Bank Sues Ocean City Over Bellevue Hotel Lien

Ocean City's attempt to recover the $314,270.99 it claims to have spent fighting a fire then demolishing the Bellevue Hotel has been met with a lawsuit.

City Council met in executive session Thursday (Dec. 12) to discuss a complaint filed in January 2013 by Fox Chase Bank.

The bank holds mortgages on the property at Eighth Street and Ocean Avenue that was home to the Bellevue. Ocean City placed a municipal lien against the property for the full amount of demolition and disposal costs, in addition to fire and police expenses. The property cannot be sold without satisfying the lien.

The complaint alleges the costs incurred by the city are excessive and inaccurate, and that the city should pursue reimbursement for some costs from the contractor responsible for the fire.

The Bellevue was constructed before 1907 (though the exact date is not known, according to the Ocean City Historical Museum). But by 2012, it was abandoned and falling into disrepair.

After a neighbor discovered an exterior wall bulging at unnatural angles in August 2012, city officials discovered of a pond of rainwater on the flat roof of a four-story addition to the main hotel. The hotel was ultimately condemned as a public safety hazard, and the owner was ordered to demolish it.

But Ocean City Plaza, LLC, was unwilling or unable to complete demolition, so the city took on the project. The city awarded a $158,000 emergency contract to Terra Technical Services, LLC, of Downingtown, Pa., to demolish the entire hotel.

Demolition work began in September 2012. On the second day of demolition, a worker's blowtorch allegedly caused a fire on the upper floors of the building and led to a massive firefighting response and the immediate demolition of the rear portion of the hotel.

After the fire, demolition work was completed and all debris was hauled away, leaving a potentially valuable empty lot two blocks from the Boardwalk.

The contractor was insured, and the City of Ocean City filed litigation against Terra Technical in an effort to recover costs, according to City Solicitor Dorothy McCrosson. The litigation continues.

The lawsuit filed by Fox Chase says state law (NJSA 40:48-2.5) sets forth a detailed procedure for notices and hearings that municipalities must follow when they execute demolition liens. The suit alleges that Ocean City failed to comply with the requirements of the law. McCrosson said a judge found the claim of procedural errors unfounded.

The complaint, filed by Linwood attorney Charles Gemmel on behalf of Fox Chase, asks for the lien to be amended to reflect a "reasonable amount" for demolition and disposal costs.

City Council took no action and made no comment in public session about the lawsuit.

Read more about the Bellevue:

• Bellevue Hotel Was Once a Portrait of Elegance
• State Had Told Ocean City to Preserve Bellevue Hotel
• Firefighters Control Blaze at Bellevue Hotel
• City to Demolish Bellevue Hotel
• Abandoned Bellevue Hotel Declared Unsafe After Water Damage