OCEAN CITY – Officials in Ocean City this week voted on first reading to approve an ordinance allowing a downtown corporation to use Inlet parking lot revenues to pay off debt associated with its model block project.
On Monday, the Mayor and Council had before it a first reading of an ordinance authorizing a $625,000 grant to the Ocean City Development Corporation (OCDC) to satisfy a bank note for the organization’s model block properties. Mayor Rick Meehan said the funds would come from the Inlet parking lot revenues.
“To be clear, this comes out of the funds set aside, or revenue that is dedicated to the OCDC from the Inlet parking lot,” he said. “It’s out of that fund, not out of the general fund.”
Earlier this month, OCDC Executive Director Zach Bankert and OCDC Board President Kevin Gibbs came before the Mayor and Council with a request to use $625,000 in Inlet parking lot revenues to pay off its existing bank note. Representatives told officials that eliminating the debt would put the organization in a better financial position to further develop the model block in the future.
“To date, we still carry a debt of about $625,000 associated with the model block property,” Bankert told the council. “The debt on that is an adjustable bank note, and that is soon to adjust with the interest rates where they are. We would like to use the Inlet parking funds to pay off that debt because we aren’t quite for sure what that new rate is going to be, other than high.”
Since 2003, the OCDC has received a portion of Inlet lot revenues as a reserve fund of sorts for projects in the downtown area.
Bankert told officials earlier this month the organization’s largest project has been its model block project, located between Dorchester and Somerset streets. Over the years, the organization has purchased and demolished properties in the model block with a goal of attracting a sizeable development. Currently, it sits as a popular parking lot.
But officials say they are seeking $625,000 to pay off debt associated with the project. City Manager Terry McGean said the Inlet parking lot fund had nearly $1.2 million dedicated to OCDC.
“The way the code is set up is the fund was designated for the Ocean City Development Corporation, but it does require the council’s approval by ordinance,” he told the council earlier this month. “The actual fund balance earns interest. As of last week, it was $1,165,697.”
With no further discussion this week, the council voted 6-0, with Councilman Peter Buas absent, to approve the first reading of the ordinance.
