Klause and Palmer Property Update

Quick update on Klause and Palmer Development property condemnation process.

The city has deposited with the court the required funds for the acquisition of the properties through the condemnation process.

  • For Klause property, city deposited a total of $6,900,000.
  • For Palmer Development property, city deposited $5,600,000.

Both property owners have petitioned the court for withdrawal of the funds in accordance with state law.

Back in August, 2020, I prepared a lengthy letter to the Mayor regarding environmental cleanup cost of the Klause property in order to make sure that the city escrowed an appropriate amount of funding to cover site remediation cost.

At the city council meeting of August 13, 2020, Dottie McCrosson publicly addressed the concerns I expressed in that letter and stated the city would perform needed environmental testing to determine the proper amount to hold in escrow.

My concern was based on the fact that when the city was going to acquire the Klause property for $9.0 million, the city’s environmental consultant stated that cleanup cost would be between $25,000 and $200,000 and that additional testing would be needed to determine exact cost. That was September 2018.

Now, as the property owners request withdrawal of the funds, the city must determine the required amounts to be held in escrow for environmental cleanup.

For the Palmer Development property, the city is requesting that a whopping $1.6 million (exact amount of $1,582,480) be held in escrow for environmental cleanup cost.For the Klause property, the city is requesting that ZERO DOLLARS be held in escrow for environmental cleanup cost.

Despite having time, literally years, the city has not even complete the environmental testing of the Klause property, as of the date of this email.

It defies logic that one property owner is required to keep $1.6 million in escrow for cleanup cost and the immediate adjacent property owner needs ZERO DOLLARS for cleanup cost; even with a previous report recognizing a cost range needed to properly clean the property.

Thanks – Dave
David Breeden, President Ocean City Fairness in Taxes

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