OCEAN CITY – An ordinance granting air rights above Washington Lane to the developer of an oceanfront hotel will advance to a second reading, but not before staff reviews accessory uses on the property.
On Monday, the Mayor and Council voted to approve the first reading of an ordinance conveying air rights above a portion of Washington Lane for the development of an oceanfront Boardwalk hotel between 13th and 14th streets. The council also directed staff to review retail uses on the property after receiving an attorney’s letter detailing concerns about the project’s site plan.
“I don’t think the air rights is the issue with this body,” said Council President Matt James. “I think it’s making sure that the air rights that we pass are for a code-compliant project.”
Last month, the Mayor and Council agreed to advance an ordinance conveying air rights over a portion of Washington Lane to a first reading. The developer, MHROC Property Owners LLC, has plans to utilize the air rights to construct a single building connecting properties to the east and west of the 16-foot-wide public alley.
That same week, the developer also sought, and gained, site plan approval from the Ocean City Planning Commission. As proposed, the hotel presented to resort planners calls for fewer amenities, less square footage, and a different configuration than what was initially presented under the developer’s planned overlay district (POD) project. While the developer desires to bring the Margaritaville brand to the property, MHROC’s attorney, Hugh Cropper, told the commission the project may lack the necessary amenities to do so.
“We’re not sure that this version will qualify as a Margaritaville, so we’re asking it be approved as a hotel …,” he said at the time. “It will be a flag, it will be a brand. But Margaritaville, as you can imagine, has some very specific requirements for Margaritaville, and it appears this structure, unfortunately, may not meet those requirements.”
Back on the Mayor and Council agenda Monday, a motion was made to approve the air rights ordinance on first reading, but to direct staff to review accessory uses detailed in the approved site plan. During public comments, G. Hale Harrison, representing his family’s company, Harrison Hall Hotel Inc., took issue with the hotel’s nonconformity, density, and proposed retail stores. He argued the R-3 zoning district did not allow the shops to have exterior entrances from the Boardwalk.
“For those reasons, the site plan is not conforming to the city code, and the City Council should not grant air rights to a project or site plan that’s not conforming to the city code,” he said.
Cropper, however, told the Mayor and Council this week the issue being considered was the conveyance of air rights.
“Although we think the site plan is compliant, the issue is not really site plan issues,” he said. “It’s whether or not the air rights are still necessary for a public purpose.”
During council comments, Councilman John Gehrig acknowledged that the Mayor and Council had received a letter from G. Macy Nelson, an attorney representing Harrison and several other nearby property owners. He asked City Solicitor Heather Stansbury to address the attorney’s concerns regarding the project’s accessory uses.
“Tonight before the Mayor and City Council are the air rights, and the charter does task the Mayor and City Council to simply decide whether the air rights are continued to be needed for public use,” Stansbury replied. “It’s very clear in your charter. What’s also clear in your charter is that you don’t – as much as I hesitate to tell you what you can and can’t do – you don’t have authority over this type of site plan because it does not need a POD. So any decision about whether the site plan is code compliant or not technically rests with the planning commission. And the planning commission did find that this site plan was code compliant.”
Acknowledging the concerns of nearby property owners, Stansbury said the council had three options – to grant the air rights request, deny the air rights request, or grant the request with a directive for staff to review the accessory use issue prior to second reading.
She noted that while the property owners took issue with the site’s nonconformity, that issue had already been determined by the town’s zoning administrator.
“She made the determination that nonconformity existed as of September 21, 2021,” she said. “So it would have lapsed September 21, 2023. But as I indicated, they did go to the planning commission on September 19, 2023 and got that site plan approval.”
While he acknowledged concerns about the project’s site plan, Councilman Peter Buas said it did not fall within the Mayor and Council’s purview.
“We’re a policy board, not a management board,” he said. “And our charter delegates management appropriately to the zoning administrator, with the support of the planning commission. As far as we’re concerned, the only thing in front of us is air rights, and we only need to make two findings, that it’s no longer needed for public purpose and that it’s in the best interest.”
After further discussion, the council voted 6-0, with Councilwoman Carol Proctor absent, to approve the first reading of the air rights ordinance and to have staff review the accessory use issue prior to the second reading.
