Workforce Housing Sites Explored In West OC

Workforce Housing Sites Explored In West OC
This dormitory style housing campus in Lake Delton, Wisconsin, is owned and operated by Holtz Companies. The project includes 1,421 beds in 444 units. Submitted image.

WEST OCEAN CITY– A Midwest company is exploring a variety of West Ocean City properties as it works to develop student housing to serve the resort.

While a presentation in front of the Worcester County Commissioners last week focused on a Route 707 property, Wisconsin-based Holtz Companies is looking at multiple sites as it works to bring seasonal housing to Ocean City. Holtz Companies President Dan Bullock said the first step in the process is determining if the state would support the project with a low interest loan.

“That’s the key piece,” Bullock said. “When we build, one of our primary objectives is to make sure we can keep the rents low.”

The Greater Ocean City Chamber of Commerce opened discussions with Holtz Companies last year, according to Executive Director Lachelle Scarlato, in an effort to address the resort’s lack of workforce housing. With 8 million annual visitors, Ocean City needs 12,000 to 15,000 employees each summer.

“That’s just to get the job done,” Scarlato said. “That’s not by any means to offer an exceptional experience.”

With roughly 7,000 year-round residents, the resort fills the gap with seasonal workers. Some are local college kids while others are J-1 student visa workers. While the resort has received as many as 4,000 J-1 workers in past years, this year Ocean City is only expecting 1,600, Scarlato said.

“That is solely as a result of the lack of workforce housing,” she said.

She believes COVID-19 created a perfect storm. During the pandemic some property owners transitioned their seasonal housing to online rentals. At the same time, the price of real estate rose. So now, while workers still want to come spend a summer at the beach, the challenge is finding them a place to stay. To address the growing issue, the chamber began trying to put the pieces of the puzzle together and introduce the relevant parties.

As a result, Bullock and James Bergey, representing a West Ocean City property owner, met with the commissioners last week. Bergey outlined plans for dormitory style workforce housing to accommodate more than 2,400 workers. In order for the project to become a reality, however, he said it would need long-term, low-interest financing from the state. At his request, the commissioners agreed to send the state a letter of support for the concept.

Following last week’s meeting, Bullock confirmed that there were several West Ocean City properties the company was looking at, not just the one Bergey referenced. The first step in developing the kind of affordable housing the company specializes in, however, is securing the necessary financing.

“Our hope is if this works out with the state we can mobilize on two,” he said.

Scarlato said there were several parcels that presented themselves for seasonal housing in the West Ocean City area.

“We need at a minimum 5,000 beds just to be able to accommodate the present need,” she said. “That does not accommodate growth.”

According to Bullock, Ocean City is the number one host for Bridge USA J-1 students during the summer. In 2019, the resort hosted 4,100 J-1 students.

“The demand is definitely there,” he said.


A rendering of a 756-bed project Holtz Companies is building in partnership with Dollywood in Tennessee. Submitted image.

Wisconsin Dells, the area where Holtz Companies first developed workforce housing 10 years ago, is the number one Bridge USA host on an annual basis, bringing in 5,300 students. Bullock said Holtz Companies has been successful with its employee housing there and other places because it takes a measured, careful approach.

Scarlato agreed the company’s experience made it a good candidate for a project in Worcester County.

“The key item is not only their ability to be the general contractor but they have navigated all of the items to get there and have a form of management that works quite well,” she said.

A concern voiced by the commissioners last week related to the potential waiver of what could be $500,000 to $600,000 in annual property taxes for the project. Bullock said it was really too early to say whether development would hinge on a tax waiver or not. He said if the financing that was worked out was aggressive enough a tax waiver might not be needed.

“It will depend on how the financing plays out,” he said. “I’m looking at this holistically.”

Scarlato agreed that talk of a tax waiver was premature. She added, however, that if the project wasn’t built out there wouldn’t be any tax revenue anway.

As far as timing for a seasonal housing project, Bullock said the first step in the process was determining if the state would help with financing. If a financing program is worked out, Holtz Companies will begin developing a pro forma and timelines for construction. Ideally construction would begin in August, as any building would need to be complete before the next summer season.

“We really need to shoot for a spring opening,” he said. “But this is step one here and there are multiple steps. The fact that we’ve done this before will help us.”

Holtz Companies includes Holtz Builders Inc. (HBI) and International Residence Hall Inc. (IRH). HBI has done 15 workforce housing projects, nine owned and operated under the IRH flagship and six that are privately owned.

About The Author: Charlene Sharpe

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Charlene Sharpe has been with The Dispatch since 2014. A graduate of Stephen Decatur High School and the University of Richmond, she spent seven years with the Delmarva Media Group before joining the team at The Dispatch.