Ocean City OKs $9M for Former Car Dealership; Residents Call for Delay, Cite Flooding

OCEAN CITY – Despite opposition from residents, City Council unanimously approved a $9-million bond ordinance to fund the purchase of a large portion of a former car dealership at 16th Street and Simpson Avenue. 
At the same meeting, council introduced an ordinance allowing the city to acquire the rest of that block, either through negotiated purchase or eminent domain.
Once Perry-Egan Chevrolet, the original dealership was founded by Emil Palmer in 1933. It closed in February.
The property is under consideration for the site of a new public safety building. For now, the final use of that property has not been decided.
Several speakers took issue with that at the unusually restive meeting, at least by Ocean City standards.
Resident Donna Moore argued that the public safety building in Ocean City should be on high ground, while several neighbors of the site said flooding had been an issue in that area for decades.
This summer, the city approved a $22,250 contract with an architect to develop a conceptual design for a new public safety building at that site. The city has $17.5 million for a new building in this year’s capital plan.
The existing public safety building at 835 Central Ave., which houses the police department, the municipal court and more, is a former school built in 1902. Officials say it is in poor shape, impossible to keep warm in the winter and stifling in the summer.
So far, there is no commitment to build a new public safety building at the 16th Street property, an exceptionally large piece of open space for the barrier island town. The parcel runs to the parking lot of the Ocean City Community Center at 17th Street, between Simpson and Haven avenues. Most of the land is owned by the Klause family, with whom the city has a $9 million agreement.
City attorney Dorothy McCrosson said the city is negotiating for the rest of the former dealership with the owners, the Flood family, and the Palermo family, who were each left a portion of the original Palmer property.
In her presentation to city council, she said the administration wants the land as much to prevent development as to acquire a site for a future city facility.
The owners have the right under a court order to develop 44 small single-family dwellings on the site, what are known in Ocean City as “coastal cottages,” McCrosson said.
“The partnership between and among the owners fell apart at one point,” she said. The Klauses approached the city to offer the land with a firm price of $9 million, McCrosson said.
“The concept for acquiring the property in the first place was to eliminate the possibility that it would be developed for housing and eliminate that density,” she said. Neighbors had strongly stated they did not want to see coastal cottages at the site.
The attorney added that it is no secret that the city is looking at a public safety building there, but the commitment now is only to put the property to a municipal use.
“If I went to the bank and asked for a $9 million loan, the bank would ask me what it was for. And if I replied, ‘I don’t know and I don’t want to tell you,’ the bank would laugh at me. But we the taxpayers are the bank and you’re asking us to give you the money,” said resident Marie Hayes (not the freeholder) during the public comment portion of the meeting.
She suggested the city would not spend that much money on open space, adding that flooding is too bad in that neighborhood for a police station.
“My guess is that whatever would go there is something controversial or you would have already been talking about it. Maybe affordable housing? I don’t know. We don’t know,” she said. “You should be transparent with your plans.” 
McCrosson said there is no plan for affordable housing at the site.
Other residents said their taxes were increasing too much already and cited other city plans, such as a move last year to spend $700,000 on a waterfront property on Tennessee Avenue, which ultimately fell through.
Resident Michael Hinchman went the furthest in his comments, arguing that the appraisals the city had completed on the property were not properly done.
“In the strongest possible terms, I’m going to say tonight to you the two appraisals commissioned by the City of Ocean City are illegitimate, practically fraudulent, and if you use them it’s white-collar crime,” he told council members.
Two appraisals put the value of the land at $9 million and $8.3 million, respectively, according to city officials.
Hinchman said it should be closer to $6 million. He alleged that the appraisals did not properly look at comparable sales and said he would contact the FBI and the state Department of Community Affairs about the matter.
“This is a fraud. This is a fraud in the most naked sense of how you value property,” he said, raising his voice.
Hinchman is the former president of the Ocean City watchdog group Fairness in Taxes, who ran for mayor in 2010, losing to Mayor Jay Gillian who won his first term that year.
He has advocated for the city to establish a finance committee to advise city council, telling members at the meeting that they could not have understood the appraisals because they are not qualified.
Council members took issue with Hinchman’s comments.
“I just want to say, I was greatly offended by the comments of Mr. Hinchman tonight,” said Councilman Bob Barr later in the meeting. “For him to say that we are not qualified to make a decision is wrong.”
Barr said he spent a good deal of time that day going over the bond ordinance with the city professionals. He said Hinchman could have reached out to him to discuss the bond and the appraisals.
“He never does. He’s in ‘gotcha’ mode,” Barr said.
Councilman Keith Hartzell spoke about the public comment policy, arguing that there is a reason for the time limits. Council allows 30 minutes at the beginning of meetings for public comment, which Hartzell described as a convenience for those who did not want to wait until the end of the meeting.
When there are a lot of people signed up to speak, as was the case Sept. 13, Council President Peter Madden limited speakers to three minutes each instead of the usual five minutes.
“If you don’t control that three minutes what happens is what just happened to the last person who talked. Things escalate, to the point the person was escorted out by the police,” Hartzell said.
That’s not accurate, and some members of the public said so at the meeting. At the end of his comments, Hinchman left the room on his own, a fact which other members of council noted, saying Hinchman did not stay to hear the response to his comment from the administration.
But on his way out the door, Hinchman yelled from the back of the room, at which point the police officer at the meeting said, “You can’t. You can’t. You’re done.” Ocean City typically has an officer stationed at council meetings.
The limited time for comments drew annoyance several times during the meeting.
“And this is democracy at its best,” said resident Marlene Sheppard when she ran out of time for her comments.
Donna Moore, who regularly attends council meetings, said the city should hold a public meeting on plans before moving forward on the bond. Further, she said the three minutes allowed for speakers was not enough time.
“Table 18-10 tonight,” she said, referring to the ordinance number.
Council has a rule that only allows speakers to address a topic once.
At the meeting, that meant Madden kept some from speaking at the public hearing on the ordinance if they had already commented at the beginning of the meeting.
Dave Breedan, another council meeting regular, took issue with that, saying the council rules do not trump state law.
“State law allows me to speak at the second reading on an ordinance,” he said. “It doesn’t say in state law that I forfeit that right because I spoke earlier at the council meeting.”
To contact Bill Barlow, email bbarlow@cmcherald.com.