OCEAN CITY — A mid-town beach rental franchisee’s request for an extension on his payments to the city was granted this week.
During Monday’s meeting, City Manager Terry McGean presented a request from the beach stand rental operator who holds the franchise for the parcel between 57th Street and 59th Street. Every three years, the town bids out the beach rental franchises by different areas throughout the town and the successful bidder for the parcel from 57th Street to 59th Street is due to pay the town $10,000.
However, citing a rough start to the season for a variety of factors, including bad weather through much of June along with other economic challenges, Randy Dougherty came before the Mayor and Council on Monday seeking an extension for his installments. Through working with City Clerk Diana Chavis, the operator was seeking a 30-day extension for each of his $4,000 payments, the first of which was due July 15 and the second of which will be due August 15. Essentially, he was seeking to make the July payment in August and the August payment in September. McGean explained the proposed arrangement to the Mayor and Council.
“The city clerk did receive a request from the beach stand franchise holder for the blocks between 57th Street and 59th Street,” he said. “He is requesting an extension for his payments for 30 days I believe in two installments. One is for $4,000 due July 15 and the other is for $4,000 due Aug. 15.”
McGean said this particular request for an extension was a little unconventional.
“The code is pretty specific,” he said. “The extension request is supposed to come before the due date, but that is not the case here. It would require approval from the Mayor and Council.”
The beach stand operator explained his hardship and the need for an extension of his payments to the town. He did, as a show of good faith, bring a check for $2,000 to Monday’s meeting.
“I got here at the beginning of June,” Dougherty said. “Between the weather, gas prices and the cost of other things, people just aren’t renting. The first six weeks, my revenue was way down. I had 10 days when I made zero dollars and another 15 days when I didn’t even make $100.”
The operator did say business has turned around over the last month or so, but a terrible June buried him in terms of making his payments to the town on time.
“The way it was going, it was looking like I’d be working for nothing all summer,” Dougherty said. “After the Fourth of July, I’ve been doing a lot better. I contacted the clerk and presented her with some options to get caught up if it could be worked out.”
Councilman Mark Paddack commiserated with the operator’s plight and made a motion to approve the requested new terms and payment plan, a motion ultimately approved 7-0 by the council.
“The council does have the authority to amend the agreement regarding the terms of the payment, provided he doesn’t forfeit, because if he forfeits, he would be out,” he said. “He’s offering two installments so I’m going to make a motion that we approve the 30-day extension for each installment with an appropriate penalty determined by the Mayor and Council should he be late.”
Dougherty did bring a $2,000 installment to the meeting on Monday, bringing his total amount paid on the $10,000 franchise to $4,000 for the year thus far, leaving him $6,000 to make up in two more installments this month and in September.
“I brought a check today for $2,000,” he said. “I wanted to come here and give what I could.”
Paddack praised the operator for making a concerted effort to start chipping away at what was owed.
“Thanks for your effort,” he said. “You are showing due diligence and you should be commended for that.”
City Solicitor Heather Stansbury said under the code, the town’s elected officials had the authority to amend the payment program.
“The Mayor and Council can provide other relief where it is deemed appropriate,” she said. “You can find good cause or an extenuating circumstance.”
When asked if there were other operators who had asked for relief, Chavis said there had not been any others this year. When asked if considering providing relief was setting a precedent, Stansbury said she was not aware of beach franchisee operators coming before the Mayor and Council in the past seeking extensions. However, Mayor Rick Meehan said there was precedence fro granting extensions and amending terms for various reasons.
“We have had requests in the past for relief from franchise fees,” he said. “Typically, they are done in advance, but we’ve probably had them after the fact as well. This might be a little different, but he has shown good faith in making a first payment and now a second payment. So, it’s up to the council if they want to give this gentleman some relief.”
Councilman Lloyd Martin asked the operator how long he had been in the beach stand business.
“I’m from Florida and I’ve been in business down there in the past,” he said. “I’ve been in this business for 10 years, but 2020 was my first year in Ocean City.”
Paddack said the operator should be given a chance with the requested payment extensions.
“He is acting in good faith,” he said. “He is showing due diligence and he showed up before the Mayor and Council with a check in his hand. As long as you can continue with the terms of your agreement, I would suggest that we waive any penalties.”
