Council negotiating for car lot Petition killed it before; this time transparency seems to make ‘reasonable’ sale more likely

OCEAN CITY – Council is negotiating to purchase the Ocean City Chevrolet car dealership property that is slated for development. 

At their July 11 meeting, council entered a closed session to discuss the property. 

Ocean City Public Information Officer Doug Bergen said the city agreed to consider a possible sale of the car lot with the property owners, but no formal negotiations have started. 

Bergen said the city is interested in purchasing the property.

“Definitely one of the main purposes (for buying the lot) is to prevent it from dense residential development,” Bergen said. 

The property’s owners, Klause Enterprises LLC, entered an agreement last year to sell the property to the city for $9 million.  

The tract consists of five separate lots totaling 85,688 square feet, or 1.9 acres: 1601-1643 Simpson Ave., 1620, 1628-38, 1640 and 1644-46 Haven Ave.

NorthStar Appraisal Company of Linwood appraised the car dealership property at $8.2 million, while Integra Realty Resources of Toms River originally deemed the market value at $9.3 million, before recognizing a calculation error and amending their findings to $9 million.

The appraisals estimated coastal cottages would be built on the property. Coastal cottages are a type of development where two units could be built on a single-family lot. Council adopted the coastal cottage ordinance in 2013 and revoked them in March 2016. 

The city proposed several possibilities for the former car dealership, including constructing a new public safety headquarters, or using the area for parking or recreation. Council approved a capital plan budgeting $17.5 million for the new public safety building for 2020. 

Fairness in Taxes (FIT), a taxpayer watchdog group, challenged the accuracy of the appraisals, noting the comparables made were beachfront properties which have greater values than centrally located lots on the island. 

FIT cited the $9 million sales price was too high, and started a petition drive last October to halt the sale and put the property sale to a public vote. The petition drive proved ultimately successful, and after the signatures were verified, the city repealed the property’s sale, ending the deal with Klause Enterprises. 

Klause Enterprises – brothers Harry and Jerry Klause – proposed a 21-unit housing development for the car dealership. 

Seven homes will be built facing Haven Avenue, while 14 homes will be built along Simpson Avenue, according to the plans. Each lot will have landscaping, a driveway, and access to a rear alley bisecting the lot. 

After the Planning Board granted preliminary major subdivision approval, preliminary major site plan approval, and a conditional use variance to subdivide the existing property, Avery Teitler, attorney for Klause Enterprises, told the press there was “always a possibility” the city could purchase the land. 

In May, Mayor Jay Gillian announced that the city is getting new appraisals for the property, opening up the possibility of a sale.

At council’s July 11 meeting, FIT President David Hayes called the lot purchase “a great opportunity.” 

“It’s a unique property. Whether it’s going to be open space or whatever the use is going to be, we completely support the purchase of these properties, especially all three properties at this location,” Hayes said. 

Hayes said there are lessons learned from last year’s successful petition drive. 

“The public is expecting transparency and to the administration’s credit I see a lot of transparency,” Hayes said, adding that Gillian assured the public that the administration would be negotiating in “good faith” with the owners. 

David Breedin, FIT vice president, said he was pleased to see the city is negotiating with the property owners for the former car lot property

 “It is a unique opportunity every chance to acquire land in the city that is densely constructed,” Breedin said. “As an organization our chief concern was the price and a plan. Hopefully a reasonable price will be offered and a plan will be proposed. It’s very hard to ask the taxpayers for millions of dollars when you don’t have a plan. Hopefully both of those items will be addressed if the government starts to proceed with the acquisition of the properties.”