WILDWOOD CREST – A proposed Wildwood Crest hotel project, nearing final approvals, will change the character of the town’s carefully thought-out hotel and motel district.
The old Ocean Holiday Motor Inn, at the corner of Rosemary Road and Ocean Avenue, has sat dilapidated since it closed after summer 2019. It was purchased by new, deep-pocketed ownership with a track record of investing big on renovating newly acquired properties and turning them from familiar but often declining casual beach hotels into first-class resorts.
The buyer, Eustace Mita, owns ICONA Resorts and planned to launch a new brand, Mahalo Hotels, at the property in the Crest, according to his testimony before the Wildwood Crest Planning Board. Instead, construction there has remained frozen after a lawsuit brought by a neighboring motel initially stalled the project, and it was later determined the development would require state Department of Environmental Protection (DEP) approval.
While the project would be a stunning transformation of the property, it will also create a lasting precedent that will eliminate the open space and so-called view corridors that have long been part of the Crest’s Master Plan and helped create the spacious feel that has made the town such an attractive community for so many.
The Jersey Shore barrier islands aren’t getting bigger. Planning has been paramount to the success and identity of different towns. Avalon’s decision not to develop its high dunes, Cape May’s decision to preserve its Victorians and the Crest’s commitment to open space have each had lasting impacts on the desirability, and, in turn, real estate values in each of those towns.
After an almost three-hour hearing March 4, 2020, in front of the Wildwood Crest Planning Board, and with only one member of the public present, years of careful planning in that borough were undone.
The Planning Board approved Mita’s proposal for the Crest property in a 7-0 vote, allowing 18 variances, including taking the setback to 0 feet for the length of property along both Rosemary Road and Ocean Avenue.
The plan also included the addition of a new, five-story tower that meets the existing motel, forming an L-shaped structure, by extending the building along Ocean Avenue to the corner.
The plan also created a parking garage on the ground floor and relocates the pool to the second floor, filling the remaining space unoccupied by the “L” of hotel rooms. Mita did not respond to an interview request for this article.
The longtime owner of the Compass Family Resort, a motel directly west of the Mahalo project, across Ocean Avenue, sued the Planning Board and Mahalo, claiming the process used to grant the 18 variances required wasn’t above board and arguing the proposal’s design disregards the borough’s Master Plan. They asked the court to reverse the decision of the Planning Board.
The lawsuit was not successful. Superior Court Judge Stanley L. Bergman Jr. ruled in 2021 that the Planning Board did not act arbitrarily or unreasonably. That decision is being appealed, but the litigation is now on hold, since it would be rendered moot if the DEP does not grant the Coastal Area Facility Review Act (CAFRA) permit required to begin construction.
The Master Plan
A plain reading of the borough’s current Land Use Plan, adopted in September 2005, makes clear that maintaining view corridors in the hotel/motel districts, in which the Compass and Mahalo are located, is a priority.
These view corridors are created by required setbacks, which force hotels to adopt a certain layout, where the rooms are furthest from the streets that run east to west, with the pool in front of the rooms and nose-in parking in front of the pool.
This layout creates wide open streets, so from blocks away, the view to the beach is relatively unobstructed. A zoning ordinance reinforces this objective by requiring 30-foot front yard setbacks.
A reexamination of the Master Plan was completed in 2012. In it, the issue of motels being lost to condo conversions was covered, and a desire to provide incentives and flexibility to those looking to rehabilitate existing motels was stated, so that the borough could maintain a hotel/motel district.
The borough decided to give hotels the ability to renovate up, adding rooms by adding height, but ensuring they maintain their current footprint.
“No renovation or addition may encroach further into the setbacks. This is a key condition since the tradeoff for increased height is the preservation of the view corridors toward the ocean,” the document states.
An early rendering of the Mahalo project included an added floor; however, that disappeared before it was brought in front of the Planning Board for approval.
The Approval
The application for the project was originally scheduled to be presented at the Planning Board’s November 2019 meeting. However, according to a transcript of that meeting, attorney Frank Corrado, appearing on behalf of the Mahalo, said it was his understanding the board would need more time to review the application and the hearing would have to be continued.
Corrado asked the board to continue the application and waive any requirements of re-notice for the next meeting, which was to be held in December 2019. Laws require property owners within a certain proximity to be notified if a planning board will hear an application in their neighborhood. Corrado did not respond to an interview request for this article.
The board granted both of Corrado’s requests and announced the continuance to the assembled crowd, including the Compass owner George Pawlowski Sr. and other interested local hotel owners.
In December 2019, Pawlowski said he returned to Borough Hall at the time the hearing was scheduled to continue but saw that all the lights were out and that there was no activity in the building and left to go home.
The board said later in court documents that the meeting was cancelled because the board had been notified in writing that the Mahalo application would again need to be continued and there were no other applications on the agenda that night. Other hotel owners also testified they arrived for the meeting but turned away before seeing the notice.
