OCEAN CITY – The planned Margaritaville project encompassing an entire city block in the downtown area moved a little closer to fruition this week with at least one hurdle surpassed.
The Mayor and Council on Monday had two agenda items for the proposed Margaritaville project between 13th and 14th streets, each of which inch the proposed project beyond existing hurdles. The first issue debated was the conveyance of roughly 21 feet of town-owned right-of-way along Baltimore Avenue to the project developer in order to meet the 90,000-square-foot minimum lot size to qualify for a planned overlay district (POD) designation to accommodate the project.
The Mayor and Council held a public hearing on that issue Tuesday, but after taking testimony did not make any decision on the conveyance of the right-of-way to the developer, instead opting to bring back the issue for further discussion at a future meeting.
The second agenda item related to the Margaritaville project was the second reading of an ordinance allowing the developer to meet the minimum parking standards by accepting a comprehensive parking management system, essentially a valet service, that will allow for tandem, or stacked, parking for the project. The council did vote 5-1, with Council President Matt James opposed, to approve that ordinance on second reading.
The proposed project over 12 different lots would include 265 hotel rooms, 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.
Baltimore Avenue Right-of-Way Conveyance
The proposed planned overlay district (POD) for the Margaritaville project requires at least 90,000 square-feet of property and the project developers need a portion of the Baltimore Avenue corridor conveyed back to the property owner now to move the project forward. To that end, there was a request from the developer for the city to abandon that portion of the right-of-way between 13th and 14th streets to accommodate the project.
The conveyance of the right-of-way is going to happen at some point anyway, but the developer is seeking the transfer now in order to move the Margaritaville project forward. The Mayor and Council held the requisite public hearing on Monday, although no action was taken on conveying the right-of-way to the developer. With the public hearing closed, the council will renew the debate about the property conveyance at a future meeting.
Local attorney Hugh Cropper, representing the Margaritaville developers, outlined the situation regarding the no man’s land of public right-of-way now being utilized by many adjacent property owners.
“Baltimore Avenue was platted over 100 years ago,” he said. “The 75-foot actual roadway is more like 36 feet. This condition has existed for years and years. The Mayor and Council have taken up this issue many times over the years.”
Cropper said he was well-versed on the Baltimore Avenue right-of-way issue because of his involvement decades ago.
“About 25 years ago, I was asked to write an opinion letter that the adjoining property owners clearly owned the property by virtue of adverse possession and the fact the State Highway Administration came in and accepted the 36 feet of pavement,” he said. “Unfortunately, the Mayor and Council at the time did not take my advice. They moved forward with the town of Ocean City claiming ownership of that land.”
Cropper said property owners along the Baltimore Avenue corridor have for years been utilizing the portion of the right-of-way in all manner of ways and the conveyance of the section to accommodate the Margaritaville project was just an extension of that.
“It’s important to note that the adjoining landowners, although this relates to the Margaritaville project, have owned the land for many years,” he said. “They’ve built structures in it and created parking in it. They have come here and gotten permits for signs and all sorts of things. For all intents and purposes, they have acted like they have owned it.”
The attorney said conveying the section of right-of-way was consistent with the town’s comprehensive plan to encourage PODs.
“This is almost a model block. It is consistent with the comprehensive plan to encourage destination resorts,” Cropper said. “It does give the property owners a little more room to do a master plan development that is encouraged by the comprehensive plan. There needs to be an economy of scale. The zoning code change encourages POD development and this will allow that to happen with the Margaritaville project.”
Cropper said accommodating the project with the conveyance would contribute significantly to the town’s property tax base.
“I’ve been listening to Councilman Gehrig talk about the sports complex and the money that will bring in so you can continue to provide the first-class services that you provide,” he said. “If you pass this, the first person to visit this property will be the tax assessor to raise the property tax, which will be a direct impact for the town.”
During the public hearing, the Margaritaville project got an endorsement from Todd Burbage, chief executive officer of Blue Water Development, which operates a neighboring hotel.
