From David Nahan Ocean City Sentinel.
Posted: Wednesday, September 19, 2018
When we write stories that demand a response from an on-the-record government source, we need that response for our readers. It helps us balance out a story and present as complete and accurate a picture as possible for those directly and indirectly affected.
We tried that last week when citizen and former Fairness In Taxes president Michael Hinchman assailed the city for getting what he believes were faulty and overvalued appraisals for the 1.856-acre Klause family property that used to be home to Perry-Egan Chevrolet. He said one request laid out the anticipated value the appraiser should reach and that the two appraisals were far enough apart in value to trigger the need for a third appraisal.
Because Hinchman put the burden on City Solicitor Dorothy McCrosson, who solicited the appraisals, we reached out to her to get the city’s response – what was the rationale behind the different information in the appraisal requests and was a third appraisal necessary?
She did not respond.
When we didn’t hear from McCrosson, we followed up with a call to the city’s public information officer, through whom we have to funnel almost all of our requests to talk to city personnel.
For those who don’t know, the newspaper cannot call up the police chief to talk about a crime or the fire chief to talk about a fire or the public works chief to talk about street projects, etc., unless we go through the city’s gatekeeper first. It’s not that we can’t call, but most city personnel won’t comment. They refer us back to the public information officer to see if they have permission to speak or if the spokesman will do the talking for them.
That is satisfactory if we get the information we need. Sometimes it shortchanges our readers.
In this case, it wasn’t satisfactory.
Public information didn’t call us back either.
We wrote a story and editorial based on what we knew. Our view boiled down to believing council should delay a vote until it knew whether the valuations were accurate.
We didn’t learn anything more until we had a reporter at the meeting covering City Council … when council members voted unanimously to approve bonding $8.5 million more for the $9 million property purchase. It turned out the appraisals weren’t far enough apart to require a third appraisal, but council did opt to spend the higher appraised amount. (The low appraisal was for $8.2 million; the higher for $9.3 million before it was dropped to $9 million because of a miscalculation.)
As we noted in this space before, we support buying the property, whether it is used as a home for a new police station or a park or some other public good, because it is rare this kind of real estate opportunity comes up on an overbuilt island. However, we believe it should be at the right value for taxpayers who foot the bill.
We learned during City Council last week that the owners of the property weren’t going to budge from a $9 million asking price.
If we knew then what we know now, we still would have written the story about the appraisals, but the angle would have expanded.
The story would have raised Hinchman’s questions about the appraisals, but also would have questioned whether the process puts the city at a disadvantage compared to a private purchaser. Does the city get held hostage for a higher price? That is likely given the fact the seller knows the city wants the property and wants to avoid a private developer building more housing there.
The process makes it look like a huckster seeing a rube coming from a mile away.
At last week’s council meeting, Hinchman was outraged that council didn’t delay the vote and called the process “a fraud in the most naked sense of how you value property. This is a fraud on the City of Ocean City and its taxpayers.”
He later suggested that McCrosson and all City Council members reveal whether they have ever bought a car from Harry Klause, an owner of the property, because that would make voting on the purchase a conflict of interest. We don’t agree; we have never seen an allegation that Klause was giving special deals to public officials in return for a quid pro quo years down the road.
(In an unrelated note, Klause, who was the operator and manager of Harry Klause Cars and Trucks Inc. on Asbury Ave., pleaded guilty in 2013 to wire fraud because of the way he improperly handled transactions. Four years earlier, the FBI raided his dealership. Klause got three years of probation and a small fine.)
We think Hinchman, as a property investor, may be right that the property is overvalued and the city may be overpaying. Hinchman is threatening to take what he knows to the FBI and state Department of Community Affairs, but we don’t believe the G-Men will jump on this case.
If the city is getting taken for a premium price, it is because the seller can take the city for a premium price and city council members are willing to be taken. Voters can question their judgment at the polls.
Next up, we will see how much the city is willing to pay for a smaller adjacent parcels owned by a Klause cousin who ran for mayor last spring. We bet council won’t get them on the cheap.
David Nahan is editor and publisher of the Ocean City Sentinel and its sister newspapers the Upper Township Sentinel, The Sentinel of Somers Point, Linwood and Northfield and the Cape May Star and Wave.