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City Would Assume Risk on Marina Property

Documents released Wednesday show details of the plan for a marina at Second Street and Bay Avenue.

In a so-called "revenue-neutral" agreement, the City of Ocean City would pay a private marina operator $135,000 a year to rent its own public property.

That arrangement is outlined in two public documents released on Wednesday (see attached PDFs).

City Council is scheduled to vote to approve the two agreements at a 7 p.m. Thursday (June 28) at .

Council's Thursday vote will determine the fate of a proposal to enter a public-private partnership to develop a marina and public recreation facility on publicly owned open space at Second Street and Bay Avenue in Ocean City.

In presentations to the and , the city administration described an opportunity to attract a private developer to invest in improving the bayfront property at no cost to the city.

Ocean City Marina, LLC — the sole bidder on the project — would pay for improvements to the property (including a public restroom facility and public pier for fishing, launching kayaks and disabled access) in exchange for rights to operate a private marina there.

The proposed agreements provide more detail on the "revenue-neutral" arrangement. The city would pay Ocean City Marina $135,000 annually. The marina would first pay its operating costs then return the next $135,000 in revenue each year to the city.

In essence, the city would be assuming the business risk of operating a 27-slip marina with annual slip fees of $4,200 to $6,300 per year. Because each slip would be equipped with a mechanical lift, the annual fees would be 300 to 400 percent greater than the existing fees.

The marina would have to rent all 27 slips at $5,000 apiece to reach $135,000 in annual revenue.

Only a small handful of boats rent slips from the city at the existing marina, where tidal currents and exposure to the open water of Great Egg Harbor Bay make docking a boat there a challenge. In presenting the proposal, Sean Scarborough of Ocean City Marina said the state-of-the-art lifts would solve that problem.

The proposed agreement would be for 10 years with options to renew for up to three five-year periods. As part of the agreement, the marina would pay the city $102,530 to enter the agreement once all improvements are completed.

The agreement requires that Ocean City Marina have all county and state approvals before it can be executed.

Cape May County owns the property as part of its open space program and is subject to state Green Acres requirements that land remain designated for public use. Ocean City leases the space from Cape May County for $1 annually.

