The Ocean City Planning Board on Wednesday dismissed the idea of allowing a six-story condominium complex to be built on a parking lot next to the historic Flanders Hotel at 11th Street and Ocean Avenue.
In a 1-to-5 vote with two abstentions, the board decided not to recommend to City Council changes to a redevelopment plan that would allow the project to proceed.
A redevelopment plan approved in 2005 calls for a hotel and spa at the same location. But owners of the lot say construction of a new hotel is not financially feasible. They sought an amended plan that would allow residential use in a six-story building housing 92 condominium units.
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The Planning Board vote essentially kills the proposal in its current form. City Council will not likely consider amending the redevelopment plan without the board’s recommendation.
Ocean City continues to thrive as a market for vacation homes. The vote marks a willingness of the board to wait out market conditions to achieve its objectives — in this case more hotel rooms for “transient” visitors interested in short stays in Ocean City.
THE VOTE
Planning Board members Mike Dattilo, Gary Jessel, Antwan McClellan, Ken Jones and John Loeper voted against the amended plan. Dean Adams voted in favor. Newly sworn-in members Pat McCaffrey and Matthew Vanderschuere abstained because they knew too little about the history of the proposal, they said.
Dattilo said that while the applicants made a compelling presentation, they failed to address the goal of the redevelopment plan: more hotel rooms.
Dattilo said “Ocean City, as a community, decided that it didn’t want a lot of height and bulk along the boardwalk,” and that the public was resigned to allowing a tall new building there only in exchange for a new hotel.
Jessel spoke of the “tourism cycle” preached to him by former Councilman Andy Jernee. He said the cycle starts with a short-term stay, then moves to a weekly rental, purchase of a vacation property, and ultimately to establishment of a primary residence.
“We need and want that short-term occupancy to occur,” he said.
“There is that cycle,” Loeper said, noting that Ocean City has “maybe 1,000 overnight rooms.”
“That’s the cycle of Ocean City,” he said. “That’s how people come here.”
“You just can’t pull in and stay for two nights,” said Jones, who said the city needs both transient lodging and a commercial parking lot.
McClellan also addressed parking and suggested the applicants’ estimation that a parking deck in the proposed condominium complex could accommodate 60 to 70 public spaces would not be sufficient to satisfy the demands of the hundreds of cars searching for spaces on any night in-season or during big off-season events.
Adams voted yes, saying the current plan is outdated and the proposed building is a “beautiful piece of architecture.”
He said Ocean City “certainly doesn’t need a closed-up building like the Revel (in Atlantic City).”
Adams also said the testimony of Jesse Briglia was convincing.
THE PUBLIC
Briglia, the owner/broker of Jesse Real Estate, said he owns 12 properties on Ocean Avenue and five boardwalk stores in front of the Flanders — all “in the sweet spot of this project.”
“I can’t think of any reason why the panel would not let this project go forward,” Briglia said.
He said Realtors are “starving for new, fresh inventory in center city” — not the dated one-bedroom units that prevail.
“I have the ability to sell these and rent them,” Briglia said of the proposed new four-bedroom units. “We should embrace this project.”
Stanley Wirpsza, a resident of the 1200 block of Ocean Avenue and an architect and planner, said he had a different view.
“Over-density does not help this city,” Wirpsza said. “The reason people come to this city is being reduced,” he said of any potential decrease in open space.
Several other people spoke for and against the proposal.
THE PITCH
Nicholas Talvacchia, an Atlantic City attorney representing Select Properties, told the board that the property has been unsuccessfully marketed for years as a hotel site — a use first approved in a June 2005 redevelopment plan.
The property includes a deed restriction that requires the owner to maintain 152 parking spaces for the Flanders Hotel. The requirement forces construction of a parking deck, if a developer hopes to use any substantial portion of the property for a building.
“After extensive market testing and analysis, a hotel cannot be financed and cannot make money,” he said.
He said owners envision 92 units individually owned as second homes or investment properties. The complex would include a lobby area, a deli/restaurant and a pool. He suggested that individual owners could rent the units by the week.
He said the project would bring an economic boost to the city in the summer, and owners visiting their properties in the off-season would provide an additional benefit.
“There’s market demand here,” he said. “The second home market here is one of the strongest in the nation.”
Clayton Heckler, president of Select Properties of Colmar, Pa., said he purchased the property as an investment more than three years ago.
He said he then looked at all options, including a hotel and retail, ultimately deciding that residential property would be the only one that would sell.
Russell Trier bought the Ocean City property, used as a parking lot for the Flanders and public, in 2003 and with partner Joe Ernst won approvals for the Soleil Hotel & Spa in 2009. But the investors never found the financing to complete the project.
The property has remained as a parking lot ever since.
The last hotels to be built in Ocean City were the Biscayne and Watson’s Regency in 1990.
Anthony Graziano, executive director of Integra Realty Resources, said he completed a full analysis of the project’s viability as a hotel, and said it would never make a return on any lender’s investment.
He called the Flanders deed restriction for maintaining the 152 parking spaces “the big elephant in the room” that makes the project cost-prohibitive. He also said any new hotel would never see a convention trade without a liquor license.
THE PROJECT
Architect Bruce Englebaugh showed the board plans for a six-story complex that includes a four-deck parking garage, a deli/restaurant, a rental/sales office, a lobby and a rooftop pool.
The four-bedroom units would cover 1,570 square feet and four three-bedroom units would be 1,175 square feet.
On the Boardwalk skyline, he said The Soleil (at 74.2 feet tall) would step down from the Flanders (at 117 feet) to the Surf Mall to the south. Cupolas would extend above the ridge line of 74.2 feet.
An L-shaped six-story building along Ocean Avenue and 11th Street would shield a four-story parking garage with a rooftop pool. A narrow area of open space would separate the main building from the parking deck (which would include four residential units).
The property covers 1.98 acres. The proposed parking deck would include 388 spaces, including the 152 designated for the Flanders. The existing surface lot at 11th and Ocean includes 220 spaces.
