Klause Property Purchase Part 2 Starting Up with new Ordinances to Condemn or Purchase

Hi All,

I was interviewed by Michelle Brunetti of the Press of Atlantic City, who then wrote this article about the Council meeting Thursday. Note her comment about the tax assessment for the property: “The Klause properties together are assessed at $3.58 million, and the Palmer property at $980,000, for a combined assessment of $4.56 million, city tax records show.” Just slightly more than the $9 million the City was willing to pay last Fall for the property! And shouldn’t the public have the right to weight in on what the property will be used for?

– Dave Hayes, FIT President

OCEAN CITY — City Council is again pursuing the purchase of a block of land near the Ocean City Community Center, much of which is owned by former used car lot owner Harry Klause and his brother Jerry.

On Thursday night, council voted to introduce an ordinance to authorize the acquisition by purchase or condemnation of the entire block between 16th and 17th streets and Haven and Simpson avenues.

Council tried to purchase much of the property last year for $9 million, but a citizens’ group successfully petitioned for a referendum on the sale, and the seller ended the deal.

There was no discussion of possible purchase price or use of the land at Thursday’s meeting.

Jerry Klause deferred comment to his attorney.

After the meeting, city Business Administrator George Savastano said council has not decided whether it will use the property for open space, recreation or school use. But he said it is no longer seeking to use it as the site of a new public safety building, as was discussed last year.

“My position has not wavered since we attempted to purchase the property at this time last year,” said Mayor Jay Gillian in a letter to the community Friday. “I don’t want to see this property developed with more housing.”

He said he welcomes public input on how to best use the block.

Fairness in Taxes President David Hayes said at the Thursday meeting his group would like the city to explain how the land will be used before it moves ahead with the purchase.

Last September, council voted to bond to buy the Klause Enterprises portion of the block for $9 million but repealed the bond ordinance after Fairness in Taxes successfully petitioned to force a referendum vote on the purchase. They objected to the price, saying the property was not properly appraised.

City officials said then that the Klause brothers had approached the city demanding $9 million and refusing to negotiate further.

The Klause brothers then allowed the sales agreement with the city to expire and said they would pursue developing homes there.

But no movement toward residential development has happened in the past year, and the old car dealership building remains. In February, Klause Enterprises purchased a tiny lot from Palmer Center LLC for $350,000 that was assessed at $210,400.

The city already owns a small lot on the block but is seeking to acquire an additional two acres composed of five lots held by Klause Enterprises, and a lot of .7 acres held by Palmer Center LLC. The Klause properties together are assessed at $3.58 million, and the Palmer property at $980,000, for a combined assessment of $4.56 million, city tax records show.

“This is to authorize acquisition by negotiation or condemnation of the entire car dealership lot,” said City Solicitor Dorothy McCrosson. “You’ve done this before but because you repealed the bond ordinance, we’re bringing this back so the public is aware we are going to be in negotiations for the entire lot. This will be first step in that process.”

There will be a public hearing on the ordinance at 7 p.m. on Aug. 22.

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