Ocean City real estate environmental cleanup costs rise



Environmental cleanup is underway due to suspected contamination from a former dry cleaner that once occupied the site.

Written by Donald Witkowski

Ocean City is putting in an additional $850,000 to cover the increased cost of removing contaminated soil from land acquired through Notable Lands and planned to be preserved as open space.

However, city officials said Ocean City will receive a credit for environmental cleanup costs from the property’s previous owner, Palmer Center LLC, once construction is completed and a final price for the land is determined. He emphasized that.

“Again, the previous owner is responsible for the actual cleaning,” City Councilman Tom Rotondi said.

The City Council introduced an ordinance Thursday night authorizing $850,000 in additional funding for ongoing site cleanup work at 16th Street and Haven Avenue and 109 16th Street. A public hearing and final vote on the ordinance is scheduled for the March 28 council meeting.

City Attorney Dorothy McCrosson told the City Council more funding is needed for environmental remediation work, primarily because of the rising cost of disposing of contaminated soil in facilities that can properly treat it.

City contractors have been working for several months on the Palmer Center property to clean up contaminated soil believed to have come from a former dry cleaning business.

In 2021, the city used its prominent land power to acquire the Palmer Center land after failing to reach an agreement with the group on a final price. The Palmer Center is headed by developer and former city councilman John Flood, who ran unsuccessfully for mayor against Jay Gillian in the 2018 mayoral election.

The city offered to pay Palmer Center $5.6 million for the land, but the two sides are still fighting in court over the final price. The City Council went into a closed session Thursday night to discuss the lawsuit, but declined to comment as the legal battle continues.

In addition to the $5.6 million cost to purchase the land, the city previously set aside $1.55 million for environmental cleanup costs. This time, an additional $850,000 will be paid on top of the $1.55 million to cover the increased cost of the cleanup.

“It would be more expensive to remove the material in the soil as required by law,” said Frank Donato, the city’s chief financial officer.

The City Council will introduce an ordinance authorizing $850,000 in aid for the cleanup effort.

City officials have repeatedly said that Ocean City will seek reimbursement from Palmer Center for cleanup costs after repairs are completed and a final purchase price for the land is determined.

“Of the funds already paid in court for the purchase of that property, just over $1.5 million has been seized as reimbursement for the city’s remediation efforts. action will be taken,” McCroson told parliament at Thursday’s meeting.

The Palmer Center site is part of three parcels the city acquired through prominent lands to create a parcel adjacent to Haven and Simpson streets between 16th and 17th streets next to the Ocean City Community Center. One of the premises.

The land will be added to a corridor of open space protected from dense residential construction. The city plans to dedicate a five-block area from 15th Street to 20th Street to open space and public use.

Recently, the city finally ended a long legal battle with the private owners of the property adjacent to the community center by agreeing to pay $20 million for the land.

The city used its prominent land power to acquire the land from Kraus Enterprises in 2021 and preserve it as open space after brothers Jerry and Harry Kraus proposed developing the land for residential construction.

The city originally sought to purchase the land for $9 million. However, the case went to court over the price of the land. Last October, a jury decided the city should pay Krause Enterprises about $17.9 million for the property.

Approximately $17.9 million plus interest payments brought the total amount to $20 million.

The property was best known as the site of the Perry Egan car dealership. The city’s main purpose in acquiring the land was to prevent dense development on the site. At one point, Brother Kraus proposed that he build 22 single-family homes on this land.

Rows of pipes piled up on the premises for environmental cleanup work (photo taken in December).

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