OCEAN CITY – “The relationship with the mayor is killing me.”
That’s Eustace Mita on how partnering with Mayor Jay Gillian to save the Wonderland Pier amusement park is not doing him any favors with development in the resort.
According to him, it’s the opposite.
“Not only hasn’t the relationship with the mayor helped me, it has hurt me terribly as a developer. I would have been better off having zero relationship with him and then you don’t have the rumors. Where I am in my life, I just want to beautify my city. We’re also in Stone Harbor, Avalon and Cape May,” Mita said about his luxury hotel properties through his business, Icona Resorts. “And in Ocean City, I’m like, ‘Why not us?’”
For his part, in a letter to the community dated Feb. 28, Gillian said he is not helping Mita on his plan.
“Dear Friends,” Gillian wrote, “After consideration of the Icona presentation to City Council at their February 23 public meeting, I spoke to Eustace Mita to express my concerns.
“I told Mr. Mita that while I understand the need for hotel rooms in Ocean City, I cannot and will not support his proposal to the council.”
Mita has proposed building a $160 million, 400,000-square-foot, 325-room luxury hotel on city-owned beachfront property on the open land between the boardwalk and parking lot between Fifth and Sixth streets. He, his attorney and one of his architects made a lengthy proposal before Ocean City Council Thursday evening on how they believe the city would benefit in multiple ways from selling the parcel of land that now has sand dunes and beach volleyball courts. The benefits, they said, include building a landmark hotel that would stand the test of time, bringing more hotel rooms to the resort to support the “lifeblood” of tourism and becoming the biggest taxpayer on the island on what is now tax-exempt municipal property. (See related story, page A1.)
In an interview with the Sentinel Monday afternoon, Mita said he also wanted to make it clear that his hotel project would add 400 parking spaces and the hotel would not sell alcohol, two big issues critics immediately raised.
Mita explained that buying the property at Wonderland, at Sixth and the boardwalk, after banks called in $8 million in loans on the Gillian family business, has made it more difficult to do business in Ocean City.
He cited the former Crown Bank building, which was in bankruptcy, as a prime example. He wanted to purchase it and turn it into a boutique hotel.
In August 2022 the city expressed a serious interest in purchasing the seven-story building because of its central location at the corner of Eighth Street and Asbury Avenue, and because it has five parking lots in back facing Central Avenue across the street from the aging and outdated police station and municipal court building, which the city has to replace. The city was serious enough that council approved contracts for professionals to inspect the building in the early fall. After Mita bid $6.5 million, the city’s position was that it would wait until after the bankruptcy proceedings finished to decide what action it would take, but Mayor Gillian said at a later council meeting the price was getting higher than the city expected and they would look at other options for the police station, which now looks like it will be rebuilt at its current location.
Local brothers Raj and Yogi Khatiwala, who through Eclat Investments of Atlantic City have a portfolio of multiple Ocean City properties including The Tahiti Inn, The Forum, Scarborough Inn, The Pavilion, The Beach House and Stainton’s A Gallery of Shops, put in a bid of $6.675 million and Mita declined to bid higher. (The brothers eventually closed on the building in early 2023.)
Mita said it wasn’t the bidding that made him walk away.
“I pulled out for one reason. I kept getting the calls and would hear or read about, ‘Oh, because of the mayor he’s going to get favoritism. He’s going to flip the building,’ which I had zero plans on doing,” Mita said. “I’m a hometown guy and I like to buy buildings and beautify them, like we did with the (building) on 34th Street.” Critics claimed because of his partnership with the mayor, Mita would buy the Crown Bank and sell it back to the city at a higher price.
“At any rate … the relationship with the mayor doesn’t help me. It absolutely crushes me, and the Crown Bank is evidence of that. That’s the only reason I pulled out of that,” he said.
“The sad part is, it hurt the city. Business people from Asbury called me saying reviving the building with a beautiful hotel would help that retail strip on Asbury Avenue,” Mita said. He planned a renovation.
“The plans we had were beautiful. It’s a slab side building,” he said of Crown Bank. “We had beautiful navy blue awnings, it was going to be a white building and magnificent windows … and a beautiful first floor with a 30-foot ceiling was going to be the lobby.” He wanted to turn it from looking like an office building to making it “seashore-y.”
Now he feels like rumors and speculation about his relationship with the mayor is going to hurt his hotel proposal, which also would require changes in zoning and environmental permitting because of its location.
“I fear the same thing is going to happen here,” Mita said. “The real shame is there’s nobody behind me … that’s going to build a hotel and invest this kind of money in a non-alcoholic related way. And the big guys, the Hiltons, Hyatts, Marriotts, they can’t do it because they’re not seasonal hotel people so they won’t. They can’t and they won’t.”
Former city councilman and mayoral candidate Keith Hartzell has claimed building a hotel over 100 rooms would give Mita a path to get a liquor license in this dry resort. (See related story.) Mita flatly denied that.
“Keith (Hartzell) talks about alcohol. He’s a nice fellow and I have no problem with Keith but the fact of the matter it is against our local laws here in Ocean City so it doesn’t matter how many rooms you have, the local law trumps what the state law is, meaning there’s going to be no alcohol,” Mita said. “Listen, I live here, I don’t want alcohol so there is zero plans to have alcohol. I have no interest at all.”
He also talked up the importance of having more parking spaces – the project proposes 400 on the ground level with seven floors of hotel above it at the center – and not taking any away in a resort where parking is problematic and spots are at a premium during the summer tourism season.
In addition, he cited the importance of having more hotel rooms in a resort that he said has gone from 3,000 rooms two decades ago to 750 currently. (Most of Ocean City’s properties that are rented are condos and houses.)
“We, as Ocean City, are down to 750 rooms, and that is not going to stop as the (property) values go up. The motel owners are going to sell and they can build houses or they’re going to make them condominiums. And that’s sad to me because we’re choking off our own lifeblood. The lifeblood of our city and all the barrier islands is tourism. And the No. 1 support of tourism has to be hotel rooms,” he said.
Mita, who also has Achristavest, a luxury home developer – as examples he cited the timeless seashore-style homes he has built on Wesley Avenue and the bay – said not building the hotel does’t harm his business interests.
“It’s not going to make a dent in my life as a businessman, but it’s going to make a dent in my emotions because I think we’re a five-star town and except for the Port-O-Call, we really have two- or three-star accommodations. We just don’t have the infrastructure,” he said.
By DAVID NAHAN/Sentinel staff