Ocean City Offers $6.5 Million For Former Car Lot

OCEAN CITY, NJ — The City offered $6.5 million to buy the land of a former car lot. The City made the property owners an offer Oct. 4 for the 1.967 acres next to the Ocean City Community Center.

The City is continuing "good-faith negotiations" with property owners Klause Enterprises, City Solicitor Dorothy McCrosson said at Thursday's City Council meeting.

The City has hoped to purchase the property and utilize it as open space. Officials would hold a public meeting about how to best use it once acquired.

McCrosson did not publicly reveal a price figure in her report to City Council. But Fairness In Taxes, a local watchdog group, obtained a letter with an offer from the City.

In the letter dated Oct. 4, the City offers Klause Enterprises $6,545,000 for the property.

"In the event that the City receives no response to this offer within fourteen (days) of the date of this letter, we will assume that settlement by agreement cannot be reached and condemnation proceedings will, as a matter of necessity, be instituted," wrote Michael J. Ash, an attorney representing the City in condemnation matters.

City officials have publicly stated that they would prefer to reach a deal with the owners but will look to condemn it as a backup plan. To condemn a property, New Jersey municipalities must issue a 14-day notice or letter giving their best and final offer. If an agreement isn't reached in that time, the matter goes before a court.

The 14-day deadline passed in October, and it is unclear how that affected negotiations. A city spokesperson did not respond for comment in time for publication.

McCrosson said at Thursday's meeting that the City is in the "very preliminary stages" of negotiation.

"We’re exchanging information, fielding questions, proving documents and answers," she said. "So it may seem like nothing is happening, but there is a lot going on."

The former Perry-Egan dealership closed for good in January 2018. Council tried to purchase the property last year for $9 million. But Fairness In Taxes successfully petitioned for a referendum on the sale, and the seller ended the deal.

City Council passed an ordinance again last August to enter negotiations for the property.

Since then, the Planning Board approved the company's proposal Oct. 2 to build a 21-home development on the property.

The City's Oct. 4 offer is based on two appraisals:

• $6 million on Aug. 9 from Integra Realty Resources
• $6.5 million on Sept. 11 from Northstar Appraisal Company

Fairness In Taxes President David Breeden criticized city officials at Thursday's council meeting for their negotiations.

"Just because they’re selling the property, selling lots, it does not increase the property value," Breeden said.

John Flood, who owns property nearby, has told Patch the City is negotiating a purchase of his land.

"The City and my family are engaged in discussions about the City’s potential purchase or taking of my family’s properties," Flood said in an email statement. "I am not at liberty to disclose the specifics of those discussions at this time."

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