The board said it met its legal obligation to tell the public about the meeting change by publishing a legal notice in The Press of Atlantic City two days before and posting a sign on the door that night.
Corrado said in court that he emailed Pawlowski and, as a courtesy, informed him of the continuance but received no reply. The Pawlowskis say that wasn’t adequate and they don’t check the company email address in the offseason.
Pawlowski’s children, George Jr. and Paul, said this was a kick-the-can-down-the-road strategy on the part of Mahalo and the Planning Board to try to thin out the crowd and put the application in front of the board when no one would know to be there to object to it.
The matter was called and continued twice more, in January 2020 and February 2020.
A presentation was made in March 2020, after which all seven present Planning Board members voted to approve the application. Pawlowski and other neighboring hotel owners said they were not present at that meeting because they did not know the Mahalo project was on the agenda.
Mita testified to the Planning Board at the March 2020 meeting that the proposal before the board was the sixth iteration. He said it would be a major investment at $15 million and that they had worked hard to take into account the board’s feedback.
Mita also testified one of the reasons he picked Wildwood Crest for the project is that he is such a fan of the borough’s Master Plan.
“Whoever laid out the Master Plan in Wildwood Crest way back when, I think, just did a fabulous job,” Mita told the board. “I just think the layout here is great.”
Planning Board members spent the majority of their questions at the hearing on issues like the signs, the lighting in the parking garage, the location of the bike racks and dumpsters, and parking.
The fact that the project defies the Master Plan was hardly mentioned.
Patrick Davenport, the chairman of the Planning Board, expressed his concerns with the 0-foot setback off of Rosemary Road during the hearing.
“In Wildwood Crest, the board has always fell back on the… issue of the setbacks of these view corridors of looking down the streets… we are definitely going to lose that on Rosemary Avenue under this existing plan,” Davenport said at the meeting, according to an official transcript. Davenport declined to be interviewed for this article.
Later in the meeting, Davenport and Planning Board members Joyce Gould, David Thompson, Barbara Hunt, Jerry D’Antonio, Peter Cava, and Angela Daniels approved the application unanimously.
Two of the board members present at the original November hearing, Brian Melchiorre and Joseph Schiff, were not at the March meeting when the application was granted. Member Thomas Alvarado was absent from both proceedings.
The only Planning Board member who agreed to be interviewed about the project was Thompson. He said he stood by his vote and that this was a positive for the town. Gould also took some questions on it but said she did not remember the application presentation.
Niru Dhruva, who has his own interest in hotel development on the island, testified at the meeting that he was the only member of the public present before the board approved the application, according to an official transcript.
DEP Weighs In
After getting Planning Board approval, Mahalo found it would be anything but smooth sailing. Aside from the lawsuit, which stalled things for more than a year, the DEP informed the applicant that the project would need a CAFRA permit.
In the CAFRA application, Mahalo altered the plans, something it told the Planning Board could not be done. It reduces the setback along Rosemary Road, from 0 to over 8 feet, but still falls far short of the 30-feet required by ordinance.
The DEP held a public comment period on the application, which ended March 31.
“Based on public comment, the program asked the agent for additional information demonstrating how the project meets the scenic resources and design rule,” according to Larry Hajna, a DEP spokesman.
The DEP’s scenic resource and designed rule, found on page 378 of the department’s Coastal Zone Management Rules, states, “New coastal development that is visually compatible with its surroundings in terms of building and site design, and enhances scenic resources, is encouraged. New coastal development that is not visually compatible with existing scenic resources in terms of large-scale elements of building and site design is discouraged.”
All surrounding motels seem to adhere to the Master Plan. Mahalo submitted the requested information to the DEP, who is now reviewing the application with a decision deadline set for May 27, Hajna said. The additional information was not provided to the Herald before deadline, after a public records request was submitted to the DEP.
Even if the DEP approves the project, Mahalo may have to bring the modified plan back in front of the Planning Board for reapproval to begin construction. If that becomes the case, there will likely be many more than one member of the public in attendance. For this precedent-setting project, there should be great public participation.
By granting such far-reaching variances, the Planning Board effectively changed the Master Plan. How could the board justify a “no” to the next developer, who wants to push their project to or near the property line and diminish view corridors after approving this one?
Over the decades, the Crest has been making changes to its Master Plan in order to increase openness. This Planning Board decision negates those efforts. Planning Board reviews of projects should be to grant minor variances consistent with a community’s Master Plan. In this instance, the Planning Board decided on something, the effects of which may be felt for generations. It could signal the end to a thoughtful Master Plan design, which the developer himself said drew him to develop in the town.
Project-related decision-making will diminish the town’s appeal to its residents and visitors and ultimately undermine developer interest in the Crest.
To contact Shay Roddy, email sroddy@cmcherald.com.
ED. NOTE: This analysis was created by Shay Roddy, with input from the Herald’s editorial board.
