Legal Hurdles Not Enough To Deter Hotel Project

OCEAN CITY — The little red flags marking where the foundation pilings are to be drilled on 64th Street seem to indicate a local property owner will not be waving the white flag of surrender anytime soon.

Despite the town of Ocean City’s desire to condemn and acquire his property for future wastewater facility expansion, Rick Laws made good on his earlier promise to move forward with his plans to build a 104-unit hotel on the site of the old Slide N-Ride, as crews began work on the hotel this week.

Last August, the City Council voted 6-1 (with Councilwoman Margaret Pillas in opposition) to move forward with condemnation proceedings in hopes of acquiring the land that abuts the currently maxed-out wastewater treatment plant. Officials have said all along that it is vital for the town to acquire the land and were more than willing to compensate Laws for the property at market value, but according to Laws, no offer for the property has ever been made.

Laws told The Dispatch in August that the town had voted to seize the property without making an offer to him for the property, and this week, he said there are still no offers on the table.

“There have been no negotiations as of yet, and I haven’t heard anything from the town of Ocean City,” said Laws. “So, we are moving forward with the project, which was delayed a little because we were trying to get funding and, of course, the recent weather, but now that we have [funding], we plan to have the hotel done and open in less than a year.”

Laws had alluded that he was hoping to get a national hotel chain to go into the five-story, 104-unit hotel, and announced this week that a deal with the Hampton Inn chain had been reached.

Some might say that Laws’ move is risky as if a judge and jury find that the town’s desires for the property are the “highest and best use” for the site, more so, than the hotel project, Laws’ investment could be in vain. Laws, however, disagrees.

“I don’t think it’s a risky move at all,” he said. “They are going to appraise the property on the first day of the trial, and whatever is sitting on the site at that time will figure in, so I think I would be compensated for whatever we have invested to that point, but we are going to have to wait and see how things go.”

Tentatively, the pre-trail settlement hearing is slated for late April, and the official trial is said to be in August, according to Laws and City Solicitor Guy Ayres.

“By the time it gets to trial, there is going to be a good bit of a hotel there, as we plan to be open in February of next year,” said Laws.

Ayres, on the other hand, said that the town has provided Laws’ attorney with documents that would indicate a least a desire to negotiate and settle prior to trial.

“The town would love to get this resolved and have said that we are more than willing to pay market value for the property,” said Ayres. “The town isn’t looking to just take a property away from Mr. Laws, but the fact of the matter is that the town desperately needs this property for wastewater expansion.”

Ayres noted that in order for Ocean City development to proceed past the scope of where it has already grown to, the town would have to address additional wastewater flows and its ability to treat it. Ayres said that currently, the town has seemingly “nowhere else to go” with its current facility and perhaps if it doesn’t get Laws’ property, the options for wastewater expansion are severely limited.

“It’s unfortunate that it has to be this way, and I’m sympathetic with Mr. Laws and his situation, but in some cases, government needs property to grow as a municipality and this is one of those cases,” Ayres said.

Historically speaking, the town has seized land through condemnation proceedings a number of times, including the 1979 acquisition of the neighboring parcel, which is now the headquarters the Public Works Department, on 64th Street from the Larmore Corporation, which owned and operated Playland Amusements.

At the time, the land was acquired for reportedly $1 million, although that land is essentially priceless now, according to City Manager Dennis Dare as it is the headquarters for essentially everything that makes the town tick.

In several other cases, such as the 1990 acquisition of a 4th Street property for a town parking lot and the 2002 acquisition of a property owned by the Downtown Brewing Company at the base of the Route 50 bridge, which was transformed into the current off ramp onto Philadelphia Avenue, the properties were considered to be in disrepair and were seemingly easy decisions for what was the aforementioned highest and best use.

Although the 2002 case was the only one that actually made it to the court trial, some point to the fact that Laws’ new hotel project put up against the town’s desire for wastewater expansion will be a much more difficult decision for a judge and jury for what will in fact be the best usage of the property.

“Usually, condemnation proceedings are under two categories,” said Ayres. “One is if a property or a neighborhood is deemed to be blighted or run down, and two if a property is needed for public use. In the two most recent cases, although the properties may have been deemed to be leaning towards the blighted category, they also fell into the ‘need for public use’ category. The 64th Street property, regardless of what is sitting there, is going to be in the ‘need for public use’ category.”

Ayres also noted that the judge would determine the highest and best use for the property, while the jury would determine the value of the property after testimony from the appraisers.

Last year, the property appraised in the ballpark of $3 million, and even if the property is appraised again prior to trial, Ayres believes that based on the current assessments, it more than likely won’t go any higher.