By David Nahan of Ocean City Sentinel: Earlier this month, Ocean City Council voted unanimously to spend $9 million to buy a 1.856-acre lot in the center of town, but citizens group Fairness In Taxes (FIT) has started a petition drive to put that purchase on hold.
Two FIT members who are part of the petition drive said on Tuesday that they support the city buying the property, but believe the price is too high.
The petition drive is to initiate a public referendum on the bond ordinance, according to FIT board members David Hayes and David Breeden.
Breeden said FIT believes if they get about 400 signatures on a properly done petition that is accepted by the city clerk, it will stop the purchase in its tracks. The signatures represent 10 percent of the number of residents who voted in the last election.
On Sept. 13, council voted 7-0 to approve, on second reading, a bond ordinance for $8.5 million to complete a $9 million purchase of the property between 16th Street and 17th Street and between Simpson and Haven Avenues. It was formerly home to the Perry-Egan Chevrolet dealership.
Before council took that vote, former FIT president Michael Hinchman opposed the purchase, saying the two appraisals the city requested for the property were done incorrectly and came in too high because they use comparable sales that weren’t comparable. He said the appraisals overestimated the value of the property that is owned by the Klause family. He added there were other problems that added to overpricing the appraisal and he said city solicitor Dorothy McCrosson made two different appraisal requests – one that led to a higher appraisal, matching the number the family has sought for the parcel.
At the Sept. 13 city council meeting, Councilman Keith Hartzell said, “What this comes down to is whether this is a good value. I can tell you I wholeheartedly 100 percent believe that the Klauses have given us the price of $9 million. That’s the price and they’re not backing off.” He added there’s “compelling evidence’ that the property is worth $9 million.
Hayes and Breeden don’t believe the price is right, which is why Fairness In Taxes has initiated the petition drive.
“The state allows us to petition the government when they pass a bond ordinance,” Breeden said. “If we get sufficient signatures, that will force that particular ordinance to go to public referendum and let the public decide whether $9 million is appropriate for the property.”
He added just getting an approved petition would stop the sale.
“If the petition is accepted by the city clerk and everything is proper, everything stops,” Breeden said.
“I don’t know where they arrived at this $9 million number,” Hayes said, adding FIT was using the Open Public Records Act to get more information.
“It’s just way too much for this property,” Hayes said. “We need about 400 signatures … and we’ve got a good number right now. It’s the public’s right to do these petitions for a referendum. We had one (petition drive) in the past that was successful and we never went to the referendum so we got what we wanted by getting the city councilmen to change their votes.” He said that was about stopping a redevelopment project on the property next to the Flanders Hotel.
“People don’t want to pay $3 million more than they have to,” Hayes said. “Everyone likes parks and all that, but we shouldn’t be paying more for the property. This money could go for a lot of different things. And we’d be taking a double hit tax-wise if this does go to green space because now we won’t have the (tax) revenue from the property.
“It’s a good opportunity for the city,” he added, “but not at $9 million.”
Breeden said Hinchman “raised a lot of good points that remain unanswered” and that when McCrosson made her presentation at the Sept. 13 council meeting, the city was essentially giving the property owners the price they wanted.
“There was no attempt to negotiate,” Breeden said. He noted the city also approved an ordinance Sept. 13 to purchase three smaller adjacent lots, but if they couldn’t come to a price that is acceptable, they would consider going to court.
At the Sept. 13 meeting, McCrosson said John Flood, owner of two of the adjacent parcels, “ indicated he does want to sell to the city. We do want to buy from him. We don’t know if we’ll come to an agreement on price. If we are unable to do so the next step would be to go to condemnation and allow the court at determine the fair and just compensation for the property and Mr. Flood is agreeable to the process.”
“If the city felt $9 million was too much, why didn’t it go through the process … of going to court to pay a fair market price for it?” Breeden asked. “The city never explored that option.
“Why wasn’t the process the city is using to get the three remaining properties not used to get the Klause property?” Breeden asked.
Breeden said FIT is confident it can get the required signatures by the deadline, which is 20 days after the legal notice about the bond ordinance was published Sept. 19.
“I fully agree with the acquisition of the property and all of the land,” he said. “It’s an extraordinary opportunity.” However, he believes all the purchases should be at the right price.
“I agree with what the mayor is doing improving the infrastructure of the town, enhancing the performing arts at the Music Pier, realizing tourism is a very competitive industry,” Breeden said. “He has taken steps to take Ocean City to the next level, but there are processes, there are procedures you have to follow. And that’s where I sometimes disagree with him.”
Editor’s note: Included in this story are excerpts from the Sept. 19 Ocean City Sentinel story by staff writer Eric Avedissian about the council meeting and vote on the bond ordinance