Council Conveys Right-Of-Way To Margaritaville Developer

Council Conveys Right-Of-Way To Margaritaville Developer
A rendering shows the proposed Margaritaville Hotel and Resort complex from the Boardwalk. Image courtesy of Becker Morgan Group

OCEAN CITY – A key next step in the development of the potential Margaritaville project downtown was taken this week with approval of an ordinance on second reading that will abandon a section of right-of-way along Baltimore Avenue to the developer, the first of what will likely be several similar ordinances.

A major renovation of the Baltimore Avenue corridor between North Division Street and 15th Street is in the works including undergrounding utilities, widening sidewalks and improving the overall aesthetics along the prominent corridor in the resort.

The project will be done in phases, although the exact timeline remains uncertain, and the final price tag is unknown.

In the meantime, the town is in the process of abandoning and conveying an unused portion of the Baltimore Avenue right-of-way to the private-sector property owners along that section of the corridor. Baltimore Avenue is somewhat unique in that the original deeds show the right-of-way as 75 feet, but the current roadway only utilizes about 45 feet from curb to curb.

A review of the ancient deeds for Baltimore Avenue reveals a no man’s land of sorts of about 20 feet in some areas that will eventually be deeded back to the private property owners along the corridor.

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Over the decades, private property along the corridor has steadily encroached on the original right-of-way platted over a century ago. In some cases, the private property owners have signs, landscaping or even parking areas in the long-forgotten town-owned right-of-way.

For that reason, the town is in the process of abandoning and conveying that narrow strip of right-of-way back to the private property owners. It’s a process that will likely take several steps and multiple ordinances, but the first applicant in the process is the developer of the proposed Margaritaville project along Baltimore Avenue between 13th Street and 14th Street.

A planned overlay district has been approved for the proposed Margaritaville project, which requires a site of at least 90,000 square feet to qualify for the designation.

While the portion of right-of-way proposed for abandonment and conveyance to the Margaritaville developer adds up to about 6,000 square feet, it is needed for the project to meet the requirements for the planned overlay district (POD) designation.

Again, all of the property owners along the corridor will have the opportunity to apply for and receive the narrow strip of right-of-way, but it just so happens the Margaritaville project is the first.

On Monday, the Mayor and Council had before them for second reading an ordinance that will convey the 6,000 square feet of right-of-way to the developer. Local resident and former councilman Vince Gisriel called into question what appears to be an accommodation for the proposed massive project.

“When I first heard this plan, it seemed rather innocuous to me,” he said. “As I understand it, this ordinance tonight is one of several possible ordinances. This ordinance addresses a single block. I’m concerned you’re setting a precedent that could hurt the town.”

Although it wasn’t related to the ordinance before the council on Monday, Gisriel pointed out the town has already essentially granted to air rights over an alley that bisects the proposed Margaritaville project to the developers.

He essentially said at each step of the process the town has made accommodations for the project.

“If you pass this, it includes the abandonment of 6,000 square feet,” he said. “I don’t think that was the original intent of the planned overlay district. I think 6,000 square feet has a tremendous amount of value and you’re ready to just give it away with this ordinance.”

Councilman John Gehrig pointed out the eventual abandonment and conveyance of the long-forgotten narrow strip of right-of-way along the corridor was going to made available to all of the property owners and the Margaritaville project just happened to be first.

“The Baltimore Avenue conversation has been going on long before my time up here,” he said. “It’s not just this one abandonment and conveyance. It’s available to every single property owner along that strip. It’s not just an ordinance created for a single property owner. They have an opportunity and we’re trying to expedite it for them.”

Councilman Mark Paddack agreed the right-of-way abandonment and the Baltimore Avenue revitalization project has been discussed for decades and it was just a next step in that process.

“This is not something new,” he said. “This predates me but at some point, that last component between North Division Street and 15th Street revitalization is here before us now. It was talked about by previous councils long before this group took the leadership role to say let’s take a look at this for the future.”

Paddack questioned Gisriel’s assertion the town was simply abandoning the strip of right-of-way without any compensation. He said the Margaritaville project just happened to be the first applicant.

“You say the town is just giving that property away,” he said. “That property is owned by the town but it’s being utilized by adjoining property owners for their signs, for their steps, for parking but the town wasn’t taxing the use of that property. Now that we’re moving forward with this as the first, it’s a boiler plate for the start of the rest of the properties. It has to start somewhere, and this is the first one.”

Paddack said the town would be receiving increased tax revenue from abandoning and conveying the strip of right-of-way back to the private property owners.

“I want to remind the public this property is going back on the tax rolls,” he said. “It’s going to generate revenue back to the Town of Ocean City that wasn’t collected before. It helps us keep this constant yield tax rate where our residents and non-resident property owners are not seeing tax increases.”

Paddack said any measures that increase the tax base allows the town to continue to offer the services and amenities in provides to residents and guests.

“We have the vision and foresight to create and improve our employee pay, hire more employees to keep the town clean and safe as best we can,” he said. “It’s going to be taxed. No, it won’t be a lot of money, but it will create revenue for the town to allow us to do what we do.”

Although it was not germane to the right-of-way abandonment and conveyance issue, Paddack also referenced the conveyance of the air rights over the alleyway that bisects the potential Margaritaville property as another example of revenue generation.

“Overall, for the project, when we look at the air rights, there are going to be hotel rooms in those upper levels over that alleyway,” he said. “I share some of the same concerns as the residents in the area about the density of the project, but this project currently fits into the strategic plan and planning and zoning are going to hash it all out, but those rooms are going to generate room tax revenue from the day they open until 30 or 40 or 50 years down the road.”

After considerable debate, the council voted 6-1 with Council President Matt James opposed to approve the ordinance on second reading that will convey the narrow strip of right-of-way between 13th Street and 14th Street to the private property owner, facilitating a next step in the Margaritaville development process.

About The Author: Shawn Soper

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Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.