Ocean City Moves Toward $9 Million Purchase Of Car Dealership Lot

OCEAN CITY, NJ — Ocean City Council took a step toward the potential $9 million purchase of the car dealership lot across from the Ocean City Community Center Thursday night. At the end of the night, one key question remained: what will the city use the property for?

Ocean City Council approved a proposed ordinance on introduction to appropriate $9 million, including the borrowing of $8,550,000 in bonds or notes, for the acquisition of the property at its meeting Thursday night. The public hearing and final vote is scheduled for the Sept. 13 meeting.

The city would purchase “the majority” of the property. It would purchase 1.856 acres (80,850 square feet) of the lot from Klause Enterprises. The purchase doesn’t include separate lots in the same block, which are already owned by the city, Palmer and the Palermo family.

City Solicitor Dorothy McCrosson said the administration would like to ultimately own the whole lot. First, it will have to decide what to do with the portion under consideration.

“This is a rare opportunity to acquire a multi-use site that could benefit everybody in Ocean City,” Mayor Jay Gillian said in a statement that was distributed to the media before Thursday’s meeting, which Gillian wasn’t available for. “The property could be used for open space, parking, recreation or as a home for a new police station. What we don’t want is more housing. Under former zoning laws, the site could have been developed to include 29 coastal cottages, in addition to one larger, single-family home.”

In her comments, McCrosson noted that it could be used for housing, if that housing were implemented at a higher density.

Last month, Ocean City reached an agreement with the Fair Share Housing Council on an obligation of 1,687 low- and moderate-income units by 2025. The city has outlined a plan for where to put the housing, and you can read about it here.

“That area floods all the time,” one resident said during the public portion of the meeting, speaking about the possibility of putting housing there. “If the land is raised, flooding becomes someone else’s problem. What if no one buys housing there? Does that become the taxpayer’s problem?”

She was concerned with a consent agenda resolution that was passed Thursday night regarding “any shortfall associated with the provision of affordable housing as set forth in the city’s Housing Element and Fair Share Plan.”

A portion of the cost is expected to come from developer’s fees and other sources, but the resolution states that in the event of a shortfall, Ocean City will secure funding “from all sources” to cover that shortfall. Residents are wary that translates to a tax increase, and a couple of them spoke out on the issue.

“If the Affordable Housing Trust Fund is insufficient, taxpayers are on the hook for it,” one resident said, also questioning how it would be dealt with in the future.

Councilman Michael DeVlieger reiterated that Ocean City, as well as municipalities across the state, must conform to the affordable housing obligations that have been handed down this year.

In his statement, Gillian noted that the city signed a tentative agreement concerning the property on May 29, which was nearly two months before Ocean City’s affordable housing obligations were finalized. The city is currently conducting environmental and structural reviews as part of its due diligence period.

“Any environmental condition would be mitigated by the seller,” Gillian said. “The city hopes to complete the acquisition by the end of October.”

DeVlieger also said the site would be a good place for a public safety building. Gillian specifically addressed the possibility of a police station in his statement when he said, “A preliminary structural review indicates that a portion of the existing structure could be repurposed,” Gillian said. “Any new construction, including a second floor, would require pilings. No decision has been made on moving forward with this plan.”

Councilman Keith Hartzell said if the city uses the property for a new public safety building, that would explain a consent agenda resolution also passed on Thursday night amending the budget. A line item was added for the acquisition in the budget, with the money to be transferred from the public buildings portion of the budget, including the possibility of a public safety building.

He also said that if you asked Ocean City residents what they would want it to be used for, the popular answer would be open space. Councilwoman Karen Bergman acknowledged a lack of open space in Ocean City in her comments, and DeVlieger and Hartzell both noted the possibility of getting Green Acres funding from the county for that purpose.

McCrosson cautioned against assuming the county will approve funding for that purpose.

“We have to assume we will pay for this through bonding and not get reimbursed,” she said.

Whereas Hartzell and Councilman Bob Barr have questioned the city’s desire to purchase land before deciding how to use it in the past, that wasn’t the case in this instance. Barr called this particular purchase, “a good opportunity for the city.”

“We’re getting this at fair market value, and the owners want us to do something for the public good,” Hartzell said, calling this situation “uniquely different.” “There’s a multitude of things we can do with it that will make sense. I look forward to considering all the different options and making a decision.”

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