OCEAN CITY – Resort officials this week approved a capital improvement plan that features a phased Baltimore Avenue redevelopment project beginning in fiscal year 2025.
After a contentious debate Tuesday, the council voted 5-1, with Councilman Peter Buas opposed and Councilman John Gehrig absent, to approve the fiscal year 2024 capital improvement plan (CIP). While the capital planning document was initially presented with a scaled-down Baltimore Avenue redevelopment project beginning in the coming fiscal year, it was amended to include a larger, phased redevelopment of the corridor beginning in 2025.
“Baltimore Avenue should not be removed,” said Councilman Frank Knight, “but just moved down the road one year while we try and get funding.”
In January, staff presented the Mayor and Council with the draft CIP, which listed a major redevelopment project along Baltimore Avenue from North Division to 15th streets. Last month, however, the council agreed to put a pause on the project until grant funding opportunities could be explored.
Some of the work proposed for the phased Baltimore Avenue project included undergrounding utilities, widening sidewalks and improving the overall streetscape. While the Baltimore Avenue project was first presented with a price tag of $20 million – funded in part by a municipal bond sale and a combination of potential state and federal grants – the estimated price tag in recent months has more than doubled. To that end, town staff were tasked with providing the council with a breakdown of the project’s different components and the funding needed to achieve them.
Back on the agenda at Monday’s work session, City Engineer Paul Mauser presented the Mayor and Council with a revised CIP that included two separate projects for the Baltimore Avenue redevelopment. The first project, beginning in fiscal year 2024, would simply underground utilities from North Division to 15th streets at a cost of $26.3 million, while the second project, beginning in fiscal year 2028, would redevelop the easterly sidewalks along the same corridor at a cost of $4.2 million.
“When we last had this discussion, council asked me to look at the possibility of what the impacts would be if instead of doing the full project … to look at the cost of what it would be to simply underground all the utilities and do none of the other improvements,” City Manager Terry McGean said. “We did that.”
Councilman John Gehrig, however, questioned if the project was fair to other residents in town.
“The $26 million plus the $4 million, it’s a $30.3 million project with roughly $11 million in interest,” he said. “So it’s $41.3 million for a project focused on 15 streets in town, and you are asking for the entire city to pay for it equally when it benefits primarily a certain number of people. It is irrational to think there is equal benefit on 146th Street as there is on 2nd Street.”
Councilman Peter Buas argued that the project would benefit the entire town.
“As far as property values go, it affects the whole town not just one person,” he said.
Gehrig, however, said Buas should recuse himself from the conversation, pointing to properties his family owned along the corridor.
“The point here is if you are going to say property values are going to increase, which I disagree with, then you probably shouldn’t discuss it, certainly not vote on it,” he said.
Buas said he had no personal involvement.
“You know that is not my motive and the fact you are accusing me of that is actually disgusting,” he said.
Gehrig said he also took issue with the revised CIP, as the first draft proposed $18 million for the project in fiscal year 2024 while the second draft proposed $26.3 million for the project in fiscal year 2024.
“The only option in front of us is to spend $8 million more next year,” he said.
McGean noted the first draft of the CIP broke the $44 million project into multiple phases, while the revised plan only included the undergrounding component at a cost of $26.3 million. When asked about grant funding opportunities, McGean said the revised project would be financed through a bond sale.
“If we proceed in FY24, we will not be able to get the grant money in this matter …,” he said. “Whenever the decision was made to pause the project, the idea was we were going to shoot for grant funding because that pause gave us time to deal with grant funding. My understanding was to come back with this concept, just get the undergrounding done.”
Gehrig said he wanted to see the project planned over multiple years, with different cost estimates for different aspects of the project. He said the redevelopment of Baltimore Avenue was initially proposed as a public safety project, with a focus on widening the sidewalks.
“This project started because of public safety and sidewalks,” he said. “Then it became about undergrounding utilities.”
He added that there should be a town-wide plan for undergrounding utilities. He argued that the proposed project would mainly benefit neighboring property owners.
“I won’t disagree that there’s some benefit, but it’s not the same benefit,” he said. “So when we talk about how this is funded … maybe the people who are benefiting the most should pay the most.”
Council Secretary Tony DeLuca disagreed, pointing to specific projects in the CIP that benefit the entire community.
“To think improving Baltimore Avenue doesn’t benefit the entire town is really absurd,” he said.
When asked for staff’s opinion, Public Works Director Hal Adkins said he did not support the project, noting that the cost of undergrounding utilities was roughly $2 million per block.
“I thought the original goal of this project was pedestrian movement …,” he said. “If that was the original goal, it’s still achievable, and it’s achievable by building a wider sidewalk on the east side only where the predominant pedestrian movements would occur. You don’t have to do all this extra stuff to achieve this wider sidewalk on the east side only.”
McGean, however, said he supported the larger, phased project that included undergrounding utilities, widening the sidewalks and improving the streetscape. He said delaying the project a year would give the town more time to seek grant funding.
“If it was up to me, what we would do is what I originally talked about, which was to split the whole thing up and do it in phases …,” he said. “I think that brings the debt service down.”
Gehrig said he wanted staff to get a quote for just widening the sidewalks. Mayor Rick Meehan, however, said he also supported the undergrounding of the utilities.
“This is us redeveloping the infrastructure in that area, and I believe it does make a difference, not only visually but to encourage people to redevelop …,” he said. “I think we should do the project right.”
Gehrig, however, reiterated his concerns about the cost.
“If a community wants their utilities undergrounded, they can pay for it themselves,” he said. “There’s got to be a way, on a per project basis, we can bill these people.”
When asked if the Montego Bay street paving project included in the CIP should be paid for by its residents, Gehrig disagreed.
“We have a plan for all the infrastructure,” he said. “This is a pet project. That’s what this is, a pet project for a specific area.”
After further discussion, the council voted 5-1 to proceed with the $44 million, phased redevelopment project, starting in fiscal year 2025, and to amend the CIP to reflect those changes. Gehrig left the meeting before the council voted.
