Blighted Ocean City condo complex may be redeveloped

Since the spring of 2024, the Seaspray Condominiums have been surrounded by a chain-link fence. Red tags have been slapped on the vacant condos declaring that the buildings are “unsafe for human occupancy.”

But now the first step has been taken to remove and redevelop the hulking condo complex that mars the busy 34th Street entryway into Ocean City.

City Council approved a resolution at a meeting Thursday night formally declaring the Seaspray property “in need of rehabilitation” to start the process for redevelopment. Council gave its approval after the city’s planning board had recommended the rehabilitation designation.

Underscoring the need to demolish the blighted property, Councilman Keith Hartzell descriptively called the Seaspray condos “the poster child” for rehabilitation and redevelopment.

“This is one of the grand entrances into our city, and the last thing we want to see is what’s there now,” Councilman Jody Levchuk said of Seaspray.

According to the Council resolution, the Seaspray’s “distressed condition does not reflect the prosperity and vibrance of the balance of the island.”

“The current condition of the property has a detrimental impact upon the surrounding businesses and residences, and upon the city as a whole,” the resolution says.

The HOW Group, a property management and real estate company based in Conshohocken, Pa., is under contract to buy the Seaspray site at the corner of Bay Avenue and 34th Street for an undisclosed price, city officials said.

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

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

HOW Group had 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, City Solicitor Dorothy McCrosson said.

Later, Council would have to approve a zoning ordinance to formalize a redevelopment agreement with the HOW Group. 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.

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 seems to fit in very well,” he said.

Winslow noted that the HOW Group has already agreed to make changes with the proposed project if the city wants to see that happen.

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.

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

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. Since then, the condos have been surrounded by a chain-link fence and include red tags placed on the buildings declaring Seaspray as “unsafe for human occupancy.”

The work needed to return the property to a safe condition is reportedly too expensive for the condominium association. Litigation among the Seaspray condo unit owners has resulted in the court appointing a receiver to sell the property, McCrosson said.

In other business at its meeting, Council formally ended negotiations for the city to possibly buy a downtown office building to serve as the new headquarters for the police department.

The city had been in discussions to buy the former Crown Bank building at 801 Asbury Ave. But after conducting extensive analysis of the century-old building’s renovation costs, city officials concluded it would be far too expensive to convert it into the police station.

“To make this a police station, the hurdles are unbelievable,” Mayor Jay Gillian told Council.

    The former Crown Bank building towers over the corner of Eighth Street and Asbury Avenue in downtown Ocean City.
  

Gillian explained that the city would have been required to make the building both flood-proof and earthquake-proof as the police station, something that would have added “millions and millions of dollars” to the cost.

While negotiations were still active, Council had introduced a bond ordinance on Sept. 25 approving $12.6 million to buy the building. However, Council allowed the bond ordinance to die on Thursday now that the sale is no longer being pursued.

City officials will now shift their attention to a new plan. Gillian said the city will instead construct a brand new public safety building to serve as the police department headquarters. The police department’s current headquarters, the antiquated public safety building at Eighth Street and Central Avenue, will be torn down.

“I believe this is going to be the best thing,” Gillian said of plans for a new building.

It has not been announced how much the new building is expected to cost and when it would be constructed. Money originally intended for the purchase of the former Crown Bank building will instead go toward the construction of a new police headquarters, Gillian indicated.

For a while, city officials had discussed the possibility of renovating and expanding the public safety building, a former school dating to the late 1800s.

Early estimates put the building’s renovation and expansion cost at about $30 million, but Gillian said the project would have likely been more expensive. Ultimately, the city decided against renovating the old building to concentrate on building a new police headquarters.

“What we’re going to do is, we’ll tear down the building and then we’ll build a new one,” Gillian said.

In a separate project, Ocean City is constructing a new $6.1 million police substation at Eighth Street and the Boardwalk. The substation will give the police department a bigger presence on the Boardwalk when the project is completed this winter.

    The city is dropping its plans to renovate the old public safety building at an estimated cost of $30 million.