OCEAN CITY – While they ultimately approved moving forward with the next steps in the planning process for the redevelopment of the Baltimore Avenue corridor, resort officials this week were taken aback to learn the project’s estimated price tag had nearly doubled from the original $20 million and will now likely take four years instead of two.
In recent years, a major renovation of the streetscape along the Baltimore Avenue corridor from North Division Street to 15th Street has been in the works and is currently moving through the design phase. The project includes undergrounding the utilities along the corridor, widening the sidewalks and improving the landscaping.
City Manager Terry McGean, in his prior role as city engineer, prepared several alternatives to present to the Mayor and Council and the elected officials gave their blessing to the final alternative and green-lighted the next steps in the process. In addition to the listed improvements, the proposed project also includes abandoning an unused portion of the original platted Baltimore Avenue back to property owners along the corridor, many have whom have been utilizing the space for parking, signage or landscaping, for example.
When McGean presented an update on the project to the Mayor and Council on Tuesday, his presentation came with some grim realities. The project estimated at $20 million has seen its new estimate doubled for a variety of reasons, including supply chain issues for the utility companies that will underground their equipment, inflation, materials costs, and other factors.
“The capital improvement plan imagined a $20 million project and we’re almost double that now,” he said. “If we had to do it all, of the $39 million total, that would be $2.7 million in debt service each year over a number of years. It’s just not something we could absorb with our current revenue sources.”
In addition, the original construction timeline of two years has now doubled to four years, which has also contributed significantly to the doubling of the original estimate. McGean explained when the last section of Baltimore Avenue was redeveloped years ago, crews began work shortly after Labor Day. Now, with so many major special events in the fall, work on the corridor could not likely begin until after Columbus Day in October.
Council Secretary Tony DeLuca made a motion to move forward with the next steps recommended by McGean, including finishing the design, which is now at around 60%, approving the revised four-year construction schedule and beginning the easement abandonment process. That touched off a debate about the ballooning cost of the project. Councilman Lloyd Martin said he continued to support the project, but not with the price tag doubling.
“You had me at $20 million,” he said. That’s a lot of money. At $40 million, it’s just too much money. I believe we can continue to do a lot of these things with moving forward with the design and the right-of-way abandonment process, but $40 million is just too much for me. It could $50 million by the time we’re ready for construction.”
Martin said while he continues to support moving forward with the next necessary steps in the process, such as completing the design phase and beginning the easement abandonment process, he could not support spend $40 million on the project as is now estimated.
“We have major infrastructure in town that’s falling apart,” he said. “The storm drains are going in and that’s great, but the roads aren’t paved yet. We need that money to fix our infrastructure problems we have right now.”
Councilman Mark Paddack said he supported the motion to move forward with the next necessary steps in the process without committing to financing the entire project.
“It started at $20 million and now it’s at $39 million,” he said. “We’re still in the design phase. I will be voting to move it forward to allow it to continue. Maybe we need to be patient as we work through this next third-quarter recession and maybe even a fourth-quarter recession.”
Council President Matt James clarified DeLuca’s motion. He said there was no decision on the table during Tuesday’s work session about the final funding for the project, a decision which will likely come when federal and state grant funding and other funding sources are identified to supplement to town’s contribution.
“There will be a time as we near 100% design when we can have the discussion about the cost,” he said. “Right now, we have an estimate but we’re not approving any funding. Basically, we just approving moving forward with the plan.”
Councilman Peter Buas spoke to the importance of the project and said he remained confident there would be grants and other revenue sources to offset the town’s cost when the design was complete and the other steps in the process were completed.
“This is the most important project the town is doing in the next two decades,” he said. “We have a long history of obtaining grants and that will make this affordable.”
Mayor Rick Meehan said the motion on the table was to simply move forward with the final design, approve the adjusted construction schedule and begin the easement abandonment process.
“It’s important we get all of these things lined up so we can get a true cost estimate when we’re ready to move forward with construction,” he said. “We’ll be able to evaluate the real-time numbers when we get to that point.”
Councilman Frank Knight agreed.
“I support this project 100%,” he said. “I have for a number of years. I agree with the mayor and Councilman Buas.”
Public Works Director Hal Adkins explained the phasing of the project. He said the first phase would include undergrounding the utilities from 15th Street south to 10th Street. The second phase would include the streetscaping work in that section while the utility undergrounding would be going on in the next session from 1oth Street to 5th Street, and finally from 5th Street to North Division Street. Because Baltimore Avenue is a major thoroughfare in the resort, the work would be halted each spring and renewed in the fall.
“Over a period of years, the first phase from 15th to 10th would look finished,” he said. “Then, 10th Street to 5th Street would look finished, and finally 5th to North Division.”
Adkins explained the State Highway Administration (SHA) is prepared to begin repaving sections of Baltimore Avenue and the funding is in place. SHA has been holding off on repaving the section from North Division to 15th Street while the town prepares its redevelopment plans for the corridor, but there is not a blank check and there is some risk of the state paving funds going away.
“You’re going to have to make some hard decisions,” he said. “If you shelve the project, please realize the following: SHA is rolling into town this fall. They are going to resurface Baltimore Avenue from South 1st Street to North Division Street. If you shelve the project, it will become what do we do now from North Division to 15th Street because that roadway will not survive while we wait for funding for this project.”
McGean said reverting ownership of the easements along the corridor back to the property owners was a step that could get underway shortly.
“We can do a lot of that now,” he said. “If there are developers out there that want to move quickly, we can do that. We’ve done that already with the Margaritaville project.”
McGean said letters will be sent out to the property owners adjoining Baltimore Avenue with drawings showing where the new property lines will be.
“I imagine three basic processes for the abandonment,” he said. “The first group will be saying sign me up and they are ready to go. A second group will be saying I understand the project, but can you come out and explain how it will impact my property, and the last group will tell us they are not ready at this time.”
After considerable debate, the council voted 5-1 with Martin opposed and Councilman John Gehrig absent to move forward with the next steps in the project.
