Funding plan introduced to buy landmark building for police headquarters

Ocean City took the first step Thursday toward buying a landmark building in the downtown retail district for $12.6 million and converting it into a new headquarters for the police department.

But the proposed purchase of the former Crown Bank building at 801 Asbury Ave. is far from guaranteed. A number of challenges still loom, including whether the city should preserve the existing retail shops on the building’s ground level – even if the police department eventually takes over the remaining floors.

The city is still conducting due diligence to ensure that the 100-year-old building is structurally sound and would be suitable for renovations to transform it into the police headquarters.

To get the process started, City Council introduced a bond ordinance Thursday night that includes the funding to purchase the former Crown Bank building from the real estate investment firm that has owned it since 2023. The proposed deal would also include a parking lot next to the building that has nearly 50 spaces.

Council introduced the bond ordinance in a 6-0 vote. The next step calls for a public hearing and final vote on the ordinance at Council’s Oct. 9 meeting.

At the same time, the Council members are waiting for Mayor Jay Gillian’s administration to give them a due diligence report on the building’s structural integrity, renovation costs, maintenance and parking.

City Solicitor Dorothy McCrosson explained to Council that the hope is to complete the building’s purchase before legislative changes take effect with New Jersey’s Mansion Tax on Nov. 15 that would add an extra $400,000 to the deal.

Recent amendments to the Mansion Tax will increase the fees tacked on to the sale of high-value properties, such as the former Crown Bank building.

    City Council introduces the funding package to buy the former Crown Bank building and will take a final vote at its Oct. 9 meeting.
  

Plans to buy the former Crown Bank building represent the latest twist in a long-running saga to replace the city’s antiquated Public Safety Building, a former school dating to the late 1800s.

Until attention shifted recently to the former Crown Bank building, the city had been discussing plans to expand and modernize the Public Safety Building at an estimated cost of $30 million.

City officials now say the purchase of the former Crown Bank building represents a far more economically viable alternative that would save local taxpayers a significant amount of money.

“Right now, in my mind, this comes down to an economic decision,” Councilman Dave Winslow said while speaking in favor of the purchase.

Dave Breeden, president of the local watchdog group Fairness In Taxes, questioned why all of the critical information that will be included in the due diligence report wasn’t already made available by the Gillian administration to Council.

“Questions like structural integrity of a 100-year-old building, costs of renovations and rehabilitation, terms of sale, along with work schedules, should be addressed prior to moving forward,” Breeden told Council during the public comment portion of the meeting.

    Dave Breeden, president of Fairness In Taxes, questions whether the city is rushing ahead to buy the former Crown Bank building without having all of the financial information it needs.
  

Separate from its plans to buy the former Crown Bank building, the 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 fall.

With the former Crown Bank building emerging as a less expensive option to become the main police headquarters, the old Public Safety Building may not be around much longer.

Council President Terry Crowley Jr. said the short-term plan would be for the city to demolish the Public Safety Building to create more parking downtown. In the long run, the city might sell the property, he explained. 

The six-story former Crown Bank building is hardly young, either. The building dates to 1925 and is an iconic structure in the center of Ocean City’s downtown retail district. It consists of five floors and a mezzanine area.

Breeden took issue with the city’s about-face on modernizing the Public Safety Building in favor of acquiring the former Crown Bank building.

“The last time I talked to the police, it was full speed ahead on renovations to 835 Central,” Breeden said, referring to the address of the Public Safety Building.

“So what happened to drastically change the plans?” he continued. “I have been told that part of the rationale justifying the change is that there will be cost savings. But nobody has been able to quantify those cost savings. Again, basic financial and operational information should be made (public) prior to making this important business decision that will have consequences for years to come.”

    The city is reconsidering its plans to renovate the old Public Safety Building at an estimated cost of $30 million.
  

The police department currently leases two floors of the former Crown Bank building for its administrative operations. Another floor is leased for the city’s municipal court offices.

Police Chief William Campbell said the building has worked out well so far in housing the administrative operations for the police department.

“So far, so good,” Campbell said in an interview after Thursday’s Council meeting.

However, Campbell emphasized that the decision to buy the building – or not – ultimately rests with City Council.

The first floor of the building currently functions as a retail complex known as The Shoppes at Asbury, while the upper floors are office space. The building’s current owner, the real estate investment firm Eclat Investments, has its corporate office on the sixth floor.

Twin brothers Raj and Yogi Khatiwala, who head Eclat Investments, purchased the former Crown Bank building and the adjacent parking lots in 2023 for nearly $6.7 million to save the then-financially troubled property from a bankruptcy auction.

Last year, the city spent $3.3 million to buy two parking lots from the Khatiwala brothers that were part of the former Crown Bank building property. The city has been acquiring property on the block of Eighth Street and Central Avenue, just behind City Hall, to create more parking for the downtown.

During the Council meeting, some of the store owners in The Shoppes at Asbury expressed concerns that they would lose their businesses if the building becomes the new police headquarters.

One of them, Gloria Baker, said it would be impossible for her to find another affordable location on the Asbury Avenue shopping corridor because of high demand for retail space downtown.

“Being forced by the local government to close your business is quite shocking,” said Baker, who owns the Flirt Lingerie & Living and Flirt Jewelry Co. stores in The Shoppes at Asbury.

    Shop owner Gloria Baker fears she will have no place to relocate her businesses to if the police department takes over the retail space in the former Crown Bank building.
  

Councilmen Keith Hartzell, Sean Barnes and Tony Polcini, however, stressed their desire for the city to preserve the retail shops on the first floor, even if the rest of the building becomes the police headquarters.

Hartzell said the downtown shopping district is thriving, but there remains a shortage of retail space overall. He believes steps should be taken to preserve the stores on the bottom floor of The Shoppes at Asbury “at all costs.”

“Save the retail space on the bottom, because we’re short on it,” he said.

In an interview after the meeting, Baker said she was encouraged after listening to Hartzell and the other Council members express their support for the retail shops.

“There’s a little bit of hope,” she said.