Klause Enterprises building on former car lot

The 1973 building on the 1.86-acre Klause Enterprises property between 16th and 17th streets and Haven and Simpson avenues in Ocean City. 

OCEAN CITY — A citizens group has collected enough valid signatures to force a referendum on a city plan to bond to buy a former used car lot for $9 million, and the mayor now says the sale will not happen.

“Our sales agreement with the Klause family expires Oct. 31,” Mayor Jay Gillian wrote in his online letter to residents Friday, about the 1.86-acre property next to the Community Center. “This petition prevents the city from completing the purchase before then.”

Jerry Klause had said he would pursue developing the property if the petition succeeded in forcing a vote.

City Solicitor Dorothy “Dottie” McCrosson also said at a council meeting that Klause offered the land to the city for $9 million and was not willing to negotiate a lower price.

“Because buying the property is no longer an option, there will be no need for a public vote, and I have recommended that City Council repeal the funding ordinance at the next public meeting,” wrote Gillian.

Fairness in Taxes Vice President David Breeden said Friday the group is pleased and happy it was able to secure enough signatures.

“A lot of people agree the city should buy the land, but not at $9 million. And there should be a plan for what to do with the land,” said Breeden. “It is troublesome we had to go to such extreme measures to get the attention of mayor and council.”

The city has gotten three appraisals of the land ranging from $8.3 million to $9.1 million, but critics have said the city instructed the appraisers to make unrealistic assumptions about what could be built there and the condition of the land.

They have also said the appraisers used inappropriate comparison sales.

The property, including the former car lot building, was assessed at $3.4 million, city tax records show.

Council voted in September to bond $8.55 million for the sale, and to pay an additional $450,000 in cash as a down payment, to brothers Harry and Jerry Klause.

Gillian and council members had argued for the purchase, saying the property would otherwise be developed into 29 high-density coastal cottages and one single-family home.

But FIT and others argued a court decision that allowed coastal cottages there was no longer valid.

The city had no specific plans for the land. Gillian had said the city would go through a public process to choose what to do with it after the purchase.

FIT representatives objected to the price and started the petition drive to force a vote on the ordinance. The earliest the vote could happen was next spring, according to city officials.

The city clerk certified the petition and notified FIT it included a sufficient number of signatures in a letter dated Oct. 25.

Breeden said FIT wants council to get back to a “concept, design, fund, build” approach to public projects.

“That approach encourages public participation at meetings,” Breeden said. “For some reason, council has abandoned that practice that was quite successful for many years, and goes straight to funding.”

He said there was no excuse for not having a plan for the land.

“When you ask people to spend $9 million and don’t have a plan to support it, that’s a hard pill for a lot of taxpayers to swallow,” said Breeden.

Contact: 609-272-7219 mpost@pressofac.com Twitter @MichelleBPost

Staff Writer

In my first job after college got paid to read the New York Times and summarize articles for an early online data base. First reporting job was with The Daily Record in Parsippany. I have also worked in nonprofits, and have been with The Press since 1990.

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