OCEAN CITY — Ocean City officials approved on second reading this week the purchase of a downtown property that could ultimately be used as a new staging area for the Boardwalk tram, but not before a spirited debate about the town’s recent penchant for purchasing private property in general.
The Mayor and Council on Tuesday approved an ordinance authorizing the purchase of a handful of parcels in the area of 2nd Street and St. Louis Avenue for a future Public Works maintenance area and staging area for the Boardwalk tram. The Boardwalk tram is currently maintained at a location on South 1st Street known as the Whiteside facility.
The Whiteside facility is nearing the end of its useful life and replacing it has been listed as a high priority in Ocean City’s long-term strategic plan. A potential replacement location has been identified as 2nd Street and St. Louis Avenue. The plan is to purchase the property for $2 million with an upfront investment of $400,000. The remaining $1.6 million would be financed with the sale of a 10-year general obligation bond offered at a low interest rate.
During last week’s meeting, there was a spirited debate about removing the planned second-reading from the agenda because of concerns about the logistics of operating the tram out of the 2nd Street location specifically and a larger plan to purchase property in and around the resort in general. This week, it appeared those issues had been worked out and the council appeared poised to vote on the property purchase before they heard from a familiar face in the audience.
When given an opportunity to speak on the proposed ordinance, former Ocean City councilman Vince Gisriel said he believed the council had not fully considered the implication of yet another large property purchase in the downtown area.
“When government acquires land, there must be a compelling public need,” he said. “I’m not convinced there is a compelling public need with this one.”
During last week’s debate, Councilman Dennis Dare voiced concern the property at 2nd Street, which for years housed the Driftwood Apartments, might not be suitable for a staging area for the Boardwalk tram because of its proximity away from the Boardwalk itself. Gisriel said Dare’s concerns appeared to be valid.
“Dennis made good points about the tram having to traverse two major roads downtown twice a day,” he said. “I think it needs more study.”
Gisriel, a retired state property tax appraiser, said the financial aspects of the property purchase at 2nd Street did not appear to make good financial sense on the surface, despite the remarkably low interest rate on the bonds.
“A little over a year ago, this property was assessed for $1.3 million,” he said. “I realize the assessed value doesn’t always match the actual value, but at first blush, it looks like the town is overpaying for this property.”
Gisriel then turned his attention to the town’s history of purchasing private property for municipal use and cited plenty of examples. In a most recent example, resort officials approved a purchase of the existing U.S. Post Office at 4th Street that will eventually be used for more public parking in the downtown area.
“I’m concerned about the continued propensity of the town to purchase property and take it off the tax rolls,” he said. “I remember the town purchasing the old Scandals property and I asked the developer or architect of the Public Safety Building why it was needed and the answer was it was needed for parking. Now, I rarely see it utilized all these years later.”
Gisriel pointed to other property purchases by the city over the years to illustrate his point, including the old Tropicana property near the Convention Center, for example.
“Take 60 days to get this right,” he said. “You’re using public funds to purchase property that isn’t always needed.”
However, Mayor Rick Meehan defended the city’s property purchases over the years, pointing out the Scandals property referenced by Gisriel would have sat right in the parking lot of the Public Safety Building. He also pointed out the old Tropicana property is on the site now being utilized for the next expansion of the Roland E. Powell Convention Center.
“Probably a better example is the purchase of the old Playland property,” he said. “Where would we be without that Public Works campus that is now undergoing a major renovation? The list goes on and on. The dilapidated property on 4th Street is now a municipal parking lot that generates the most parking revenue. The old Delmarva Power property at 100th Street is now the public library.”
Meehan said like its predecessors, the current council has seen the wisdom of purchasing property when it becomes available if the price is right to ensure the town’s future needs are met.
“All of these properties were bought in the interest of the future growth of the town and that has become a reality,” he said. “I see this property in the same way because the town has grown and continues to grow.”
In terms of the 2nd Street property in question specifically, Meehan said it made perfect sense to acquire the property to meet the Public Works Department’s future needs in the downtown area with the Whiteside facility reaching the end of its useful life.
“The former Driftwood property has been determined to be the best place for a downtown Public Works facility to replace Whiteside,” he said. “When you look at all of these things together, it makes sense to purchase the property. None of this is taken lightly. In order to improve efficiency, this is the right piece of property.”
Meehan said the town’s purchasing of property does not always satisfy an immediate financial need, but instead pays dividends further down the road.
“I think we’re in a good place with this Driftwood property,” he said. “I think it is going to best fit our needs. The payback is the value to the community. The payback is allowing us to serve the community in this area.”
The council voted unanimously to approve the purchase of the old Driftwood property at 2nd Street and St. Louis Avenue for $2 million.