Mayor Jay Gillian’s administration have said the city will either negotiate a purchase price for the property or use eminent domain to acquire it for fair market value.
Plans call for the area to be used as open space, along with some additional parking for the community center, which houses the city’s library, fitness center, museum, art center and senior center.
The first ordinance authorizes spending more than $6.5 million to cover the purchase of the largest section of the property, including several lots in the 1600 block of Haven Avenue, owned by the Klause family.
Council approved a bond covering a $9 million purchase of that property in 2018, but that was scuttled when the organization Fairness in Taxes (FIT) gathered enough signatures on a petition to force a referendum on the ordinance. FIT representatives said, at the time, they supported the purchase, but argued the price was too high.
City officials said the price was supported by independent assessments. In December 2019, before the introduction of the ordinances, Dave Breeden, FIT president, said the delay saved the city $2.5 million. Also, he argued, owners Klause Enterprises funded the demolition of the building at the site rather than leaving that to the city, saving more money. He has maintained that the city was set to pay an inflated price for the property.
At the meeting, city Attorney Dorothy McCrosson said the difference in the bond ordinance is down to a change in the appraisals. When the appraisals were completed in 2018, she said, the property was planned for housing units known as coastal cottages, which would allow more units on the land.
The zoning ordinance has since been amended to remove the coastal cottage style. Since then, she reported, the owners have received Planning Board subdivision approval for single-family houses, which includes fewer units.
“Whether the court agrees with us remains to be seen,” she said.
If the city and the owners do not reach a negotiated deal and the city condemns the land, the fair market value for the property would be established in court.
“We continue to be in negotiations for the purchase of the property, but whether we negotiate a contract or we have to take the condemnation route, funds have to be put in place,” McCrosson said.
“Just for clarity’s sake, we have to follow what the appraisal is. We had to do it the first time and we have to do it the second time,” said Councilman Keith Hartzell.
The city has an ordinance that requires two appraisals for a property purchase of this magnitude, McCrosson said. If the appraisals do not agree on the value to within 10%, a third is required. She said the current appraisals fall within the 10%.
Councilman Tony Wilson said he was happy to support the ordinance.
“I don’t believe anyone wants to see anything other than one continuous piece of city-owned property from 15th Street to 20th Street, end of story,” Wilson said. That stretch includes the Ocean City Intermediate School.
A second $3 million bond ordinance covers the cost of property on the other side of 16th Street, adjacent to the Emil Palmer Park, used for lacrosse. That property is often referred to as “the truck lot,” owned by Palmer Center, LLC.
Negotiations also continue on that purchase, McCrosson said.
A third ordinance is for $2.34 million for an additional property in the block between 16th and 17th streets, on the corner of 16th Street and Haven Avenue.
A public hearing and final vote are set for the three bond ordinances Feb. 13. That meeting starts at 7 p.m. on the third floor of City Hall, 861 Asbury Ave.
City officials plan to hold a town hall meeting on plans for the land, which is an exceptionally large piece of property for Ocean City. So far, that meeting has not been scheduled.
To contact Bill Barlow, email bbarlow@cmcherald.com.

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