Jul 29, 2014
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City Would Assume Risk on Marina Property

Documents released Wednesday show details of the plan for a marina at Second Street and Bay Avenue.

City Would Assume Risk on Marina Property

In a so-called "revenue-neutral" agreement, the City of Ocean City would pay a private marina operator $135,000 a year to rent its own public property.

That arrangement is outlined in two public documents released on Wednesday (see attached PDFs).

City Council is scheduled to vote to approve the two agreements at a 7 p.m. Thursday (June 28) at .

Council's Thursday vote will determine the fate of a proposal to enter a public-private partnership to develop a marina and public recreation facility on publicly owned open space at Second Street and Bay Avenue in Ocean City.

In presentations to the and , the city administration described an opportunity to attract a private developer to invest in improving the bayfront property at no cost to the city.

Ocean City Marina, LLC — the sole bidder on the project — would pay for improvements to the property (including a public restroom facility and public pier for fishing, launching kayaks and disabled access) in exchange for rights to operate a private marina there.

The proposed agreements provide more detail on the "revenue-neutral" arrangement. The city would pay Ocean City Marina $135,000 annually. The marina would first pay its operating costs then return the next $135,000 in revenue each year to the city.

In essence, the city would be assuming the business risk of operating a 27-slip marina with annual slip fees of $4,200 to $6,300 per year. Because each slip would be equipped with a mechanical lift, the annual fees would be 300 to 400 percent greater than the existing fees.

The marina would have to rent all 27 slips at $5,000 apiece to reach $135,000 in annual revenue.

Only a small handful of boats rent slips from the city at the existing marina, where tidal currents and exposure to the open water of Great Egg Harbor Bay make docking a boat there a challenge. In presenting the proposal, Sean Scarborough of Ocean City Marina said the state-of-the-art lifts would solve that problem.

The proposed agreement would be for 10 years with options to renew for up to three five-year periods. As part of the agreement, the marina would pay the city $102,530 to enter the agreement once all improvements are completed.

The agreement requires that Ocean City Marina have all county and state approvals before it can be executed.

Cape May County owns the property as part of its open space program and is subject to state Green Acres requirements that land remain designated for public use. Ocean City leases the space from Cape May County for $1 annually.

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