Building on the Beach: Schilling Battle About to Hit Home

Helen Schilling left the three undeveloped beachfront lots untouched for 45 years, eventually watching time, tide and erosion leave them underwater for parts of many days.

But 13 years after her death, the land is at the center of an escalating fight.

Representatives of Schilling's estate want to get permission to build a luxury home on the land, now elevated by more than 10 feet courtesy of a massive publicly funded beach replenishment project in 1992. 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. The central question: Is it the beach or is it prime real estate?

__________

You make the call:

• Read the full text of the state DEP's analysis and three letters objecting to it by clicking on the PDF icons above.
• See interactive satellite map of the property.

__________ 

The state Department of Environmental Protection answered unequivocally three years ago when it denied permission for the proposed project. It said it was beach and protected dune.

But last month — amid an ongoing lawsuit — the DEP changed its mind, even though nothing about the land changed. The DEP now appears ready to say it's real estate.

The lawsuit likened the state's denial to a seizure of private property and demanded compensation for the property owners.

The DEP had options to pay the owners, continue to fight the lawsuit or reverse its decision. It chose the latter, releasing a "final analysis" that reconsiders its earlier position (pending a public comment period that ended Nov. 18).

The question now moves to Ocean City, and the stakes are potentially high.

Ocean City fights back

In a letter to the state DEP (see attached PDF) signed by City Council President Michael Allegretto, the City of Ocean City accuses the state of bowing to the threat of the 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 came out of a Nov. 15 executive session, closed to the public, in which City Council likely discussed "pending, ongoing or anticipated litigation" related to the case.

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 same night that City Council met in executive session, Ocean City's Environmental Commission met and agreed to send a similar letter to the DEP expressing concerns about the precedent and impact of the decision.

The letters were part of the public comment period required before the DEP can make its final decision.

History of the property

Helen and Charles Schilling bought the lots in 1953 for $14,000. The couple owned Shriver's Salt Water Taffy, the Strand and Moorlyn theaters, parking lots and other properties on and off the Boardwalk.

The Schillings never made any effort to develop or protect the beachfront properties. Unlike the neighboring lots, the Schilling property had no protective bulkhead, and by the 1980s, storm tides and even normal high tides washed under the Boardwalk and right across the properties.

A successful 1992 beach fill project changed the landscape. Engineers pumped enough sand onto the lots to raise their elevation by 10 feet and built a protective dune that separated the lots from the ocean.

From the street, the properties look like beach — 19th Street ends at a bulkhead and there's nothing but sand on the other side. From the air, the lots look a little more like real estate — a gap in a clean line of properties that abut the Boardwalk. To the north, between 18th and 19th streets, a similar set of undeveloped lots is owned by the city or by neighbors.

Charles Schilling died in 1980 and Helen passed away in 1998. The couple had no children and no heirs, and the beneficiaries of her estate include Shore Memorial Hospital, Abington Hospital and the Ocean City Tabernacle.

Most of the Schilling estate was sold within two or three years with the proceeds going to the charities. But the beachfront properties remained.

The city offered $15,000 apiece for the lots in 2001, Wesley Avenue resident Alex Maggitti told the Environmental Commission last week. He said a group of neighbors offered the estate $700,000 earlier this year. Both offers were turned down.

Current City Solicitor Dorothy McCrosson formerly represented the estate, and she has recused herself from advising City Council on the matter. Mayor Jay Gillian is chairman of the Shore Memorial Board of Trustees and has not participated in any of the discussions on the issue.

The proposed development

The state's final analysis (see attached PDF for the complete text) of the estate's Coastal Area Facilities Review Act (CAFRA) application authorizes a two-story single family home of 5,740-square-foot single-family home with a footprint of 2,870 feet and a pool and detached garage.

The proposal would move the existing bulkhead in line with existing bulkheads to the south at a spot 42 feet from the Boardwalk. At the applicant's expense, 19th Street would be extended 52 feet, and water and sewer lines would also be extended.

The proposed building area would be five feet from the neighboring properties, 10 feet from the extended 19th Street and 25 feet from the new bulkhead between the new home and the Boardwalk.

The state's reconsideration weighs two factors heavily: the estate's right to compensation for "minimum beneficial economically viable use of the property" and the determination that the development "will not result in irreversible loss of value and functions provided by coastal resources or other protected resources."

In a lengthy document, the state argues that the land is not part of a primary dune system and that the Schillings had a reasonable expectation that they would be able to develop the property.

Representing a group of neighbors opposed to the application, attorney Clement Lisitski said the DEP "capitulated completely." (See Lisitiski's response and comments from expert Susan D. Halsey by clicking on the PDF icons above.)

Representing the trustee of the estate (whom he identified last week only as a BNY Mellon administrator), Richard Hluchan said the estate has a right to develop the land or be compensated if the state or city denies that right.

If the state DEP finalizes its reconsideration, the estate would be subject to the same permitting process as any other development in Ocean City — including a zoning permit process that could potentially find nonconformities with the proposed setbacks, street-end extension and flood regulations.

Neighbors' concerns

John Stauffer, who lives across Wesley Avenue from the beach block, spoke to City Council during public comment before the Nov. 15 executive session.

"Citizens paid a lot of money to pump sand there to make those lots buildable," he said, noting that the property owners never paid more than about $70 per year in taxes on each of the "unbuildable" lots.

"It's beach," Stauffer said. "I've always understood it to be beach."

Stauffer, who has lived in his current home for about 31 years, showed City Council photographs (see above) of storm tides washing up to and over the bulkhead at 19th Street in the late 1980s and early 1990s.

Later last week, he pointed out the flattening of the dunes at Waverly Beach on the north end in a 2009 nor'easter. He suggested the same thing could potentially happen at 19th Street and that development in the buffer zone would only contribute to the problem.

Pat Juliano, who lives on Wesley Avenue directly adjacent to the proposed development, said he remembers the Halloween storm of 1991 and a similar nor'easter a few months later in early 1992, when the ocean water washed through the ground floor of his family's home.

"I know they say it's the view," Juliano said. "But that's not the case."

Juliano said he's been around long enough to know that water flows downhill, and while his home has been protected in recent years by a healthy dune system, that may not always be the case. He worries that building on sand pumped by the federal government may imperil future beach replenishment projects.

His family was also part of the group that offered $700,000 for the three lots, an offer he considers fair to the estate and its beneficiaries.

"We would love this thing to be resolved peacefully and reasonably," Lisitski said. "But it's going to take some compromise. ... You're in a situation where I don't think you have a villain."

But if the estate does not consider a reasonable offer from the neighbors for the purchase of the properties, Lisitski said the neighbors are prepared to fight and could potentially appeal the DEP's reconsideration at the Appeals Court level.