Ocean City to buy two parking lots downtown for $3.3 million

Addressing a critical need in the downtown area, Ocean City will buy two centrally located parking lots next to City Hall in a $3.3 million deal.

Money to buy the adjacent parking lots on Central Avenue near Eighth Street will come from a $6.3 million bond ordinance introduced Thursday night by City Council in a 7-0 vote.

A public hearing and final vote by Council on the funding package are scheduled for Sept. 26.

The remaining $3 million in the bond ordinance will pay for upgrades to the Boardwalk, primarily at the northern end between St. Charles Place and Fifth Street.

Improvements will be made to the Boardwalk’s decking, foundation, stairs, ramps and railings, according to a summary of the project. The Boardwalk will not be widened.

Frank Donato, the city’s chief financial officer, told Council that the ramp to the Boardwalk at Moorlyn Terrace will also be redone.

The $3 million in city funding will supplement a nearly $5 million state grant awarded to Ocean City this year for even more improvements to the Boardwalk, Donato said.

State funding will be used to make repairs to the Boardwalk’s deteriorated substructure near Third Street, improve storm resiliency and add ADA-compliant ramps across the length of the Boardwalk, city officials said earlier this year.

    A series of improvements are planned for the Boardwalk.
  

Meanwhile, the two parking lots are being bought from the owners of the former Crown Bank Building at 801 Asbury Avenue, a block from City Hall.

Raj Khatiwala and his brother, Yogi, of Crown Holdings LLC, acquired the Crown Bank Building and three adjacent parking lots out of bankruptcy in 2023 for nearly $6.7 million.

Donato said the city will buy two of those lots closest to the existing municipal parking lot behind City Hall.

Combined, the two new parking lots have a total of 44 spaces. The municipal parking lot behind City Hall has 71 spaces.

Mayor Jay Gillian noted that the two new lots will provide much-needed parking for the downtown retail district as well as for the city’s police department during the renovation of its headquarters building on Central Avenue between Eighth and Ninth streets.

“This is a great opportunity to take care of our police department while the public safety building is under construction and provide public parking in the long term,” Gillian said.

The antiquated public safety building, a former school that dates to the late 1800s, will be modernized and expanded. The estimated $30 million project is expected to get underway in 2025 and be completed in 2026, according to a tentative timetable.

    Ocean City Chief Financial Officer Frank Donato discusses the terms of the parking deal with City Council.
  

Councilman Jody Levchuk, who has been an advocate for more parking in town, called the purchase of the two lots “great news.”

In similar comments, Councilman Keith Hartzell said it was “excellent news.”

Parking shortages in the downtown area prompted the city to conduct a study last year to determine the feasibility of building a parking garage.

A parking consultant looked at the possibility of the city developing and operating a multilevel garage at three potential locations near the Boardwalk and one in the downtown business district.

However, the consultant concluded that a garage would be a money loser – both too expensive to build and too costly to operate.

A garage at the downtown site behind City Hall would cost $14.7 million to develop and would lose $1.2 million annually.

Development costs and annual operating losses for a garage on Eighth Street by the Boardwalk at Moorlyn Terrace would be $17.5 million and $618,750, respectively.

A garage built at Ninth Street by the Boardwalk would cost $17.2 million to develop and would lose $515,000 in annual operating costs.

Another possible location for a parking garage, near the Boardwalk between Fifth and Sixth streets, would have resulted in a $19.7 million construction cost and annual operating losses of $560,000, the study concluded.

    Ocean City operates surface parking lots, but a garage would be too expensive to build and operate, a study found.