Blighted Ocean City condo complex may be redeveloped

One of Ocean City’s most notorious eyesores may be demolished and redeveloped into a new three-story condominium that would “accentuate” plans to revitalize the surrounding 34th Street entryway into town.

The Seaspray Condominiums at the corner of 34th Street and Bay Avenue have been vacant and surrounded by a chain-link fence for the past year after being deemed structurally deficient.  Red tags have been slapped on the condos declaring that the buildings are “unsafe for human occupancy.” 

Seaspray was shut down in 2024 by the city’s construction official after some concrete fell from the landing of an exterior stairway at the 32-unit condo complex.

But in a new twist in the Seaspray saga, City Council approved a resolution Thursday night that represents the first step in a process that could lead to the property being designated “in need of rehabilitation” and possibly redeveloped.

The HOW Group, a property management and real estate company based in Conshohocken, Pa., is under contract to buy the Seaspray site for an undisclosed price, city officials said.

The property hit the market in 2024 for $7 million and has being touted as a “prime real estate, investment opportunity.”

The Seaspray buildings date to the 1950s and were originally part of the Seaspray Motel before they were converted into condos in 1981.

    City Solicitor Dorothy McCrosson, seated next to Mayor Jay Gillian, explains the Seaspray's redevelopment plan to City Council.
  

The condos were first shut down in April 2023. At that time, the state Department of Community Affairs ordered the city to close down the Seaspray complex after it was declared structurally unsafe.

Then the condos reopened in May 2023 after an updated engineering report concluded they were safe. Concerns about the Seaspray’s structural integrity surfaced again in 2024.

Seaspray was shut down on April 17, 2024, by the city’s construction official after some concrete fell from the landing of an exterior stairway on the north side of the condos. The work needed to return the property to a safe condition is reportedly too expensive.

Litigation among the Seaspray condo unit owners has resulted in the court appointing a receiver to sell the property. The HOW Group is under contract to buy the property and is exploring options for its future development, City Solicitor Dorothy McCrosson told the Council members.

HOW Group has asked the city to designate the site in need of rehabilitation to open the door for a redevelopment plan that would include construction of a three-story building containing 43 condo units and a ground level of parking, McCrosson said.

“This designation would permit the developer to negotiate new zoning standards for its proposed project at the property,” she said.

Fourth Ward Councilman Dave Winslow, who represents the area of the city that includes the Seaspray site, said he was impressed by the HOW Group’s plans for the property.

“It looks like a nice concept,” Winslow said in an interview.

    Red tags placed on the Seaspray buildings declare that the property is “unsafe for human occupancy.”
  

Winslow has been overseeing the proposed revitalization of the 34th Street corridor in the south end of town to make it a more attractive gateway. He said he believes the redevelopment plan for the Seaspray property would “accentuate” the 34th Street gateway’s makeover.

Winslow noted that he is eager to see the blighted Seaspray removed.

“I drive by every day and cringe. It’s the first building they see. It looks terrible,” he said of the Seaspray’s impression on motorists entering town on 34th Street.

Winslow would hold a public meeting with the community at some point to discuss the developer’s plans, if they advance.

“We’re really only at the beginning,” Winslow cautioned.

Following McCrosson’s lengthy explanation of the implications of the “in need of rehabilitation” designation, Council voted 7-0 to approve a resolution to start the process that may ultimately result in Seaspray’s redevelopment.

“Adoption of the resolution on tonight’s agenda would be the first step in a process which could lead to a redevelopment plan and agreement changing the zoning standards for the property, but we’re only at the first step of the process,” McCrosson said.

Next, a draft copy of the Council resolution will be referred to the city’s planning board. The planning board, in turn, will have 45 days to make a recommendation to Council on whether the Seaspray property should be designated in need of rehabilitation.

 Council would then consider the recommendation of the planning board and could vote on another resolution to formally designate the Seaspray site in need of rehabilitation, McCrosson explained.

Later, Council would have to approve a zoning ordinance to formalize a redevelopment agreement with the developer. Such an agreement would follow the same path as any other zoning ordinance, meaning it would be reviewed by the planning board and would come before Council for introduction, a public hearing and then a final vote, McCrosson said.

    City Council approves a resolution that represents the first step in possibly declaring the Seaspray site "in need of rehabilitation."
  

Jim Kelly, a leader of the community group Ocean City 2050, urged Council not to use the Seaspray’s proposed redevelopment as “a precedent or mandate” to approve the controversial plans for a $150 million luxury resort hotel on the Boardwalk in place of the former Wonderland Pier amusement park.

Developer Eustace Mita, who owns the former Wonderland property, wants Council to declare the site “in need of redevelopment” in hopes of fast-tracking the approvals for resort hotel.

Mita wants Council to allow him to build the hotel in a section of the Boardwalk currently zoned for amusements, retail shops and restaurants. He is expected to appear at Council’s Aug. 21 meeting to seek the governing body’s approval to designate the property in need of redevelopment.

Kelly’s organization, Ocean City 2050, is part of a coalition of community groups that oppose Mita’s proposed hotel. Opponents believe it would be too big, would overwhelm the surrounding neighborhoods and would harm the city’s family-friendly image.

Kelly warned Council during the public portion of Thursday’s meeting that hotel opponents would not accept the city using the same or similar process for redeveloping the Seaspray property to pave the way for Mita’s proposed project at the former Wonderland site.

“As Council members, you should understand that many residents will vehemently oppose you using tonight’s resolution on the Seaspray Condominium as either a precedent or mandate to do the same for the former Wonderland Pier,” he said.