OCEAN CITY — It was never a question this week if the town should extend the lease of the street-end bulkhead and deck at 1st Street and the bay to a downtown business, but for just how long.
The Mayor and Council on Tuesday had before them a request from de Lazy Lizard owner Steve Carullo to extend the lease of the bulkhead, deck and street-end for another three-year period. The popular restaurant and bar surrounds a bulk-headed lagoon and for years has leased the street end to the south of its property line from the city for a nominal fee.
The most recent three-year lease agreement expired on Dec. 31 and the business has continued to utilize the street-end since, necessitating an agreement to renew a three-year lease. City Engineer Terry McGean on Tuesday presented the proposed lease to the Mayor and Council with the same terms as the recently-expired one including a three-year use for the same annual fee of $10,000.
“I think as long as I’ve been with the city, we’ve done this,” he said. “For years, it was BJ’s on the Water and most recently de Lazy Lizard. The lease is in exchange for bulkhead maintenance and repair.”
With the landscape changing in that area of downtown, especially with the continued development of a bayfront hotel to the south, Councilman Dennis Dare suggested just extending the lease for one year at this time.
“Things have changed down there,” he said. “I think the new hotel developer should weigh in on this. It’s still under construction, so this summer is not an issue. Let’s extend the lease for one year and revisit this next year.”
Dare also pointed a long-time objective for the city has been to create a bayside boardwalk to direct pedestrian traffic around to the bayfront businesses. As a condition of site plan approval, the new Cambria hotel has been required to include a public-access bayfront boardwalk along its western exposure although it’s uncertain still what that might look like.
“We have a vibrant bayside and the idea is connect all of that,” said Dare. “I think tying all of that together is important. A one-year extension allows us to work through some of those things.”
Councilman Mark Paddack seconded the motion to extend the lease for one year.
“What I’m saying is with how the street end is being utilized now, it’s important to have the adjacent property owner aware of the agreement,” he said. “The concrete plant didn’t have a problem with the property owner to the north using it, but that might change a year from now.”
However, Councilman Matt James said through the complexities of the approval process, the hotel developer had to be aware of the lease agreement and pushed for renewing the lease for the requested three years.
“The new hotel owner didn’t acquire this property yesterday,” he said. “I’m sure if they had a problem, it would have been brought up by now. I don’t think we should hold this business owner up.”
Councilman Tony DeLuca pointed out how patient Carullo and de Lazy Lizard have been in recent years with prolonged construction in the 1st Street area including the natural gas line extension across the bay in that area along with the town’s reconstruction of the beach ball water tower.
“The Lazy Lizard has been a great partner for the city,” he said. “I agree we should extend the lease for another three years.”
McGean agreed with DeLuca’s assessment of the situation.
“He has been extremely patient with the amount of work done at 1st Street,” he said. “He has been patient beyond what a lot of reasonable people would be.”
Councilman John Gehrig suggested language be added to the proposed lease that would make it subject to the approval of the adjacent property owner.
“I don’t want to hold up a business that has been a great partner,” he said. “Maybe adding a single sentence to this can accomplish what we want.”
McGean pointed out what the council had before them on Tuesday was merely a request to extend the lease for three years and some of the concerns raised would be addressed in formulating the actual lease.
“You’re not signing a lease, you’re agreeing to extend a lease,” he said. “There are still legalities involved. They still would have to get the adjacent property owner’s consent. You all will have to approve what we’re going to draw up.”
Dare said he still wanted the opportunity to extend a bayside boardwalk through that area and extending the lease for one year would allow for further discussion.
“We’re always trying to find ways to move people around to the bayside,” he said. “If that happens in the next six months, it’s a win-win for everybody. We still don’t know what the Cambria people think.”
The council voted 4-3 with James, DeLuca and Gehrig opposed to extend de Lazy Lizard’s street-end lease for one year with the promise to revisit the issue when the lease expires.