Rising real estate prices adds to cost for former Chevy dealership, nearby lots
OCEAN CITY — Due to the length of time it has taken the city to acquire the former Chevy dealership lot and neighboring parcels, the cost has climbed to more than $17 million as real estate values have soared.
At Thursday evening’s Ocean City Council meeting, members voted unanimously on two ordinances regarding the now-empty lots between Haven and Simpson avenues between the Ocean City Community Center at 17th Street and Emil Palmer Park at 16th Street.
The first was to approve spending another $3.15 million on the Palmer Center lots at 16th Street. The city already has $5.6 million in place for that purchase. The new spending is $1.6 million more for the purchase price and $1,582,480 for environmental cleanup.
According to city solicitor Dorothy McCrosson, the supplemental spending is because of the increased value of the property. Real estate values have been rising nationally and especially in Ocean City over the past few years.
The planned spending on the Palmer parcels now stands at $7.2 million with this supplemental ordinance.
Of the money for environmental cleanup, the city will pay for it and then do a cost-recovery action to reclaim that money so it won’t go into the purchase price, McCrosson said.
The other ordinance is to spend $3,060,000 more for the former car dealership lot. The city set aside $6.9 million previously, but the current valuation put it at $9,960,000. Another $25,000 is for an environmental closeout on the property because it did not require any environmental remediation, unlike the Palmer Center properties.
Together it will cost $17,160,000 to purchase this space for the city, which was taken by eminent domain after the city and the families that owned the properties could not agree on a purchase price.
The city had tried to buy the 1.856-acre dealership property in 2018 for $9 million, but citizens group Fairness In Taxes got enough signatures to force a referendum against the spending, arguing the city was paying too much because the appraisals were a few million dollars lower.
The Klause family, which owns the former dealership lot, threatened to build 29 coastal cottage on the site.
Once there were enough signatures for a referendum, the sales agreement expired and council repealed the ordinance to buy it.
That led to the city going after the space again via eminent domain and they added the adjacent Palmer Center properties owned by the Flood family to create a contiguous city-owned parcel between the Community Center and Emil Palmer Field.
The city has wanted to purchase the lot to prevent it from being developed. No specific plans have been announced for the property.
Members of Ocean City Council voted 7-0 to approve both ordinances without comment.
By DAVID NAHAN/Sentinel staff