chuck betson June 27, 2012 at 08:13 PM
the deal is dead nobdy from the city ever went to the county and the county is very upset my sources tell me it will be pulled from the agenda tomorrow
chuck betson June 27, 2012 at 08:14 PM
remember the county owns the property and the city leases it from county
Silver Mariposa June 27, 2012 at 09:38 PM
Dear Council.....PLEASE look before you leap - or you may again land in a pile of s***. Important matters should be thoroughly explored and all options evaluated before any action is taken.
Ralph Henry June 27, 2012 at 09:41 PM
Why are "green Acres" money being used for for boat slips?. Ralph
Tom Tumelty June 27, 2012 at 09:42 PM
Reminds me of the city selling our sewer infrastructure to NJ American Water. We all benefited from that with lower water bills and far better water system here. Right?
chuck betson June 27, 2012 at 10:03 PM
now i am told issue will not be pulled from agenda
Eric Sauder June 27, 2012 at 11:52 PM
All depends on who you talk to Chuck. Many thanks to the press for getting information to the public for review. You didn't think the municipality was going to do it? Right?
Eric Sauder June 27, 2012 at 11:58 PM
I certainly appreciate the jist of what you're saying. I've heard that it is the county that handles the sewer portion, which is why you sewer bill is SO HIGH. But you know if you want water you'll pay it.
jane mc c June 28, 2012 at 01:15 AM
Hats off to the Patch and it's STAR reporting.
Joseph M. Griffin June 28, 2012 at 01:29 AM
It is hard to see any profitability from the info I've reviewed. Regardless of expensive lifts; the tide, water depth, & weather remain. Fewer boats will be willing to pay more. I've lived on a boat at that location for several years and know it well. What happens to the lifts-or of more concern the boats on them, during a bad storm? At times, they will be 6-10' in the air & catching plenty of it. At high tide the 4-5' breakers will be taking their higher toll on the hulls unless they are 5-6' above high tide level (and catching more 40-50 knot westelies. What about getting out of the marina without power? Keep looking for other offers city council. Or at least start of with SINGLE DOCK with the experimental lifts.
Eleanor June 28, 2012 at 09:40 AM
'The city' would pay 135,000/yr for use of the marina? No - WE the taxpayers would pay for it. 'The city' does not have money. Now, if city council wants to dig into their own pockets and chip in to pay for it, thats another thing.
George June 28, 2012 at 05:52 PM
so the math is something like this. I believe an average boat slip which has running water and electricity is around $2600/season. I dont know if the place has electric or water, so if this LLC were to have roughly 52 boats, he would break even on the employee cost. The cost of the pilings and dock, not to mention the bulkhead are exreemly expensive. Bay front homes now require the wrapped pilings (BS) which are hugely expensive, the reparian right tax, as well improved bayfront docks now pay a waterway usage tax which is huge as well. Agree with the storms comment as I witnessed it first hand at the Yacht club last friday night. 3-4' waves during the height of the storm cell. Lastly, it seems to me that in the spirit of competitive business practices, the city would not allow only on bidder on this opportunity. In any event, whats done is done, and I hope that positive improvements are made to the facility which will add some value to the boating community and transient boaters as well.
Eric Sauder June 28, 2012 at 09:57 PM
Having reviewed the terms of this agreement (thanks to Patch posting it) it should be evident that the City is assuming an awful lot of risk for little potential reward. In fact the only return that is guaranteed is Scarborough’s. IF he succeeds the City stands to get its money back. Breakeven seems to be the best case scenario although since the City will maintain the upland portion, and regulatory agencies may require much more from it, breakeven is probably unrealistic. I agree that this deal is likely to be a burden on the taxpayers for years and years to come. The exposure to the City is great. There’s the County, the DEP, Green Acres, other regulatory risk, liability risk, market risk, and those risks are going to be borne by the City. Scarborough will get his $135,000 a year. That’s all we can know for sure.
John Maddonni Sr. June 28, 2012 at 10:34 PM
I can see the city having to pay all of the improvements, plus, when this turns sower.
John Maddonni Sr. June 28, 2012 at 10:38 PM
I don't like the agreement. Was there ever a survay about additional docking facilities in Ocean City?
Judy Hall-Laughlin June 29, 2012 at 12:40 AM
I can remember how "boisterous" and "proud" the city was when the area was declared Green Acres. ...Has any of the council or planning board visited the area during the day and evening to see that visitors utilize this, sit on the benches with family or friends and enjoy the view.. People utilize the decks and fish or crab and just have a great time. Or, in the morning, you will find people enjoying a morning coffee in their cars as they look out over the water You won't find this happening when Scarborough takes over the property !!!!!
Judy Hall-Laughlin June 29, 2012 at 12:48 AM
I can just expect to see this ram-rodded down the community's throat with at vote this evening. There has been limited exposure to this and it it was not for the Patch, this would go to a vote with limited community input. I challenge the council to go back in the public record for the comments made by the City Council at the time this area was designate Green Acres and how they were so PROUD that the tourists would be able to freely spend time in the "only available bay access" in Ocean City. There would be a public boat ramp etc. Funny, how this was and seems to have been orchestrated by the City Council with Scarborough knowing that if he made a deal to the City, they would turn around and make a deal right back so that he ultimately got control of the land that he owned. And, that is exactly what has happened.. Suddenly, the tourists are no longer considered nor has any council member visited the area to see how people enjoy the area to just sit on the benches with family, friends,children or grandchildren. I bet they do not see the grandparents/ or parents fishing or crabbing at the end of the docks with their children. I know one boy locally that goes to that fishing dock every day to just fish and loves every minute of it. I can just see Scarborough allowing access like this.......!!!!Not a chance.
