Tahiti Inn Sells to Ocean City Investor

Tahiti Inn Sells to Ocean City Investor

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Before the sale, the Tahiti Inn was owned by the Gallelli family since 1989. (Photos courtesy of Ocean City Real Estate Group)

By DONALD WITTKOWSKI and MADDY VITALE

Cecilia Gallelli-Keyes said she will treasure the friendships that her family developed with so many of their guests and employees at the Tahiti Inn in Ocean City.

The Gallelli family owned the Tahiti Inn since 1989, but now they have sold the motel to an investor who has been on a buying spree of late in Ocean City.

“We want to thank our customers and our fan base – all the loyalty and love for the past 33 years,” Gallelli-Keyes said in an interview Sunday. “We want to thank everyone for all they brought to us. It wasn’t just about business.”

Online real estate records show that the Tahiti Inn and related property have been sold for $10.5 million to First Knight Coastal LLC, a group headed by Ocean City investor Raj Khatiwala.

Khatiwala and his brother, Yogi, emerged as the winning bidders in U.S. Bankruptcy Court last week to buy the landmark Crown Bank building in downtown Ocean City. The $6.675 million deal for the six-story building at the corner of Eighth Street and Asbury Avenue and five adjacent parking lots is expected to be finalized in about a month.

Other Ocean City businesses owned by the Khatiwala brothers include The Scarborough Inn, The Beach House, The Pavilion, The Forum, Bluewater Inn Hotel and Ocean Breeze Hotel.

They also own Stainton’s A Gallery of Shops in the downtown and Stainton’s Gallery by the Sea on the Boardwalk.

Raj Khatiwala could not be reached for comment to discuss his plans for the Tahiti Inn, which includes 42 rooms and suites. The deal also includes a 15-unit apartment building that had been owned by the Gallelli family and three adjacent parcels used as two parking lots.

Altogether, the Tahiti Inn and apartments and related property total about one acre of prime real estate at 11th Street and Ocean Avenue, only about a block from the beach and Boardwalk. The entire site had originally been listed for sale at $13.5 million.

The Khatiwala brothers would have the option of redeveloping the site using land that sits in Ocean City’s Hospitality Zone, an area that allows hotels, motels, restaurants, mixed-use development and multifamily housing that includes duplexes, triplexes and quadruplexes, according to the real estate listing for the Tahiti Inn.

An aerial photo shows the Tahiti Inn and related property outlined in white.

Gallelli-Keyes expressed confidence that the Khatiwalas will continue the legacy of the Tahiti Inn started by her family in 1989.

“They are two brothers with really good heads on their shoulders. We felt confident in handing them our legacy. I’m sure they will do right by it,” she said.

Gallelli-Keyes owned the Tahiti Inn, the apartments and the three parcels with her mother, Triestina, and two brothers, Pasquale and Franco. Her father, Mario Gallelli, a well-known Ocean City businessman who died on Feb. 2, 2020, bought the motel.

It was always her parents’ dream to own a hotel or motel after they immigrated to the United States from Italy in 1962, Gallelli-Keyes said.

“There is a lot of history with my family. My dad and mom came from Italy with nothing on their back. They were immigrants,” she said.

Looking back on what she called “a wonderful 33 years,” Gallelli-Keyes said she will fondly remember the relationships her family was able to build with the Tahiti Inn’s guests and employees.

“They were like true family,” she said of the guests. “They would walk in with flowers and food and pastries and gifts and Christmas cards. Plenty of love. That is our main thing.”

She noted that many of the employees had worked at the motel for years. The Tahiti also hired local kids for summer work.

“The employees there were like our family,” Gallelli-Keys said.

The Gallelli family was also known for its philanthropy at the Tahiti Inn, including donating rooms for charitable causes and organizations such as the annual Walk for the Wounded fundraising event in Ocean City that benefits military men and women wounded in combat.

Some of the other fundraising events and charity organizations that were connected to the Tahiti included the Sunshine Foundation, the Harry Vanderslice Golf Outing and the Ocean City Education Foundation. The Ocean City Education Foundation student scholarships are named in memory of Mario Gallelli.

“Especially with the schools – anything with the schools we were always giving,” said Gallelli-Keyes, who is a longtime member of the Ocean City Board of Education.

An outdoor, heated pool is one of the amenities at the Tahiti Inn.