Study Concludes Parking Garage Would Lose Money for Ocean City

By DONALD WITTKOWSKI The likelihood of Ocean City building a new parking garage seems remote following a feasibility study that found such a project would be expensive to develop and would be a money loser to operate. A parking consultant looked at the possibility of the city building a multilevel garage at three potential locations near the Boardwalk and one in the downtown business district. All of the sites are owned by the city and currently serve as surface parking lots. The 22-page study by the DESMAN consulting group analyzed the construction costs, financing and operating expenses of building a parking garage on each site and concluded that such a project would lose money for the city – no matter which location was chosen. “The preliminary financial analysis for the addition of an Ocean City public structured parking facility suggests that such an improvement would not be self‐liquidating. Projected parking revenues from the facility, regardless of site, will not be sufficient to cover anticipated debt service, operating and maintenance costs and expenses,” the study concluded. “This result is consistent with our experience with municipal public parking structure improvements. Typically the analysis of a stand‐alone facility does not generate sufficient revenue to cover the costs and must rely on existing excess parking revenues, supplemental funding sources or the municipal tax base,” DESMAN added. The locations that were considered included the downtown parking lot on Central Avenue behind City Hall and three Boardwalk sites on Eighth Street, Ninth Street and between Fifth and Sixth streets. The Ninth Street parking lot near the Boardwalk is another site considered in the feasibility study for a garage. A garage at the downtown site behind City Hall would cost $14.7 million to develop and would lose $1.2 million annually, the study concluded. Development costs and annual operating losses for the Eighth Street site by the Boardwalk at Moorlyn Terrace would be $17.5 million and $618,750, respectively. At the Ninth Street location by the Boardwalk, the development cost would be $17.2 million and the annual operating loss would amount to $515,000. The Boardwalk location between Fifth and Sixth streets would cost $19.7 million to develop and would suffer an annual operating loss of $560,000. City spokesman Doug Bergen noted that the operating losses would occur during the years Ocean City was paying off the bonds to finance the garage, if the project was built. Mayor Jay Gillian’s administration will now look at other ways to improve parking throughout the city, including plans for an “Always a Spot” campaign this summer that will use technology such as sensors to alert motorists when there are open spots at the city’s surface lots, Bergen pointed out. “The city will always consider any sort of improvement that helps residents, businesses and visitors. But at this time and based on the cost, there are other priorities in our capital improvement program. The mayor emphasized that making such a big investment should always benefit as much of the community as possible,” Bergen said in an email. He noted that most of the city’s existing surface parking lots along the Boardwalk were purchased from private owners, so the town “would look for similar opportunities if they were cost-effective.” One of the other takeaways from the report is that the municipal parking lots were at full occupancy for only a few days during the summer. A public awareness campaign will help direct visitors to Ocean City’s many parking options, promote the city’s new jitney service and let motorists know about new technology, Bergen said. Councilman Jody Levchuk, at right, is not convinced that a parking garage would be too expensive to build. City Councilman Jody Levchuk, an advocate for building a parking garage, said he believes that more discussion is needed on the subject before any final decisions are made. He said it is premature to hang a “too expensive sign” on the project, despite the conclusions of the consulting study. “That does not mean that it’s off the table,” Levchuk said in an interview Sunday. “I’m not convinced at all that it’s too expensive.” Levchuk is the co-owner of the Jilly's shops on the Boardwalk and downtown. He said there is a significant need for a parking garage and that the public wants one, so ultimately “we’ll get there.” His preferred spot for a parking garage is the surface lot behind City Hall on Central Avenue between Eighth and Ninth streets. That location would serve City Hall, the Ocean City Police Department headquarters across the street and shoppers at the downtown stores along Asbury Avenue, he said. “My focus is on the center of town because I want it to benefit everyone,” Levchuk said. Levchuk also wants the city to consider the possibility of incorporating a parking garage in Mayor Gillian’s plan to renovate and modernize the police department building. The building is more than a century old and once served as a school before it was converted into the headquarters for the police department and municipal court. The timetable and cost of the renovation project have not yet been announced by the city. Paid for by Michael DeVlieger