OCEAN CITY – After a pair of marathon hearings, the proposed Margaritaville project moved two big steps closer to becoming a reality this week.
The Mayor and Council on Monday had before them two separate issues related to the Margaritaville Hotel and Conference Center, which would encompass an entire city block downtown on the oceanside facing the Boardwalk between 13th Street and 14th Street. The proposed project over 12 different lots would include 265 hotel rooms and three restaurants, including the JWB Grill with high-end steaks and seafood, the Landshark Bar and Grill and a coffee shop and provisions store in the lobby. The project would also include three outdoor pools and one indoor pool, a wellness center and gym, 14,000 square feet of flexible convention space, retail stores facing the Boardwalk and many other upscale amenities.
On Monday, the Mayor and Council considered two different elements that will bring the project to fruition. The first was a public hearing on the conveyance of air rights over the section of public-access right of way on Washington Lane, which bisects the massive project. The second issue was approval for a planned overlay district, or POD, for the proposed Margaritaville project. A POD affords a developer some flexibility in designing a large-scale project in exchange for some concessions to the town on certain issues.
After the public hearing, the council voted unanimously to approve the conveyance of air rights over Washington Lane with conditions proffered by the developer, NOSC, LLC for improvements to the alley. The Mayor and Council then turned their attention to the POD application for the project, which was ultimately approved after a lengthy discussion.
Planned Overlay District Approved
With the air rights conveyance issue resolved, the Mayor and Council turned their attention to, perhaps, the larger issue of the POD for the project. The POD is essentially a zoning map amendment to allow for the proposed redevelopment of the entire block.
The planning commission held a lengthy public hearing in November, after which it forwarded its findings of fact and a favorable recommendation to the Mayor and Council for approval of the POD with a list of 13 conditions of approval attached. By the time the lengthy discussion on the POD application was over on Monday, the council had added four more conditions of approval for the developer.
Planning and Community Development Director Bill Neville explained at the outset after careful review by the staff, a public hearing and due diligence of the planning commission and conditions proffered by the developer, the Margaritaville project as presented represented a good plan for the redevelopment of an entire city block in the downtown area.
“One of the things that started to come out,” he said. “This is a unique opportunity. It’s an opportunity to do something exceptional.”
Neville explained the POD provides the developer some flexibility to develop a best-use plan for the property, while the trade-off is assurances that steps are taken to minimize the impact on the surrounding community.
“That’s the test that goes into play with the POD,” he said. “We evaluate the POD on the principle to minimize the impact to surrounding properties. It provides some tools for us. When it moves forward to site plan review, the key is to ensure it adheres to that intent.”
The Margaritaville project as proposed carries over some of the code non-conformities afforded to the old Beach Plaza Hotel property. Mayor Rick Meehan said traditionally non-conformities go away when a property is redeveloped, but Ocean City generally favors extending them if it makes a redevelopment project better.
“Ocean City is one of the few places I know of that perpetuates non-conformity,” he said. “The reason for that is to encourage development and redevelopment. What we like to see is the non-conformity reduced during redevelopment, or at least remain the same. We don’t like to see it increase generally.”
As expected, the major issue during the discussion of the POD application approval was parking. A condition of approval imposed by the planning commission reads, “The owner shall implement a comprehensive parking management system which includes valet parking for all arriving guests. No reserved or valet parking is permitted on public streets.”
Council President Matt James still had reservations about the proposed parking plan for the project.
“My concern is the parking situation,” he said. “Are they any other properties in town that are valet parking only?”
Neville pointed out there will be times of the year when the resort hotel is filled just to a fraction of its capacity, and at those times, particularly during the winter, a parking management system should be maintained, but that does not necessarily mean a complete valet service.
“A condition the planning commission included is a managed parking system,” he said. “I don’t know if in January they will need a full-time valet system. There has to be some flexibility.”
Having read the findings of fact and the favorable recommendation from the planning commission and staff, Councilman Mark Paddack was prepared to make a motion to approve the POD application for the Margaritaville project.
“It’s pretty obvious to me that the planning commission is very clear in its memo,” he said. “The commission held work sessions and considered everybody’s testimony. There are 91 pages of testimony from the planning commission. I appreciate the work of the planning commission and staff to bring us a thorough recommendation.”
Again, the POD provides flexibility for the developer to create an aesthetically-pleasing project. In the case of the Margaritaville project, that means easing some of the setback requirements in order to allow the rooms and amenities to be spread over the entire property. For example, the proposed design has some elements of the project just 15 feet from the Boardwalk, but the restaurants, outdoor pools and pool decks and other amenities are gradually tiered-back toward the highest tower of rooms in the center of the property. Meehan pointed out the relatively close proximity of some of the elements to the Boardwalk and said the sacred standard for many years has been 32 feet.
“This building comes within 15 feet of the Boardwalk,” he said. “This would be closer than anything else in that area with the exception of the Holiday Inn. This is different. I like how it is tiered back from that point, but it will set a precedent.”
Meehan said a POD approval is supposed to cut both ways.
“A POD gives a developer a great degree of flexibility,” he said. “It’s also supposed to be the trade-off to create a better project for the area and by moving everything in a little and putting the parking underneath, it creates more open space and visually creates a better project.”
Meehan then addressed some his concerns about the parking issues, concerns he has apparently heard from constituents.
“This is the result of a lot of comments we have gotten,” he said. “This building will affect parking probably as far south as a couple of blocks and as far north as a couple of blocks, and probably back to the bay.”
