Council Approves Property Purchase As Petition Debate Continues

OCEAN CITY, NJ — A petition aimed at delaying the $9 million car dealership lot across from the Ocean City Community Center is progressing well, according to one of the people who is helping collect signatures for the petition.

Marie Hayes said the group has been all over the city getting signatures for the petition, but there were no solid numbers to report as of Monday morning, Oct. 1. About 400 signatures — 10 percent of registered voters in Ocean City — are needed by Oct. 10.

The petition would then need to be certified by the Ocean City Clerk. The petition calls for a referendum on the purchase of the lot, which would likely go before the voters in the spring.

On Sept. 13, Ocean City Council unanimously approved a proposed bond ordinance to appropriate $9 million, including the borrowing of $8,550,000 in bonds or notes, for the acquisition of 1.856 acres (80,850 square feet) of the lot from Klause Enterprises. The city has not come to a decision on what to do with the property.

On Sept. 27, Ocean City Council unanimously approved a proposed ordinance to acquire the rest of the lot by purchase or condemnation. No price tag was included in the proposal.

The basis for the petition is an argument made before the Sept. 13 vote on the proposal by former president of the watchdog group Fairness In Taxes, Michael Hinchman, that the appraisals the city relied upon to come up with the total overestimate the value of the property.

In a statement previously distributed to the media, Gillian said the city received two appraisals on the property. Two appraisals determined the market value to be $9 million and $8.3 million, an 8.8 percent variation, Gillian said. In his comments during the public hearing, Hinchman said the variation was more than 10 percent.

The petition was launched by David Hayes, David Breeden and Hinchman. FIT is supporting the petition, according to current FIT President Jim Tweed.

“We support efforts to purchase the property,” Tweed told council at the Sept. 27 meeting. “The price is the question.”

Tweed said he understands the city can’t buy the property if the owner won’t sell it, but he and other members of the public questioned why part of the property can be acquired by condemnation and the other can’t. City officials explained condemnation — commonly known as Eminent Domain — isn’t a simple process.

Mayor Jay Gillian cited a property at 9th and Bay the city had tried to gain through Eminent Domain, but that process was halted by a judge who told both sides to “figure it out.” The city ended up paying more than what that property was worth, Gillian said.

The city administration has said it wants to purchase the lot to prevent development on the property.
The entire lot was originally slated to be the site for 44 Coastal Cottages, but that never materialized. The Klause Family then offered to sell the city the portion of the lot covered by the bond ordinance for $9 million.

According to the city administration, the family had obtained a court order that would permit the development of 29 Coastal Cottages and a single-family home on their portion of the lot. The rest of the lot that was covered in the proposal approved on Sept. 27 belongs in part to the Palmer Family and in part to the estate of Nicholas Palermo Sr.

Jerry Klause appeared before council and explained why he wanted to offer the property to the city for $9 million when he believes he would make more money selling to a developer.

“My grandparents moved to Ocean City about 100 years ago,” Klause said. “Nothing ever came easy for them. … The KKK tried to force my grandfather out of town, but he didn’t go. He was buried here. When I approached the city about buying this property, I told them my grandmother would want the city to own it.”

He went on to discuss the variety of things the lot could be used for, including open space.

“People think this is too much money,” Klause said. “You can want the property and not have housing or you can want to not pay too much money, but you can’t have both.”

Councilwoman Karen Bergman said she’s spoken to a number of people at various, unrelated functions, who support Ocean City’s purchase of the property.

“I believe it’s best for the community as a whole,” Bergman said. “That’s what people have told me. I feel confident that it won’t pass through referendum anyway.”

Residents argued that the money can be better spent on other issues, including flood mitigation. One resident was upset about a clause in the contract that calls for the property to be named after the family.

Councilman Mike DeVlieger said that if the petition succeeds and a referendum is held in the spring, during that delay, the Klause Family could decide to sell to a developer.

“If this petition stops this purchase and housing goes up there, I know exactly what to call it,” DeVlieger said. “I would call it all the names that are on that petition. Every single person, so we can say yes, you are responsible for this.”

Marie Hayes said the petition gives the people a say in the process.

“People are glad to have a say,” she told Patch Monday morning. “This gives them a chance to put democracy in action.”

For more on the petition, visitfairnessintaxes.com.

See related:
Petition Aims To Block $9 Million Car Dealership Lot Purchase
$9 Million Purchase Of Lot Stops Unwanted Housing, Officials Say
Ocean City Moves Toward $9 Million Purchase Of Car Dealership Lot

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