“Arguably, no one will be more affected by this project than the Commander Hotel at 14th Street,” he said. “This is probably the most exciting project to come to Ocean City in a long time. We have been supportive of it from the beginning. Margaritaville coming to Ocean City, in my opinion, is family-oriented. Jimmy Buffett is going to be here. It’s exciting. This will be a great addition and we welcome it wholeheartedly.”
However, not all business owners in the area were as keen and the apparent accommodations the town is making for it. G. Hale Harrison, vice president of operations and real estate for Harrison Group Resort Hotels and Restaurants, said the town has consistently bent the rules to accommodate the proposed project.
“In every step of the way, when the project doesn’t comply with the city code, the Mayor and Council has shown a willingness to change the city code,” he said. “There’s another item on the agenda tonight to change the parking code because Margaritaville can’t comply with the parking code.”
Harrison said it appears the council is fast-tracking the right-of-way conveyance to accommodate the Margaritaville project in advance of the planned conveyance to the other property owners when the corridor is redeveloped.
“To give away public property for no consideration on Baltimore Avenue between 13th Street and 14th Street is unbelievable,” he said. “It’s unbelievable you would consider giving away one block of public right-of-way. It’s a serious decision to give away the unused right-of-way. If nothing else, it should be considered comprehensively from North Division Street to 15th Street.”
Harrison said the proposed conveyance is just another example of the town accommodating a single project with code changes.
“There is no justification to benefit one single developer,” he said. “It’s clear the developer does not have the 90,000 square feet to qualify for the POD. You’re going to give away one city block instead of considering the issue comprehensively. That’s unfair and unreasonable. Other developers play by the rules. We would be embarrassed to ask you for this.”
The Mayor and Council closed the public hearing but took no immediate action on the decision to convey the one-block of right-of-way along Baltimore Avenue to the developer.
Tandem Parking Ordinance
The ordinance allows for tandem, or stacked parking, with a valet system for some major downtown redevelopment projects including the proposed Margaritaville project, in order to meet their minimum parking requirements. Last month, the council approved the proposed code amendment after receiving a favorable recommendation from the planning commission.
In simplest terms, if a redevelopment project for a hotel complex or a commercial use in the downtown area could not meet its minimum parking space requirements on-site, tandem parking, or spaces in which vehicles are stacked one behind the other, could be utilized as long as a comprehensive parking management plan, or valet service, for example, was in place.
Ostensibly, the code amendment, if approved, would apply to any significant redevelopment project that can’t meet the parking requirements on-site, but the proposed amendment is somewhat specific to major projects already in the planning pipeline, including the Margaritaville project.
Cropper said the ordinance as proposed would provide incentives for the revitalization of the downtown area.
“I just want to point out a couple of things,” he said. “This is another incentive to provide for the revitalization of the downtown area. It is an expansion of existing development incentives you already have for the downtown area. You have reduced the parking standards in downtown overlay districts.”
Cropper said the ordinance as proposed was not specifically tailored for the Margaritaville project.
“This is not in any way a special ordinance for the Margaritaville project,” he said. “It’s a continuation of design incentives to encourage redevelopment. I think it’s exciting. I think valet parking is an innovative idea.”
As in previous discussions, questions were raised about certain language in the proposed ordinance that made decisions regarding allowing stacked parking “subject to the approval of the planning commission.” As a result, the version of the ordinance presented for second reading on Monday struck that language. Mayor Rick Meehan said he opposed the ordinance because of that omission, although he didn’t have a vote.
“I am opposed to the ordinance as written with the removal of ‘subject to planning commission approval’,” he said. “I object to that language being removed.”
Meehan pointed out language in the comprehensive plan that provided for the flexibility in the code when a proposed project would be considered constrained by lot dimensions. He said in his opinion, the density of the planned Margaritaville project likely did not qualify as “constrained.”
“The redevelopment of in-fill properties in the downtown area is constrained by the availability of land,” he said. “I think that needs to be determined before you can consider whether or not you’re going to allow valet parking. I don’t consider a lot that is 90,000 square feet to be constrained by the availability of parking. The only reason it is constrained is because the property is being overdeveloped.”
In the end, the council voted 5-1, with Council President Matt James opposed and Councilman Frank Knight absent, to approve the ordinance on second reading.