Local Developer: O.C.’s $9 Million Property Deal Would Benefit Public “For Decades”

Local Developer: O.C.’s $9 Million Property Deal Would Benefit Public “For Decades”

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Developer Sean Scarborough, pictured here with one of his company's projects, believes Ocean City's land purchase would complement other public property and facilities nearby. (Courtesy Scarborough Properties)

By Donald Wittkowski

Ocean City’s proposed $9 million purchase of nearly a block of property “makes perfect sense” and must be completed before the opportunity is lost for the public’s benefit, according to a prominent local developer.

The strategically located land would connect Emil Palmer Park, the Ocean City Community Center and other facilities already owned by the city in a public corridor stretching from 15th to 20th streets, Sean Scarborough said.

“This affords synergistic planning opportunities for decades to come. The assembled property is worth more than the sum of its parts,” said Scarborough, an Ocean City resident and owner of Scarborough Properties, a commercial and residential development company.

The city wants to buy the land – a former Chevrolet auto dealership bordered by Simpson and Haven avenues between 16th and 17th streets – and preserve it as open space or possibly use it as the site for a new public safety building for the police department and municipal court.

Scarborough believes that such a large piece of property is actually a “cheap” buy at $9 million, considering its potential as a development site for new housing. The city hopes to acquire it to prevent the construction of a high-density type of housing known as “coastal cottages.”

A now-closed auto dealership at 16th Street and Simpson Avenue is the centerpiece of a nearly block of land the city is looking to buy for public use.

In a statement to OCNJDaily.com, Scarborough praised the city for “respecting the law and not pursuing a fool’s errand” by zoning down the property to reduce its overall value. He said zoning restrictions would simply result in litigation that the city would ultimately lose.

“I say we are fortunate because too often local thuggery will take over and we go down the litigation path after action is taken to down-zone a property in order to reduce or eliminate the property having any value,” he said. “That won’t happen here, and shouldn’t happen here. The value is real and it is more valuable to us as a city, given we own the surrounding real estate, than it is to anyone else.”

The proposed land deal has hit a potential snag amid efforts by the local government watchdog group Fairness In Taxes for a public referendum giving voters a final say on the transaction. FIT has started a petition drive and needs 400 valid signatures by Oct. 10 to have a referendum placed on the ballot.

In recent appearances before City Council, FIT members have contended the city is overpaying for the land and has relied on what they argue are two flawed property appraisals. The city had two independent appraisals conducted, with one setting the value at $8.3 million and the other at $9 million.

“We believe it should be purchased, but the city is paying $2.5 million to $3 million too much for the property,” FIT said on its website in an update on its petition drive.

Mayor Jay Gillian, who is pushing for the land deal with City Council’s support, maintains that the two appraisals accurately reflect the property’s value. Gillian said the property owners, Jerry and Harry Klause, want to sell the land to the city to have it preserved for public use, but are sticking to their asking price of $9 million.

In remarks to City Council last week, Jerry Klause said his family is willing to consider offers from housing developers for the land if the deal with the city falls through. The mayor said the Klauses have court approval to build 29 densely packed coastal cottages on the site, a type of housing development he wants to prevent by having the city buy the property.

Empty land behind the former auto dealership property at 16th Street and Simpson Avenue is also being eyed by the city.

Scarborough, meanwhile, said in an interview Wednesday that the land would serve as a “keystone” by helping to link up other surrounding property and facilities already controlled by the city.

“It makes perfect sense,” he said.

He argued that the city’s opportunity to acquire the property “cannot be missed.”

“Mayor Gillian, Council and the administration should be commended and deserve our support for having the courage to undertake a deliberative and thorough process to make a significant and long-term investment in our community that will improve the quality of life in Ocean City for all. Do it,” Scarborough said.

Throughout its attempt to buy the land, the city has “observed the rules of the road” and avoided the pitfalls of overpaying, he believes.