OCEAN CITY — With an eye to the future, resort officials on Monday approved the purchase of the downtown post office property for just over $1.3 million, despite concerns raised about the transaction’s potential impact on the town’s bottom line and the tax rate.
On Monday, the Mayor and Council approved on second reading the purchase of the commercial property at 410 Philadelphia Ave. that is currently home to the U.S. Post Office’s downtown Ocean City branch. The property was made available for sale by the private owner whose husband passed and left it in his estate.
The council voted to purchase the property for about $1.35 million, which will be paid for with the issuance of a 10-year bond sale in that amount. However, the U.S. Post Office currently has a five-year lease on the property and the rent the post office pays to the city will contribute a substantial portion of the city’s annual bond payment, at least for the first five years.
The long-term plan is to utilize the property to expand the town’s existing municipal parking lots in the area of 4th Street. However, at least one member of the community questioned the sale. During the public comment period on Monday, resident Ellie Diegelmann went into a lengthy dissertation on the $1.35 million purchase’s potential impact on the tax rate and the lack of necessity for more parking in the downtown area.
However, Mayor Rick Meehan countered with a lengthy dissertation of his own outlining how the property could eventually expand parking in the downtown area or be used for other purposes for the benefit of the residents and visitors. Meehan said the transaction represented a good bargain for the resort with the post office lease contributing much of the debt service at least through the first five years.
“From time to time, the Mayor and Council have determined that there is property which, if purchased, would benefit the citizens of Ocean City,” he said. “That’s a decision of the Mayor and Council and it’s based on their research, based on economic benefit and based on the needs of the city.”
When questioned about the need for the property, Meehan cited other examples of similar purchases over the years that weren’t always popular at the time they were made.
“There are numerous examples of that,” he said. “Go back to the time when the city purchased the property at 65th Street. A lot of people thought that was a purchase that shouldn’t have been made at the time. Can you even imagine how we would operate this city today if we hadn’t purchased that property at 65th Street where our Public Safety Building and our entire Public Works complex is? We would not have been able to operate and grow this city or supply the services our residents and visitors expect.”
Meehan said another example of the city having the foresight to make a significant land purchase was the bayside property that houses the Northside Park complex.
“When we purchased the property at Northside Park, there were many people who thought, ‘why would you purchase that property?’ Again, the council at that time had the vision and the ability to look into the future and determine that purchasing that property in the long term would benefit the citizens of Ocean City. Northside Park is something all of us enjoy, residents and visitors alike. Can you imagine if we didn’t purchase that property and we didn’t have Northside Park? There have been numerous examples over the years.”
Diegelmann called into question the need for more municipal parking in the downtown area and pointed to the Inlet lot and other lots at Worcester Street, for example, as sufficient to meet the needs. However, Meehan said adding more municipal parking at 4th Street will direct more foot traffic further up the Boardwalk.
“The lots at 4th Street provide additional parking downtown,” he said. “It is beneficial to have people park in areas other than just down at the Inlet. They go up to the Boardwalk and make their way down to the Inlet and go by all of those restaurants and businesses and in terms of an economic benefit that has been very successful.”
Meehan said the comprehensive plan and the Ocean City Development Corporation (OCDC) both call for more municipal parking areas scattered around the downtown area where possible.
“If you look at the comprehensive plan, it talks about having parking available in different areas to better circulate traffic,” he said. “If you look at the OCDC, they support having those satellite parking areas probably in favor of building one big parking garage that would cost millions of dollars. So, there are a lot of things to take into consideration.”
The same local resident called into question the validity of the U.S. Post Office’s lease of the property, but the mayor explained the town has a signed lease in hand and the facility will remain in its current use for at least the next five years.
“The Post Office does have a five-year lease and the purchase is contingent on them honoring that lease,” he said. “I don’t think the Post Office is going to be leaving any time soon.”
Meehan said when the concept of purchasing the property first came up, it was discussed as a 20-year bond issue. The current rent from the Post Office is around $89,000 and the bond payment on a 20-year issue would be about $94,000, meaning the rent would almost cover the annual bond payment. At the preferred 10-year bond issue, the town’s annual payment would be around $161,000, meaning Ocean City would have to supplement the post office rent to make the annual payment. However, going with the 10-year bond would save the city around $277,000 in the long run.
“I think this is a very important move,” he said. “I think 10 years from now, well before this bond issue is paid off, people are going to look back and say we’re really glad the town decided to purchase this property because it allows us to continue to do things to make Ocean City a better place.”