Eric Sauder June 29, 2012 at 02:42 AM
Well its a done deal now. I was the only citizen to really challenge the deal. I do believe it was made months ago.
Linda Barnes June 29, 2012 at 08:33 PM
Judy, Your comments are the best I have seen through this whole ordeal. You are so right. I wonder if City Council ever reads this. Linda
feasterville resident June 30, 2012 at 08:57 PM
It certainly is a litigious society that we live in. Eric, for the city solicitor to state that you can be sued, shame on her. I did not recollect the so called "presentation". To point out something is wrong with your statement is fine but to say you can be sued brings it to a different level. Yeah, over the top......... We as taxpayers of Ocean City have no ill mannered agenda against anyone, we just want to be informed.
dom k July 01, 2012 at 01:17 PM
Typical slips for a summer season of April to October go for about $1900 with water and electric, if you are lucky. Just Saying.... Also, unless all those docks are being ripped down and rebuilt with better space for a boater to dock considering those horrible currents that have disaster written all over it, then all those fancy lifts he's adding in there isn't going to do much if its a pain in the ass just to get to the slip.
dom k July 01, 2012 at 01:18 PM
and what happened to that barbara chick that was obviously on the scarborough side of things trying to correct everyone that had one little bad thing to say about anything!!??? all of her comments disappeared
Eric Sauder July 02, 2012 at 08:57 AM
Sorry feasterville I decided to remove my comments. I mean at this point the thing has been done and no one else seems to be all that interested (which is why I think these things happen with as much frequency as they do). I didn't like the way things were done and said as much. But it doesn't do me any good to be the only one to care.
Barbara Betson July 02, 2012 at 11:52 AM
For your Information Dom K This CHICK is a 50 year old woman that is a Tax payer in this community. My life does not revolve around making comments on the Patch. Having said that, because of the currents at 2nd and Bay is why motorized lifts are being proposed for the Docks. All Docks and piers are going to be replaced and there will be a nice long dock for people to still enjoy Fishing and also launching Kayaks etc. The Problem in this world is that there are to may narrow minded nay-sayers that judge before they give anyone and thing a chance. I am just glad that someone is stepping forward to Fix these docks. And if it is Sean Scarborough more power to him. No one else stepped up with a bid. Now all we need is Grean Acres and Cape May County on board. Remember the City still controls the Upland. Now, this CHICK is not going to waste anymore time on this issue, and with that, Everyone have a NIce and Safe 4th of July.
LMFAO July 02, 2012 at 01:07 PM
your def not the only one that cares. someone else went to put a bid in, and the city made it impossible for them to do so because they had this "project" in the works with scarborough. whoever has the most money has the city's attention.there was also a few issues with getting permits for the docks, DEP is a real pain so good luck sean!!!!!!!!!!
Ellen July 02, 2012 at 02:14 PM
sour.
Eric Sauder July 02, 2012 at 06:13 PM
LMFAQ I'd be interested in knowng the particulars, if I can't be sued for asking.
feasterville resident July 02, 2012 at 07:57 PM
Eric and LMFAO, i too am interested. I dont see how this project is monetarily viable. Spruce-up the area for public recreation, maybe a park setting? The currents are wicked in the area for docking boats. There are several properties for sale on the bay near this location. Is someone going to buy them and build residential, ergo, a so called marina would be attractive to the builders. There seems to be an obscure agenda.
Eric Sauder July 02, 2012 at 09:31 PM
In regard to what I stated at the Council meeting ... that I found it curious that Mr. Scarborough formed an LLC (Ocean City Marina) a month prior to the first RFP being issued, the City Solicitor stated that notice was given at a prior council meeting of the intent to float an RFP for the marina. I reviewed the DVD of the meeting of 10/13/2011, which predated the LLC by 4 days, and sure enough councilman Allegretto, at that meeting, made a statement to that effect. I was searching for an explanation as to how this could have happened and I now have one. I still take issue with how the City conducted itself throughout the process, the terms of the deal, the lack of public disclosure as to the terms of the deal, and the rapidity with which it was pushed through. The first ADVERTISED public meeting was held on Monday night before the vote on Thursday, which didn't give the press time to report on it (in print) before the vote was taken. I also found, on a revised agenda for the Planning Board, that it mentioned a "presentation" on the Marina District. A vote was taken at that meeting in which the members of the board "approved" the project. I was not at the council meeting where a similar "presentation" was made, and found no mention of it on council's agenda. I attended the council meeting of 10/13/2011. It was over 3 hours long and there were other items on the agenda (specifically the rezoning of 13th and Haven) that had my attention.
Eric Sauder July 03, 2012 at 01:46 AM
Featerville is close to York, right? You're a white rose then. I'm a red. Nice talking with ya neighbor. Word is a high rise condo was originally envisioned for that site but the zoning was changed. At any rate that specific lot is now in Green Acres, so building would be prohibited. In case you're late to this there's a considerable amount of background you might not be aware of. I agree that this project does not appear to be monetarily viable (for the City at least). As for whether the marina will make those other lots more valuable, you could be right. Thanks for getting involved (I assume you're a second home owner here.)

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