OCEAN CITY – On the same day they advanced a proposed downtown project including a minimum of 25 beds for seasonal town employee housing, resort officials opposed workforce housing at the proposed midtown firehouse replacement.
The Ocean City Fire Department’s existing Station 3 firehouse at 74th Street has fallen into disrepair and become functionally obsolete, and the plan is to construct a state-of-the-art firehouse at 65th Street in the front lot of the Public Safety Building. In the many months since the project was first proposed, an acute need for seasonal workforce housing for town employees has been identified, and resort officials have been trying to add beds here and there through different projects, both in the public and private sectors.
The original plan was for a stand-alone midtown fire station, but City Manager Terry McGean explained on Tuesday there were other options that could add seasonal workforce housing elements to the project by adding one or two stories to the fire station. Naturally, adding stories to the firehouse original design would substantially increase the cost of the project. After considerable debate on Tuesday, the council agreed to forego the addition of workforce housing and move forward with the firehouse design as a stand-along facility.
The firehouse debate was part of a recurring theme on Tuesday’s work session agenda. Also on the agenda was a request to move forward with a proposed Ocean City Development Corporation (OCDC) project downtown at Somerset Street that will include a minimum of 25 seasonal workforce housing beds for town employees. McGean explained he has been working with various department heads in an attempt to nail down the need for more seasonal workforce housing beds for town employees, which is why he included the proposed options for the firehouse.
“The next two items are somewhat related,” he said. “I did reach out to the department heads about what our Ocean City government employee housing demands are. I reached out to the beach patrol, the police department, the fire department and public works. In a recent beach patrol survey, 37% said they would take advantage of employee housing if it was available.”
McGean said after polling the various department heads, there was an instant demand for 89 workforce housing beds, but the real demand in the future could be as many as 170. He said there are currently 13 beds at the Tarry-a-While being utilized by the beach patrol, and another 25 beds at minimum in the Ocean City Development Corporation (OCDC) proposed project for Somerset Street.
Adding two floors to the proposed Station 3 firehouse could add 32 more beds, or 16 per floor, but the estimated cost of the project would go up considerably. That would bring the total among the three projects to 70 beds, if approved, or closer to the 89 projected as needed by the department heads in the very near future.
The fire department currently has a popular live-in program that could be expanded. The Ocean City Police Department (OCPD) also has a unique situation with officers living in shared housing at residences in Ocean Pines, according to McGean. He also said there were 25 rental properties on a preferred landlord list for town seasonal employees.
The point raised the question of whether to expand the proposed Station 3 midtown firehouse with two floors dedicated to seasonal town employee housing. The Station 3 firehouse was originally budgeted at around $8 million. McGean explained if the firehouse was built as originally planned, without the additional of seasonal workforce housing, the cost would likely come in at around $9.6 million in today’s climate. If one story was added for workforce housing, including 16 beds, the estimated cost would jump to $11.4 million. If the council decided to add two floors for employee housing, or a total of 32 beds, the price goes to $12.7 million.
It’s important to note the Mayor and Council last year approved a bond sale totaling $49 million for multiple capital projects, including the midtown firehouse, the redevelopment of the downtown recreation complex and the Baltimore Avenue renovation project. However, $20 million of that bond sale includes the refinancing of existing bonds to take advantage of the historically-low interest rates at the time, resulting in significant savings for the town.
The plan was to include funding for the midtown firehouse in the bond sale and redirect funds that might come about from the Station 3 construction to the Baltimore Avenue redevelopment project if possible. In addition, some of the funding for the downtown park redevelopment project could be redirected if town officials are successful in securing certain state grants for the project.
The decision facing the Mayor and Council on Tuesday was do build just a stand-alone midtown fire station at 65th Street, or adding one or two stories to provide some additional seasonal employee housing, which has been defined as a dire need for the city.
“We asked the architect to draw out some things and the construction manager is also working on plans,” said McGean. “The construction costs have gone up considerably. There is a way to get 16 occupants on each floor, or a total of 32 if you decide to go with the three-story option. There could be creative ways to increase the number of beds available by adjusting the size of the common areas.”
