OCEAN CITY – Resort officials this week agreed to adopt a policy on the abandonment of air rights and city right-of-ways.
The Mayor and Council voted 6-1 in work session Tuesday to approve a policy for the abandonment of air rights and right-of-ways. Following a handful of recent requests to convey alleys and air rights for proposed redevelopment projects, the council tasked staff with developing a more formal policy for when such requests are made.
“This policy essentially formalizes the process that we have been going through for right-of-way abandonment,” said City Manager Terry McGean.
Earlier this year, attorneys representing two separate developers came before the Mayor and Council with requests to convey air rights over two resort alleyways to their respective clients for the construction of oceanfront hotels. However, from those discussions a request was made to have staff bring back a policy on air rights.
“When I went through the policy manual, I realized that although we had a policy on the transfer of real property, we did not have a policy on either right-of-way abandonment or air rights,” McGean told the council this week. “So the city attorney and I worked on creating a policy that does that.”
McGean said the proposed policy essentially formalizes current practices. He said a person seeking the abandonment of a right-of-way or air rights must first approach staff. From there, the public works director will review the request and make a recommendation to the Mayor and Council.
“More specifically what he is looking at is are there utilities in it, is it open to traffic now, that type of thing,” he explained. “The final say on public need for the right-of-way remains with the Mayor and City Council, but the public works director will offer his opinions on that.”
From there, McGean said the Mayor and Council would consider the request.
“You will decide whether or not you wish to pursue it or not,” he said. “If you do wish to pursue it, then it moves to a public hearing and goes through an appraisal process, which is all defined in there. It calls for an appraisal regardless of whether it is the actual right-of-way abandonment or the transfer of air rights.”
McGean noted, however, that the council had the option to waive the appraisal process if it’s believed property of equal or greater value was offered in exchange for the abandonment.
“We’ve had numerous occasions for right-of-way abandonment where a 10-foot east/west alley that is not in use, we abandon that in exchange for the developer giving us a 20-foot north/south alley that provides more use to the council …,” he explained. “You can still require appraisals or, at your discretion, you could say it’s clear that what we’re getting is of equal or greater value and we will forego the appraisal process and move straight to conveyance.”
McGean said the policy also set restrictions on who could request the conveyance.
“It also notes that in the case of right-of-way abandonment, the abandoned right-of-way could only be conveyed to the adjoining property owners. In the case of air rights, those can only be given to a property that owns both sides of the right-of-way,” he said. “And it also places in that policy if air rights are given, approval of the structure that’s going over those air rights requires both the approval of the planning commission and the Mayor and City Council.”
When asked if the proposed policy was different from the one the town had for real property, McGean said it was.
“So real property, anyone can buy,” he said, “and that’s really the primary difference.”
Councilwoman Carol Proctor questioned the public works director’s input was a recommendation or a determination. Officials said it was a recommendation.
“If public works felt they needed it for some particular reason, the request would probably make it onto your agenda, but then, for example, Hal [Adkins, public works director] would come and say we still need this parking lot, for example,” City Solicitor Heather Stansbury replied. “Then you all would decide if you agree with him or not. Typically, you want to have a recommendation from staff.”
McGean said the city engineer used to provide formal recommendations on abandonments. He said the proposed policy changed that.
“It used to come from the city engineer,” he said. “Now we’ve moved that department underneath public works, so we’ve made it the public works director.”
Proctor also questioned the appraise process for air rights.
“Do we have a mechanism in place?” she asked. “How do we define how much air rights are worth?”
McGean said that value would be determined by a real estate appraiser.
“Similar to what we do with real property, we would contact a real estate appraiser and ask them for their opinion,” he replied.
With no further discussion, the council voted 6-1, with Councilman Peter Buas opposed, to adopt the policy.
“I have a conflicting view with the staff,” Buas said. “The town doesn’t own the underlying fee to a right-of-way and therefore it can’t sell it … So I held an opposing view that we can’t actually appraise and sell the right-of-way.”