OCEAN CITY – A divided Ocean City council this week approved moving funds from the future Baltimore Avenue redevelopment project to the construction of a new midtown fire station after the volunteer fire company reportedly backed out on an offer to contribute to the cost.
In early 2021, the Mayor and Council voted to essentially replace the aging and dilapidated Station 3 firehouse at 74th Street with a new facility in the parking lot of the Public Safety Building. The midtown Station 3 firehouse was built in 1969 and expanded in 1987. In the decades since, it has fallen into disrepair and no longer meets the needs of the department.
The council approved going to the bond market to fund the new state-of-the-art fire station at 65th Street as part of a larger $18.3 million bond sale that also included the redevelopment of the downtown recreation complex along the bay between 3rd and 4th streets, storm drain repairs and an installment in the future redevelopment of the Baltimore Avenue corridor between North Division Street and 15th Street.
In the many months since, the estimated cost of the new fire station has continued to increase beyond the original estimate of $8 million. In addition, as part of the funding mechanism, the Ocean City Volunteer Fire Company (VFC), which owns the property on which the existing station sits, verbally agreed to sell the property and contribute the proceeds of the sale toward the cost of the new station, a sale estimated at around $1 million.
On Tuesday, City Manager Terry McGean presented new cost estimates for the fire station at 65th Street.
“When the bond issuance for Fire Station 3 was approved for sale in 2021, the estimated cost of the project was $9 million,” he said. “At that time, the volunteer fire company verbally committed to selling the property where the existing station is located and putting the proceeds of that sale toward construction of the new station. Therefore, the amount of the bond funds dedicated to the new fire station was $8 million.”
McGean also informed the council the VFC had since had a change of heart about selling the property and donating the proceeds toward the new station.
“After the bond sale, for lack of a better phrase, the VFC had a change of heart and decided they did not wish to sell the property where the existing station sits and, instead, preferred to keep the property as an income generator,” he said. “Despite numerous meetings between the VFC and fire chief, the city manager, the city attorney, the mayor and council president, the VFC has not changed their position.”
McGean explained the initial bids for the project received by the construction manager increased the cost of the building from $9 million to $12.7 million. He said staff has since been working with the construction manager and the architect to reduce the cost of the project.
As a result, the estimated total cost has been reduced from $12.7 million to $11 million. The approved project included flex office and live-in space anticipating future needs for those areas. The project cost can be reduced further if those flex spaces are left unfinished.
In addition, the fire chief has worked with the VFC and the Career Firefighters and Paramedics Union of Ocean City, or IAFF 4269, which have agreed to initiate a fundraising effort to furnish the new fire station. Staff also looked into reducing the number of engine bays at the new station by one, but the savings would only be around $217,000 and it was determined that savings wasn’t enough to justify reducing the number of bays. After making the reductions, McGean and staff have been able to reduce the overall estimated cost of the new station to $10.5 million, which does not include the relied-upon $1 million contribution from the VFC from selling the existing property.
“The OCVFC had a change of heart and rather than sell, they would like to keep the property as an income generator,” he said. “We were unsuccessful in getting them to change their mind. In August, the cost had risen to $11 million with no contribution from the VFC. We have done everything we can to cut the cost of the building and we now stand at around $10.5 million.”
McGean explained the total bond sale for a handful of capital projects was $18.3 million. It was divided between the redevelopment of the downtown recreation complex at $4.6 million, although the estimated cost went up to $5.4 million. However, the town was successful in securing a $1 million federal grant for the project, which reduced the town’s out-of-pocket cost.
Other projects included in the bond sale included $8 million for the new Station 3 firehouse and $1 million for storm drain repairs, with the balance diverted to the redevelopment of the Baltimore Avenue corridor. The latter was left open-ended because there was not a firm estimate on what will likely be a years-long project. Therefore, the recommendation was to divert bond funding from the Baltimore Avenue project to cover the increase in the cost of the new fire station from $8 million to $10.5 million.
“The recommendation is to move forward with Station 3,” said McGean. “It is no longer functional. There is a kitchen in an engine bay and there is just one open living space. The recommendation is to move funds from Baltimore Avenue to Station 3.”
Council Secretary Tony DeLuca made a motion to approve the recommendation and move funds from the Baltimore Avenue project to Station 3, but not before a lengthy discussion. Councilman John Gehrig said he had concerns about the moving target on the cost estimate and the VFC’s change of heart with the sale of the property.
“I’m a little annoyed,” he said. “At strategic planning, we talked about fire stations and equipment. I’d really like to know where we stand with the fire department. I’d like to know what we really have with the fire department. What’s the timing for all of this?”
McGean said time was of the essence with the rising costs changing the estimate often.
“We would like to get started as soon as we can,” he said. “It’s going to take us a year to build.”
Gehrig asked if the town’s relationship with the VFC was strained because of the reversal of the plan to sell the existing site and contribute the proceeds.
“I don’t know if the relationship is deteriorating or what,” he said. “They do own the property. I think we need to have a meeting with them. Has there been any discussion about building a new station on the existing site and remaining partners?”
McGean said that solution had been explored, but simply wasn’t practical.
“We could do that and scale this back to $6 million or $7 million, but we feel that would be throwing good money after bad. I haven’t heard any inclination for them to contribute to a new station on that site.”
Mayor Rick Meehan said the town has always partnered with the VFC on the purchase of equipment, but the formula has changed over the years.
“The agreement reached years ago split the cost of equipment 50-50,” he said. “The town now pays 80-20. Times have changed dramatically.”
Meehan said he was taken aback by the VFC’s reversal on the sale of the existing site.
“As far as the new station goes, their position has changed dramatically,” he said. “Their president basically said it didn’t fit their business model and they did not see how they could recoup the $1 million. I was a little surprised by that. I look at it as an investment for them. I don’t know if their mission is financial or a commitment to public safety.”
Fire Chief Richie Bowers pointed out the existing Station 3 is largely used by full-time career firefighters and paramedics and the current conditions are inadequate. For those reasons, Meehan said it was likely time to move forward with the new Station 3.
“We’re going to have to build a new fire station,” he said. “If you put it off, it’s only going to cost more. We have committed to that, and our commitment shouldn’t change. We need to have the best service and invest in the best equipment.”
Councilman Peter Buas questioned if moving funds from the Baltimore Avenue project to pay for the new fire station was appropriate.
“I have a concern this is a little premature,” he said. “I don’t know if we need to move funds from a project we all decided was critical.”
Council President Matt James has been reluctant to support the new fire station for a variety of reasons throughout the lengthy approval process and remained so on Tuesday.
“I’m going to remain consistent,” he said. “It’s a big number. I would support a modern fire station if the numbers worked. Something needs to be done, but I don’t know if this is the answer.”
Councilman Frank Knight said he supported moving the funds from the Baltimore Avenue project if it meant getting the new fire station underway.
“I’m definitely in favor of doing this,” he said. “This fire station is for public safety and for our full-time people. I’m a little surprised the VFC pulled their $1 million off the table.”
In the end, the council voted 4-3 with James, Gehrig and Buas opposed to approve the motion as presented and fund the $10.5 million fire station with bond funds moved from the Baltimore Avenue project.
