City Prepares Funding to Possibly Buy Former Car Lot

City Prepares Funding to Possibly Buy Former Car Lot

Heavy construction machinery clears away rubble from the now-demolished car dealership that once occupied the property.


Suggesting that both sides are closer to reaching a deal, the city is expected to introduce a funding package this month to buy a coveted piece of land to protect it from housing construction.

For more than a year, the city has been attempting to acquire the former car dealership property from the private owners to preserve it as open space instead of seeing it turned into a housing project that would add to the town’s overdevelopment.

City Solicitor Dorothy McCrosson said the property owners, brothers Jerry and Harry Klause, of Klause Enterprises, would prefer to sell the land to Ocean City for public space rather than moving ahead with their plans to build housing.

“We are in agreement that the best thing for the properties is to be in the city’s hands as open space,” McCrosson said Thursday night while updating City Council on the negotiations.

Mayor Jay Gillian said in a statement Friday that Council is expected to consider a bond ordinance at its Jan. 23 meeting that could finance the property’s “potential acquisition.”

McCrosson did not disclose the proposed purchase price in her remarks to Council. Doug Bergen, a city spokesman, said in an email Friday that the city has no further comment about the negotiations beyond what McCrosson told Council.

City Solicitor Dorothy McCrosson, shown in an earlier photo, tells City Council that “good faith negotiations” continue for the possible land deal.

Gillian hopes to preserve the land for open space and use a portion of it for parking for the adjacent Ocean City Community Center, a municipal complex that attracts hundreds of thousands of visitors each year. The complex includes the Free Public Library, the Arts Center, the Aquatic & Fitness Center, the Historical Museum and the Seniors Center.

The mayor is planning to hold a town hall meeting sometime in the first quarter of 2020 to gather public input on what should be done with the land if the city acquires it.

McCrosson told the Council members that “good faith negotiations” continue between the city and Klause Enterprises.

Avery Teitler, an Ocean City attorney representing Klause Enterprises, could not be reached for comment Friday. Previously, Teitler said the Klause brothers are serious about developing the housing project, but he did not rule out the possibility of negotiating a deal with the city.

In the meantime, the property is being cleared by large excavators as Klause Enterprises prepares to build a 22-lot housing development if it doesn’t reach agreement with the city.

The block of land is bordered by 16th and 17th streets between Simpson and Haven avenues. It once served as the location for the former Perry-Egan Chevrolet dealership, which has since been demolished.

A sign attached to a chain-link fence surrounding the property gives a sneak preview of the housing project.

McCrosson noted that the city would prefer for the land to be cleared before it acquires it. Large chunks of concrete and other rubble are being removed by the excavators at this time.

The property is surrounded by a chain-link fence. An architectural rendering of the project is attached to the fence, giving a sneak preview of what the new homes will look like if built.

A sign attached to the fence notes that the housing lots are selling from $599,000 to $749,000 and that settlement is expected in the spring of 2020. It also says that three lots are under contract.

Plans for the housing project follow an unsuccessful attempt by the city to acquire the land in 2019 for $9 million. The deal fell through when the community group Fairness In Taxes circulated a petition drive for a voter referendum to block the purchase.

During the petition drive, FIT said it supported the idea of the city buying the land for open space, but argued that the proposed $9 million purchase price at that time was too high.

In public remarks to City Council at Thursday’s meeting, FIT President Dave Breeden said the city is now trying to buy the property for about $6.5 million.

McCrosson did not mention any figures while speaking to Council, but did say that a final price has not been negotiated.

The city conducted new property appraisals as part of its most recent round of negotiations with Klause Enterprises.