Bank Sues Ocean City Over Bellevue Hotel Lien

Ocean City placed a lien on the property to recover firefighting and demolition costs.

Demolition work at the Bellevue Hotel begins in October 2012.
Demolition work at the Bellevue Hotel begins in October 2012.
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:

Richard Jacoby December 16, 2013 at 04:59 PM
Firefighting costs? What? Firefighters are paid by the taxpayer already. What's next. Call the police and they hand you a bill when they come. Give me a @--$?? Break. Demolition costs. Fine. But that's it.
OCnjOC December 17, 2013 at 12:09 AM
More negligence by the Mayor, City Council, and the so-called City Solicitor. The local welfare cheats keep voting these people in thinking they are getting free stuff from the shoobies and look what keeps happening.
George December 17, 2013 at 07:18 AM
Double money grab opportunity that will now have to go to pay the attorneys. no one wins this one. I understand why, but poor judgement in trying to recover tax payer expenses.
Eric Sauder December 17, 2013 at 12:13 PM
First of all the Bellevue was an historic building. The City got in trouble for demolishing it without consulting anyone. The state found that it was historic and wanted it preserved. The section that was failing was the addition (which may not have been historic) and if they there was an immediate need to demolish anything it was the addition. By simple subtraction it appears that the City billed the bank $156,000 for fighting the fire that resulted from the demolition, which cost $158,000. Apparently the bank has sticker shock over what it costs the City to do anything, It seems to me the root of the problem is a lack of impulse control. We haul off and do stuff like this without considering how it needs to be done, or what the effect will be of just doing it. The façade of the building, at least, could have been preserved. Now we lost another historic structure and are stuck with the bill.
Eric Sauder December 17, 2013 at 12:25 PM
We should of course be consoled by the fact that the City Administrator went thru the building and in his judgment the entire building needed to come down. Me I would get the opinion of someone who has the knowledge and experience to make that call.
Frank December 17, 2013 at 12:30 PM
Eric - did you read the article and all of the information? The city consulted the state and other experts. I think you must comprehend only the information that will support all of your constant negativity toward the city. Has anyone EVER pleased you?
Eric Sauder December 17, 2013 at 12:38 PM
Frank I was following it all along, and if you read the links associated with this article it should become clear to you.
Eric Sauder December 17, 2013 at 12:42 PM
The State wanted it preserved. The City demolished it.
Eric Sauder December 17, 2013 at 12:45 PM
That's kind of like painting the curbs on a County road and the County demanding the paint be removed? Or leasing out county property? I know Frank you need to be positive but the facts are what the facts are.
Eric Sauder December 17, 2013 at 12:49 PM
The fact is this administration keeps assuming authority it doesn't have and keeps getting called on the carpet for it.
Eric Sauder December 17, 2013 at 01:02 PM
The City Administrator made that comment at a council meeting and he went thru the building with the City Engineer. The State found the City Engineer unqualified to make that call. So in a way I can excuse the City Administrator because he probably didn't know any better.
Bob Booey December 17, 2013 at 05:10 PM
The city is has shown a history of procedural wrong doing. That said, I walked through this property a few years ago to consider if it had a value for purchase. The property was in significant disrepair and would not be worth investment. The only value in the property was the land and the building complicate that value with a significant demolition cost. State historical regulations were an issue then and that was reason number 2 for this being a loser for anyone thinking of purchasing. This property is one of those complicated projects that dot the island and will be avoided by the smart investor unless they have access to government assistance.
Eric Sauder December 17, 2013 at 07:46 PM
Well it does happen. I refer again to my home town where the façade of an historic building (Watt and Shand) was preserved. It was turned into a hotel and convention center. You basically gut everything but the façade and build new, but the building retains its historic presence and footprint. I suspect that was the kind of redevelopment the State was hoping for.
Bob Booey December 17, 2013 at 08:51 PM
Perhaps I was not clear in my experience inside the structure. I felt as though I would either fall through the floor or the walls would come down if I leaned on them. It was truly scary to be inside. I walked away and never looked back. The kind of redevelopment you describe sounds like what was done to the White House in the early 20th century. The expense was not limited as the tax payers were given the bill. Hardly the behavior I expect with taxes collected from me. The city was placed in a difficult situation as the building became structurally unstable.
Eric Sauder December 18, 2013 at 03:52 AM
You know I do feel bad about all the negativity but there seems to be a pattern here and I don't understand how stuff like this keeps happening. We were executing easements that regulated the height of dunes even after a State ruling that prohibited it. We're being sued for that too. If we get stuck in between a rock and a hard place its often our own doing. I didn't go thru it but then I don't have the expertise to judge the structural integrity of a building. Unless the walls were an imminent threat to collapse into the street at least the exterior of the building could have been saved. If you're ever in Lancaster check out the (I think its a) Marriott at the intersection of King and Queen.


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