While the parking management system, or valet system, will control parking within the site or on lots the developer owns, Meehan voiced concern about the trickle-down effect on parking in the entire area.
“It is going to have a significant impact parking-wise on that surrounding area going back to the bayside and into the residential areas,” he said. “It might result in other things taking place that will make parking in that area more difficult. It is going to change things dramatically. Does the quality of this building and what it brings to Ocean City offset that? I think it does in many ways.”
Again, Meehan said he strongly supported the project as presented, but believed there could be a few tweaks to make it more palatable to the surrounding neighborhoods.
“I’m thrilled you’re here to present such a project,” he said. “I do believe there are things that could have been done to make this project a little smaller and more conducive to that area, but, overall, what you’re bringing to town and what you’re proposing is certainly a first-class project.”
James also continued to voice concern with the overall parking issues associated with the major project.
“Parking is probably my biggest hang-up with this project,” he said. “This neighborhood is already significantly short on parking. It’s going to significantly impact the neighborhood.”
With that said, the council at long last was prepared to vote on the motion made by Paddack with five conditions added to the 13 conditions included in the planning commission’s recommendation, including any valet fee must be included in the overall room rate between Memorial Day and Labor Day, and outside of that, it doesn’t have to be included if self-parking is available.
Other conditions included in the council’s motion included a bus stop on Baltimore Avenue provided by the developer, security gates with emergency vehicle access at 13th Street and 14th Street and the Boardwalk, the removal of any signs along Baltimore Avenue that encroach in the right of way, and the placement of fire hydrants at the direction of the fire marshal’s office. After considerable debate, the council voted 5-1 with James opposed and Councilman Lloyd Martin absent to approve the POD application for the Margaritaville project.
Air Rights over Washington Lane Conveyed
Before the Mayor and Council took on the larger POD application issue, there was a public hearing on the proposed conveyance of air rights over the portion of Washington Lane the bisects the property. Last summer, Attorney Hugh Cropper III, who represents project developer NOSC, LLC, presented a conceptual plan for the town to essentially abandon that portion of the alley and convey it to the project developer.
Under the new proposal, that 16-foot wide portion of Washington Lane that bisects the Margaritaville property would remain a public right of way and the developer would make significant improvements to it. For example, the existing 16-foot-wide alley would be widened to 23 feet, allowing for two vehicles to safely pass through that section of Washington Lane.
In addition, five-foot wide sidewalks would be added on either side of the alley, along with a dedicated three-foot-wide bicycle path. Because of the changes, the portion of Washington lane that bisects the Margaritaville property would have to be realigned by about nine feet, so it would align with the sections of the alley to the north and south.
In order to accomplish all of those changes, the developer was seeking the rights to the air space over the public right of way. The air space would be at least 14 feet above the roadway, or a height prescribed by the fire marshal’s office. Cropper explained the air rights are needed in order to connect the elements of the project on either side of the alley.
“It’s a unified development of the entire Beach Plaza property,” he said. “It’s considered in-fill development. It’s a very exciting project. We’re asking to acquire the air rights over Washington Lane. Our position is, without the air rights, we cannot do a unified project.”
Cropper said without the conveyance of the air rights over the alley, the project could not be completed as designed and proposed.
“The air rights do not serve any public purpose,” he said. “If you don’t have the air rights, you have two separate buildings. It doesn’t work. It will actually be a public benefit.”
Cropper then called on a laundry list of witnesses during the public hearing, the majority of whom spoke in favor of conveying the air rights to the developer. Former longtime Ocean City Zoning Administrator Blaine Smith, who serves as a consultant on the Margaritaville project, explained the many ways improving the alley would benefit the public in general.
“There are structures over alleys in other areas with no negative impact,” he said. “It would have a positive impact. Two-way traffic in the alley is a public benefit. Sidewalks on either side is a public benefit. The slight offset to the north provides traffic calming, so that’s another public benefit.”
Meehan supported the conveyance and the improvements to the alley, but voiced concern about the proposed width of the bike path.
“I think you’re doing a lot to improve the alley,” he said. “I do have some concerns about two-way bike traffic. I’m just worried the three-foot bike late is not wide enough.”
Steve Smith, a principal in the Chesapeake Hospitality Hotel Management Company, a partner in the proposed Margaritaville project, presented pictures of the interior spaces of the proposed project over the alley.
“When you look at what’s above the alley, it shows the connectivity,” he said. “A well-connected resort allows for an extended tourist season. The guests never have to go outside if they don’t want to.”
Margaritaville Hospitality CEO John Colhan also testified about the importance of the air rights to the project. Colhan has been partners with Jimmy Buffett for over two decades and helped transition the company from a small restaurant in the Florida Keys to a nationally and internationally-known brand. Colhan was asked why Ocean City and why now for the company’s next big undertaking.
“Ocean City would have been great at any time for our development,” he said. “Ocean City already fits the brand. It’s ideal now, but it would have been at any time. I can’t think of any place in the country that would be a better fit for this project. I couldn’t be more excited.”
During the public comment portion of the hearing, there was just a smattering of comments made. Resident and former councilman Vince Gisriel raised concern about the town potentially conveying the air rights without determining what their value was through an appraisal.
“What is the value of air rights?” he said. “If you were talking about conveying an alley, that could set a precedent down the road considering the density.”
After considerable debate, the council voted 6-0 with Martin absent to approve the conveyance of the air rights over Washington Lane to the developer.
