The state Green Acres Program announced new funding on Tuesday that includes a $25,000 loan and a $300,000 matching grant that could help the city buy beachfront property at 19th Street to protect it from development.

Representatives of estate of Helen Schilling are seeking permission to build a luxury home on the land, while neighbors and other Ocean City residents oppose the idea of "building on the beach." The battle focuses on a unique stretch of undeveloped land along the Ocean City Boardwalk between 19th and 20th streets.

City Council passed a resolution in February that called for applying for the matching grant — with 25 percent ($300,000) coming from the state Green Acres program and 75 percent ($900,000) potentially coming from a group of neighbors interested in protecting the property from development.

Tuesday's announcement from the state Department of Environmental Protection's Green Acres Program puts one piece of the puzzle in place.

But in order for the property to be purchased and protected from development, the neighbors would still have to provide the $900,000 share and the estate would have to accept an offer in the range of the combined $1.2 million.

Richard Hluchan, the attorney representing the estate, said earlier this year that the estate remains open to any offer for "fair market value" on the three beachfront lots.

Hluchan represents the trustee (a BNY Mellon administrator) of the estate of Helen Schilling (who passed away in 1998). Helen and Charles Schilling (who died in 1980) had no children and no heirs, and the beneficiaries of her estate include Shore Memorial Hospital, Abington Hospital and the Ocean City Tabernacle.

The group of neighbors offered the estate $700,000 earlier this year, but their offer was turned down. A second and higher offer also was made.

Clement Lisitski, the Ocean City attorney representing the neighbors, said on Wednesday that he remains in discussions with Hluchan on a potential purchase price.

At the same time, Lisitiski said he has appealed the state Department of Environmental Protection's approval of the project in the state Appellate Divison and requested a hearing on the permit that would take place in the Office of Administrative Law.

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More on the Schilling estate:

• Read more on the history of the property and DEP application.
• See interactive satellite map of the property.

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City Council met in an executive session on Thursday, Aug. 16, "to discuss the application to the New Jersey Department of Environmental Protection by the estate of Helen Schilling to obtain certain permits relating to a development proposal regarding 19th Street & Boardwalk."

With the following day the deadline to review of the DEP's permit for the project, City Council may have lended its support to Lisitski's request for a hearing.

The city outlined many of its concerns with allowing development on the property in a November letter to the state Department of Environmental Protection, which gave preliminary approval to a permit application for building on the property.

In the letter, Allegretto accused the state of bowing to the threat of a lawsuit and passing the potential cost of it to Ocean City. 

"Rightly or wrongly, the Final Analysis is seen by many as a rationalization to approve development on the subject property to avoid the risk of the State being liable to compensate the applicant if the original permit denial was unchanged," Allegretto wrote. "It follows in such reasoning that the State by approving development is unfairly exposing the City of Ocean City to the same liability intentionally avoided by the State."

The letter outlines Ocean City's objections:

• Allowing building on the property could hurt Ocean City's chances of qualifying for future beach replenishment funding.
• The state's analysis incorrectly suggests that the proposed house conforms to minimum zoning setbacks (the proposed building area is just five feet from the neighboring properties).
• The state's analysis makes no mention that tidal waters flowed over the property before the beach replenishment project.
• The state offers no explanation for why it's allowing a footprint (2,870 square feet) larger than any of the neighboring homes.
• The state didn't complete any legitimate study of whether the property could be a habitat for nesting birds.
• The analysis is inconsistent with previous rulings from the DEP related to properties in Ocean City.

The city could use the Green Acres grant to help eliminate its concerns about developing the property buy purchasing it for preservation.

Tuesday's grant announcement was part of almost $66.2 million in funding to local governments and nonprofit land trusts to acquire open space and develop parks throughout New Jersey, according to a news release from the state.

"Green Acres was created in 1961 to meet New Jersey's growing recreation and conservation needs," the release said. "Together with public and private partners, Green Acres has protected over 650,000 acres of open space and provided hundreds of outdoor recreational facilities in communities around the State. The total acreage of protected open space across the State now exceeds 1.4 million acres."