Less than a month after signing a lease to rent an unused city building to the Ocean City Theatre Company “as is” for $1 a year, the City of Ocean City began to spend $47,558 to fix it up.
In addition, Ocean City Department of Public Works employees logged a combined 37.5 hours of overtime replacing walls, spackling and painting the inside of the building at 1501 West Avenue, even though the lease specified that “the tenant shall maintain, repair and keep in satisfactory condition the interior of the building.”
Invoices from the first three months of 2015 show that the city paid an outside contractor (Capri Consruction) $17,479 to remove existing frame walls, acoustical ceiling and flooring, and to frame new walls around the perimeter of the interior. The city paid GM Mechanical Contractors $9,600 to replace the HVAC system, Premier Electrical Contractors $6,180 to remove and reinstall lighting, fixtures and thermostats, and Erco Ceilings $6,850 to remove and repair ceilings. Shoemaker Lumber was paid $442 for chair rail, brass handrail brackets and other supplies. The invoices alone totaled $47,557.88.
The records were provided by the city in response to a March 30 Open Public Records Act (OPRA) request from OCNJ Daily.
The city also produced records showing city employees worked 37.5 hours of overtime in February and March alone for jobs specified as painting, sanding sheet rock and replacing plywood walls, among other tasks.
There is nothing illegal about the city paying to maintain its own building or volunteering work not required by a lease. But even after a walk-through inspection of the building by a city councilman and a city official after the first reading of the ordinance that authorized the lease in December 2014, nothing was said to the public about the need for such extensive work during a public hearing before the second reading.
The revelation comes at a time when the city just passed a $73.1 million budget that raises the tax levy by 3.3 percent and when many citizens are arguing the merits of priorities for a $79 million capital spending plan for the next five years.
THE LEASE AGREEMENT
The lease of the city-owned building at 15th Street and West Avenue to the nonprofit Greater Ocean City Theatre Company (OCTC) for $1 a year was approved by City Council in December.
The property is a vacant building used by the city in recent years only for the storage of records and city equipment. A state law allows municipalities to lease unused property to nonprofit organizations, according to City Solicitor Dottie McCrosson.
The theater company is creating a performing arts facility used to run its youth theater camps for the city, to stage rehearsals for its full calendar of productions throughout the year, and to create a base for costuming and props. It will not be a location for live performances — which will continue to be staged at the Ocean City Music Pier, Performing Arts Center at Ocean City High School or other locations on the island.
The lease allows OCTC to consolidate “four different locations on the island under one roof and to function with a little more financial stability,” Artistic Director Michael Hartman said at the time.
Council approved the second and final reading of the ordinance that authorizes the five-year lease on Dec. 18. The vote was 6-0 with Council President Tony Wilson recusing himself because he, at the time, was a member of the OCTC Board of Directors. Wilson was not present at the meeting when the first reading was approved.
Councilman Pete Guinosso had toured the facility with Assistant to the Mayor Jim Mallon and expressed concern about mold and about the condition of the entrance to the building from the 15th Street side. But nothing was said by the administration (which would soon authorize the work) about the need to replace the HVAC system, walls, ceilings and to rewire the electrical system.
The property had been remediated for flood damage after Superstorm Sandy and was tested again for mold.
“The property consists of a vacant building and is hereby leased entirely ‘AS IS,’ ” the lease states (see full text of the lease and ordinance). “The LANDLORD makes no representations as to the conditions or suitability of the property or its environmental condition, for any use or purpose.”
The lease goes on to specify that the tenant acknowledges acceptance of the property “AS IS.” It states that the city will be responsible for the roof and exterior of the building, and the OCTC for the interior.
“This includes without limitation the floors, walls, ceilings, windows, plumbing, appliances, electrical and all other parts of the premises,” according to the lease.
But even though the lease appears to place the burden of interior repair on OCTC, public discussion was different.
“Are they taking care of all the repairs inside?” Guinosso asked at the Dec. 4 meeting.
“Yes.they’ll take care of the repairs inside, the cosmetic items,” McCrosson responded. “The more structural capital items, the city will take care of.”
AT LEAST ‘HABITABLE’
Mike Dattilo, assistant to Mayor Jay Gillian and a current member of the Ocean City Theatre Company board, said Thursday that it was the city’s intention all along to provide a building that was “habitable.”
OCTC would then be responsible for outfitting it, and for ongoing interior maintenance. The building had been remediated in the immediate aftermath of Superstorm Sandy but left largely untouched since then.
City Council did not authorize the work, and Guinosso said Sunday that he was unaware of the extent of it.
At the time and again on Sunday, he said he was most worried about flood damage and mold when he toured the building in December.
“I knew the entrance had to be taken care of,” he said. “It would be dangerous for the kids to be in there.”
He said he would have to look into what further improvements were made.
OCTC Artistic Director Michael Hartman said it also was his understanding that the city’s work was to be done only to make the building inhabitable and ADA accessible.
“We are incurring major expenses,” Hartman said, including laying a new floor down. “We’ve been literally slaving to get everything ready. It’s been a lot of hard work from us.”
He said the work comes at a busy time for OCTC with auditions, rehearsals, fundraisers and other preparation for the upcoming season.
He said some OCTC staff is in the building now. When it’s fully renovated, the building’s first floor will be home to rehearsals, classes, offices and a room for props. The second floor will be dedicated to costume storage and construction.
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