Ocean City Today

City Council pushes forward with $28M bond

By Katie Tabeling | Nov 23, 2017

(Nov. 24, 2017) Despite last-minute arguments from residents, the Ocean City Council approved a $28 million bond ordinance to pay for three major construction projects Monday night.

The bond covers a 30,000-square-foot addition to the convention center at $34.4 million, a transit facility on Second Street at $3 million, and the Public Works campus at $29 million.

The state is paying $20.4 million of the convention center. Federal grants are covering $18 million of the Public Works Campus, which includes a bus barn, a new administration building and a parking garage.

These projects have been in the works for more than a year, but resident and former councilman Vince Gisriel urged the council to reconsider their need.

Gisriel also took issue with how city officials handled the matter, contending that his past questions on the Public Works Campus plan were not sufficiently answered.

“I sent a letter in March, and I’ve heard no real discussion since,” he said. “I think it’s at the point where I think it’s a big chunk of money that should be studied.”

Concerning the bus barn, Gisriel pointed out that the city had kept buses outside for 16 years, long after they exceeded what federal guidelines say should be their useful lives.

The main target of Gisriel’s criticism was the convention center’s third expansion. Past market feasibility studies, he found, showed that 70 percent of major convention centers require less than 40,000 square feet of exhibit space, while more than 65 percent required less than 25,000 square feet. Eleven percent of Maryland convention and exhibits require 90,000 square feet, he said.

“It’s like these towns around us are expanding, and we’re trying to keep up with them,” Gisriel said. “It reminds me of when a new mall is built two blocks from a shopping center with a lot of vacancies.”

Although city officials said the convention center would be paid for with $14 million from food tax from the facility, Gisriel pointed out the fine print allowed the city to levy and collect taxes upon all taxable property to pay off the deficiency.

To that end, Gisriel said, he recommended putting the issue to referendum.

“I think it’s time for the city to vote on nonessential items like this ordinance. Let them decide if they want to be indebted to this kind of money,” he said. “It benefits the officials to come up with a concept that has merit and pitch it to the voters.”

Local activist Tony Christ also argued the convention center only had a 29 percent occupancy rate. As for the transit facility, he thought it was irresponsible spending of taxpayer money.

“We know that infrastructure needs to be maintained, but really? A multi-level parking garage?” he asked. “What would you do with your own money, people? I doubt you would do all of this.”

Councilman John Gehrig told the public that most of these projects would be paid through a partnership with federal and state governments.

He saw the bus barn as a way for the Maryland Transit Administration to protect its investments, as the buses are federal and state property until they are retired.

The cost for each bus is split 80-10-10, between federal, state and local governments.

“They paid 90 percent; they consider it a federal asset, and they’ve been at the table [planning this] all along,” Gehrig said. “We wouldn’t be doing this if they weren’t funding it.”

Ocean City is paying no “cash out of pocket” for the bus barn, because the federal and state agencies accepted the land the facility will be built on as Ocean City’s 10 percent match, Public Works Director Hal Adkins said.

Gehrig also said the convention center expansion and the tram facility are another way to invest in the city’s success. He saw the ordinance’s language concerning potential tax increases as a formality. If a tax did increase “by half a percent,” it would be for the greater good.

“It’s the tourism aspect that allows restaurants to invest. I’m happy to pay … an investment in infrastructure,” he said. “We don’t invest, we don’t have customers, we don’t have customers, your property tax goes up for sure. And no one wants to do that.”

The bond issuance passed 6-0, with Council President Lloyd Martin absent.

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