OCEAN CITY – After some intense debate, resort officials this week agreed to move forward with a mixed-use downtown facility including a police bicycle storage space and seasonal workforce housing for town employees.
In April, the Ocean City Development Corporation (OCDC) pitched the concept for a mixed-used facility at Somerset Street for the Ocean City Police Department (OCPD), which would include workforce housing for town employees such as seasonal police officers and public safety aides, among others. The OCDC is a quasi-public organization dedicated to improving the downtown area and for years has been piecemeal acquiring properties when they become available for future redevelopment.
The OCDC has proposed a mixed-use facility on a parcel at Somerset Street, which would include new storage and maintenance space for the OCPD’s bicycle patrol, public restrooms, an improved bus stop and at least 25 beds of seasonal housing for the OCPD.
The overall initial cost estimate for the project is around $2.4 million, which would include a $1.4 million contribution from the town and a $1 million contribution from the OCDC through its share of the Inlet parking lot revenue.
For years, the OCDC has received a portion of the weekend Inlet parking lot revenue as a reserve fund of sorts for projects it has, or intends to develop, in the downtown area. In April, the council approved a $25,000 contribution from the town to fund a pre-construction management consultant, who would work with the project architect and City Manager Terry McGean on the final design and costs estimates.
On Tuesday, McGean presented an outline of the proposed memorandum of understanding (MOU) for the project, which will ultimately determine each party’s responsibility in funding, owning, managing and operating the new facility.
“The city would own the building and the property,” he said. “The town would operate and maintain the first floor and the OCDC would operate and maintain the second- and third-floor living areas. The tenants would be restricted to town employees.”
McGean outlined the proposed funding formula for the project. He said with construction costs rising and inflation, the project will likely come in higher than originally anticipated.
“Right now, there is $1 million in Inlet lot revenue dedicated to downtown capital projects,” he said. “They get a portion of the Inlet lot weekend revenue for that purpose. The rest is dedicated to the general fund. This was estimated at $2.4 million, but I think it’s going to be more like $3 million when it’s all said and done.”
Councilman John Gehrig said the capital reserve fund established by the council earlier this year could be a funding source for the proposed project.
“We have a capital reserve fund dedicated to projects like this,” he said. “We have $1.5 million in the capital reserve fund for this. That’s what the capital reserve fund is for.”
McGean said the town’s recently-approved fiscal year 2023 budget was based on the assumption of a strong summer season, and depending on the outcome, there could be more funding available for pay-as-you-go capital projects without going to the bond market.
“After the summer, we’re going to evaluate how we did,” he said. “This could be paid for out of the capital reserve fund, or you could bond it and pay it off over years. That fund was never intended to be used for debt service. It was set up for pay-as-you-go projects.”
Gehrig said he supported the concept of the new facility, but questioned dedicating nearly the entire first floor to a storage area for the OCPD’s bicycle patrol.
“Really, it’s a choice between bikes or more beds,” he said. “That’s my biggest issue with this project. We have a dire need for housing, but we’re going to dedicate one floor of this building to store bikes.”
Gehrig pointed to repeated reports from the Ocean City Police Commission about declining crime rates in the resort as part of his concern about more and more facilities for the department.
“We do this a lot,” he said. “When we hear from the police department about crime rates and the numbers going down, we are already safe,” he said. “Somehow, we’re surviving today without this. Do we need the luxury of bicycle storage if we can 40 more beds?”
Councilman Mark Paddack, a former OCPD bicycle officer, took exception to Gehrig’s characterization that the first-floor bicycle storage and maintenance area was a luxury.
“You are grossly negligent in how you are presenting this,” he said. “The use of the phrase luxury bike storage is grossly misleading. These are critical, essential employees. That aren’t fast food employees or office workers off on the weekend.”
Again, Gehrig asked what the overall intent was for the proposed facility.
“What is the priority?” he said. “Do we need more beds, or do we need luxury bike storage?”
Paddack said the project as proposed made perfect sense with the OCPD bike storage and maintenance area on the first floor, the bus depot and the public restrooms with the seasonal workforce housing on the second and third floors.
“I support the project,” he said. “I support getting the bikes out of the Beach Patrol building. Have you ever gone down there and seen that space? I also like the idea of police officers living downtown and walking to work and being available.”
McGean said the project is only in the early design phases and there is an opportunity to add more housing for town employees, including police officers.
“It says a minimum of 25 beds,” he said. “It answers a lot of questions. It does allow for some flexibility in the design. There is an opportunity for more beds.”
McGean said the only thing in front of the Mayor and Council on Tuesday was approving the proposed framework for the MOU and moving the project forward.
“The only thing you’re committing to today is the proposed MOU and the pre-construction costs,” he said. “You are not committing to fully funding the project at this point. That will be determined when the construction manager comes back with estimates.”
That being said, McGean said there was some certainty that construction costs would come in over what has been anticipated.
“There is nothing I have seen that indicates construction costs will go lower any time soon,” he said. “There could be a time when the costs increase at a lower rate, but I don’t see them decreasing.”
Gehrig said he could get behind the project, but could not support dedicating an entire floor of a three-story building to police bicycle storage when the need for more beds for the town’s seasonal employees was so acute.
“I will support the project,” he said. “I will not support a full story dedicated to bicycle storage. There is zero chance I can support that.”
Gehrig said the council has been approving various projects and programs as if there is an endless pot of money, including the proposed OCDC project downtown.
He pointed out just during Tuesday’s work session there were over $6 million in projects on the table. However, Paddack said there is a conservative and prudent spending plan in place to cover the necessary expenditures.
“The town is not flush with cash as you’ve insinuated here today,” he said. “This council has worked diligently to put money in the right places to fund our priorities. We have been extremely tight with everything and we are prudent about our spending.”
Ultimately, the council approved moving forward with a formal draft MOU and advancing the project in a 6-1 vote with Council President Matt James opposed.