With inflation rising and construction costs increasing, McGean said the timing shouldn’t be a factor for waiting to pull the trigger on the project.
“It’s all due to construction costs,” he said. “That isn’t going to change any time soon, so there really is no point in waiting to see if the costs will go down. We need to get something going on this firehouse project and we need some direction.”
McGean said to get the proposed 32 beds, the cost of the project could go up by $3.2 million. He said the cost of the proposed employee housing in the new fire station would be higher because of the nature of building a firehouse.
“The cost per square foot is different in a firehouse than if you were going to do a stand-alone building,” he said. “You’re building much sturdier building, for lack of a better word.”
McGean wasn’t advocating for adding seasonal workforce housing in the new firehouse, but was merely pointing out his survey of the various department heads determined the need for around 80 beds in the various projects around town.
“We’re looking at adding 76 new beds,” he said. “What we’re hearing from the department heads is if we had the beds, we could get commitment from more employees.
The market rate right now is about $2,400 for the season, or about $600 a month for a four-month season.”
Council Secretary Tony DeLuca pointed out the potential cost is not significantly different than what was proposed when the project was first discussed years ago.
“What was the estimate five years ago?” he said. “I think we first talked about around $11 million to $12 million. So, is it about the same? It seems pretty similar to where we were before.”
Finance Director Chuck Bireley explained the bond sale included around $8 million for the Station 3 firehouse, although the truer number was closer to $9.5 million. He said the plan included a set-aside of $4.5 million to jumpstart the Baltimore Avenue project, but that could be applied to the firehouse construction if need be. DeLuca asked if diverting funds earmarked for Baltimore Avenue would put the town behind the financial eight ball.
“What does that do to us financially?” he said. “If we decide to do this project at $12.7 million, what would we need for Baltimore Avenue.”
When pressed for a staff recommendation, McGean said if it was the council’s desire to include employee housing in the new fire station, he would recommend adding both floors from an economic standpoint.
“If you’re going to do seasonal housing in this project, you might as well do the second floor,” he said. “There is an economy of scale involved with this and the construction and design costs.”
However, when pressed further for a recommendation, McGean outlined his favored options.
“My first recommendation would be to just do the firehouse,” he said. “My second favored option would be to do the firehouse and both floors of seasonal housing. The other option is doing the firehouse with just one floor of seasonal housing, but that is my least-favored option.”
DeLuca said if it was doable from a financial standpoint, he could support adding seasonal housing to the firehouse design.
“We need all of the housing we can get,” he said. “It’s a real crisis. If Chuck says its doable, I can support it.”
However, Councilman Mark Paddack said he wasn’t sure that line of thinking was correct.
“You’re looking at it from a business side, and should government be involved in local business,” he said. “There is a housing shortage. I’m looking at this in terms of comfortable housing for critical town employees. If we can create living space for our town employees, it can free up housing in the private sector for other seasonal employees.”
Paddack said the proposed firehouse seasonal housing could be used by OCPD employees in close proximity to the department’s headquarters.
“If you look at 16 beds per story, you will have public safety employees filling up the housing at the firehouse within walking distance of the Public Safety Building where they work. Operationally, this is a no-brainer for me and I’m all for it.”
Councilman John Gehrig said there were too many questions related to planned or ongoing seasonal workforce housing projects to consider significantly increasing the price tag for the firehouse to add just 32 more beds.
“I just think we should get all of the facts and an inventory of all of the projects,” he said. “We just don’t know. It seems like were saying we can four beds here and 12 beds there and another 20 somewhere else. Who knows, somebody out there could come in with a plan for 200 beds. We should have a plan, and right now it seems like we don’t have a plan.”
McGean asked the council what their best-case scenario would be, and said there was some flexibility in the preliminary design to get more beds than what has been proposed.
“Is there a number of beds that would make you more comfortable?” he said. “I’m pretty sure I could get it to 40 beds, because these are some pretty generous spaces. We need to move forward with this firehouse construction.”
The council took no action on the proposed addition of one or two floors to the firehouse for seasonal workforce housing, resulting essentially in an endorsement for moving forward with the firehouse as planned and not adding any seasonal workforce housing.
