Ocean City Discusses Plan to Save Church From Tax Sale

Ocean City Discusses Plan to Save Church From Tax Sale

The Tabernacle Baptist sign notes the church's long history in Ocean City.


Ocean City is working with the Tabernacle Baptist Church to solve a property tax debt that has created a financial crisis for the town’s oldest surviving church.

The historic church lost its tax-exempt status “through no fault of its own” when it came under private ownership in 2019 during a sale of the property to its former pastor, according to City Solicitor Dorothy McCrosson.

McCrosson told City Council during its meeting Thursday night that Mayor Jay Gillian’s administration is trying to craft a payment plan for the church to pay its overdue taxes and avoid a tax sale on the property scheduled in October.

The church owes a total of about $16,000 in back taxes for 2019 and 2020 as well as approximately $1,400 in interest, McCrosson said. The city was legally required to impose property taxes on the church after it had passed into private hands during former Pastor Charles Frazier’s temporary ownership.

“The city had no option but to assess those taxes,” McCrosson said.

Tabernacle Baptist’s board of trustees regained ownership of the property in December 2019 after it filed a lawsuit against Frazier, who has since died, challenging a deal that he had worked out with the church’s former leaders to sell him the building for $1 in March 2019.

In the meantime, the church, multiple city officials and civic groups are working on fundraising efforts to help pay off the taxes, which would avert the tax sale.

Councilman Keith Hartzell, right, seated next to Councilman Jody Levchuk, discusses fundraising efforts to pay off the church’s taxes.

Councilman Keith Hartzell said a GoFundMe campaign has been set up to raise money to pay the church’s 2019 taxes. He said about $9,000 has already been raised or pledged.

Hartzell expressed cautious optimism that the campaign will raise enough money to pay off the church’s entire tax debt of about $16,000 for both 2019 and 2020 by the time it is finished.

“Hopefully, we can get this (church) saved because it’s worth it,” he said.

McCrosson said the church’s attorney and the city are also discussing the possibility of having Tabernacle Baptist enter into an installment plan to pay the back taxes for 2019 and 2020 over a five-year period. The installment plan would be another way to forestall a tax sale.

The installment agreement could be presented to City Council for its approval as early as its next meeting on Aug. 24, McCrosson said.

However, if the church is able to pay its entire 2019 tax bill, plus the interest, an installment agreement will not be necessary to prevent a tax sale.

Even if the church were to go to a tax sale in October, that does not mean it is in imminent danger of foreclosure. McCrosson explained that the foreclosure process would take two years from start to finish, beginning with the tax sale.

City Solicitor Dorothy McCrosson says discussions are underway for the church to possibly enter into an installment agreement with the city to pay its taxes.

Separately, Tabernacle Baptist has filed a lawsuit claiming that it never lost its tax-exempt status and does not owe any property taxes, Shari Thompson, chairwoman of the church’s board of trustees, said in an interview in August.

Thompson appeared before City Council at its Aug. 27 meeting to ask for the governing body’s help. In public remarks, she recounted the church’s litigation against Frazier and the struggle for ownership.

McCrosson said there is a possibility the courts could rule that the church does not owe the taxes if it finds that the transfer of ownership to Frazier had been improper in some way.

In a related development, the church is expected to file an application by Nov. 1 to regain its tax-exempt status for 2021, McCrosson said.

Tabernacle Baptist, one of South Jersey’s most historic African-American churches, dates back to 1890 in Ocean City, making it the town’s oldest surviving church.

The church cornerstone displays the year 1908, which actually marks the date the building was physically moved from Central Avenue to the corner of Eighth Street and West Avenue and placed on its “new” foundation, now 112 years old. Its towering steeple, topped by a cross, overlooks Ocean City’s downtown district.

The historic Tabernacle Baptist Church occupies the corner of Eighth Street and West Avenue.

Once in deteriorated condition, the church underwent a $400,000 restoration from 1999 to 2003, Thompson said. The building sports a new coat of white paint, a complete interior renovation, a new HVAC system including central air, and other upgrades.

More improvements to the church are planned once the back taxes are paid off, Hartzell said. He noted that two local contractors have stepped forward to help refurbish the building.

“Once they get that off their back, they can start refurbishing the building,” Hartzell said of the tax debt.

In other business at Thursday’s meeting, Council introduced an ordinance that would lower the annual fee for permits allowing vehicles to drive on the beach.

The fee had been raised to $250, but after receiving complaints that the increase was excessive the city is now proposing to reduce the cost of the permits. The fee would be $150 starting on June 1, 2021, $175 on June 1, 2022, and $200 on June 1, 2023.

The ordinance is scheduled for a public hearing and final vote by Council at the Sept. 24 meeting.