Ocean City Eyeing Car Dealership Site Again -Resort seeking new appraisals; FIT petition drive shot down the old ones

Posted: Wednesday, May 15, 2019 7:18 am

OCEAN CITY – The city is getting new appraisals for the former Ocean City Chevrolet car dealership property between 16th and 17th Streets.

The property’s owners, Klause Enterprises LLC received preliminary site plan approval for 21 single-family homes.

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.

Last year, NorthStar Appraisal Co. 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 its findings to $9 million.

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

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

The city originally wanted to purchase the land for $9 million and spare the lot from residential development. Mayor Jay Gillian and City Council 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.

However, FIT said 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 The petition drive proved ultimately successful, and after the signatures were verified, the city repealed the property’s sale, ending the deal with Klause Enterprises.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 – recently proposed a 21-unit housing development for the car dealership.

Seven homes would be built facing Haven Avenue, while 14 homes would be built along Simpson Avenue, according to the plans. Each lot would 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 conditional use variance to subdivide the existing property, Avery Teitler, attorney for Klause Enterprises, told the media there was “always a possibility” the city could purchase the land.

In his May 10 message to the public, Gillian confirmed the city ordered new appraisals of the former car dealership lot.

“The owners of the property received preliminary approval last week to build 21 homes there, but nothing has been built yet,” Gillian said. “My position remains the same: I don’t want to see the property developed with more housing. I don’t know yet if the appraised values that come back will be enough to forestall development and allow us to acquire the valuable tract. But I promise that we will negotiate in good faith.”

FIT President David Hayes said he wasn’t surprised with the city ordering more appraisals and welcomes the city’s negotiations with the property’s owners.

“One of the problems last time was that the appraisals were very suspect, but if the appraisals are done correctly and they come up with a good price and it’s a good deal for taxpayers, we’ll support it,” Hayes said.

Hayes said FIT’s position has always been the property represents a “great opportunity for the city,” but the $9 million without really any negotiations before was “way too much.”

“We’re not looking to block everything the city is doing. We just want to get a good deal for the taxpayers,” Hayes said.

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