By Donald Wittkowski
Ocean City has given up on attempts to acquire a key piece of property that was once part of a broader plan to replace three former blighted gas station sites with landscaped parks along the main entryway into town.
Instead, the city will now allow the owner to “pursue whatever plans he has for the property,” Business Administrator Jim Mallon told City Council on Thursday night in the latest twist in the long-running saga over the land.
Paul Chiolo, the owner of Keller Williams, an Ocean City real estate firm, has proposed redeveloping the former Exxon gas station site into a new office complex for his company. He has resisted attempts by the city to seize the property through eminent domain.
The city went to court in an attempt to acquire the site, but decided to withdraw from the eminent domain case after failing to reach agreement with Chiolo on a purchase price during negotiations to settle the litigation, Mallon said.
“However, the defendant’s expectation of value so greatly exceeded the appraised value of the property that we were unable to reach an agreement. In light of what the city would have to pay in combined litigation and acquisition costs, the city voluntarily withdrew its condemnation complaint,” Mallon said during the Council meeting.
Mallon added, “The owner is now free to pursue whatever plans he has for the property.”
In an interview after the Council meeting, Mallon declined to disclose how much money the city offered for the land during settlement talks and how much Chiolo had sought. Last November, Council approved a $650,000 funding ordinance to buy the site.
“Conversation between the two parties didn’t work out,” Mallon said.
Chiolo could not be reached for comment Thursday night after the Council meeting.
For more than a year, Chiolo has been attempting to redevelop the former Exxon gas station site into a new office complex for Keller Williams. The proposed project at the corner of Ninth Street and Bay Avenue would be prominently located at the foot of the main gateway into Ocean City.
The city’s Planning Board originally rejected the Keller Williams project in January 2017, after expressing skepticism about the parking plans and the proposed traffic flow in and out of the office building.
Chiolo revised the project to address the board’s objections. The board followed up by giving its approval.
In touting the project, Chiolo has repeatedly said that the office building would be an attractive new commercial centerpiece for the Ninth Street entranceway.
As part of a broader beautification of the Ninth Street corridor, the city had proposed converting the Keller Williams property and two abandoned former gas station sites across the street into green space.
The city bought an old BP gas station site in 2016 for $475,000 and is in the midst of acquiring an old Getty station site next door. The deal to buy the former Getty property is “imminent,” city spokesman Doug Bergen said.
The purchase price for the Getty site has not yet been disclosed, although the city earlier made a $650,000 offer for the property.
With the former Exxon site no longer part of the landscaping plans for the Ninth Street corridor, the city will look elsewhere to acquire property for green space, Mallon said.
“We will continue to pursue the most cost-effective opportunities for using taxpayer dollars to acquire open space,” he said.
In other business Thursday, Council unanimously introduced a $78.8 million municipal budget for 2018 that would raise the local tax rate by a penny.
Under the plan, the owner of a home assessed at $500,000 would pay an extra $50 annually in local property taxes.
City officials said the budget will finance an ambitious capital plan to upgrade the town’s critical infrastructure needs – including drainage projects, road improvements and the dredging of the shallow back bays – after years of neglect.
“People want capital projects,” Councilman Bob Barr said. “At some point, you’ve got to pay for it.”
Barr stressed that he and other Council members would prefer to adopt a budget that has no tax increase. But he praised Mayor Jay Gillian for having the “fortitude” to propose a budget that includes funding to overhaul the city’s aging infrastructure.
“Of course, nobody wants to raise taxes,” Barr said. “We take that very seriously.”
The $78.8 million budget is lower than the $79.9 million spending plan originally unveiled by the mayor last month.
Frank Donato, the city’s chief financial officer, explained that the amount of grants the city has received so far this year is about $1.7 million lower than in 2017, so the 2018 budget figure was adjusted downward.
Donato, though, noted that the city will continue to seek even more grants through 2018, raising the prospect that there will be more grant revenue to fund the budget later on.
“It will go up throughout the year, definitely,” Donato said about the grants during an interview.
In the meantime, Council will take the next few weeks to scrutinize the budget for possible changes. A public hearing and final vote on the spending plan are scheduled for the April 26 Council meeting.
“We’re going to have some time to study this,” Councilman Tony Wilson said.