After four years, Cape May has finally dropped its misguided lawsuit over a new Convention Hall that seemed to some to not meet flood insurance standards. But not before it spent $448,000 in legal fees, with nothing to show for it.
The hall was constructed and opened Memorial Day weekend in 2012. It replaced one built by the city’s public works staff after a nor’easter destroyed its much larger predecessor in 1962.
Five months later, Superstorm Sandy hit. The new hall wasn’t damaged, in part thanks to a hastily created sand dune to protect it. But afterward, officials said it wasn’t covered by flood insurance. Then they reversed and said it was, through the Atlantic County Municipal Joint Insurance Fund.
Then it turned out that part of the new Convention Hall was only 8½ feet above base flood elevation, while the Federal Emergency Management Agency recommends 15 feet for its oceanfront location.
City officials including then-Mayor Ed Mahaney tried to blame the companies that designed and built the hall, suing them in 2016.
But as we warned the city at the time, “Since the entire hall-building process required city approvals and inspections, the city’s attempt to hold others liable looks like a gamble. Legal costs already seem to be outrunning flood insurance costs.”
The city attorney said much the same to City Council last week, urging them to drop the lawsuit. “Economically, it makes no sense to continue litigation, even if the flood insurance premiums remain the same,” Frank Corrado said. The companies rejected the city’s claims and wouldn’t agree to settle with them either.
We noted in 2016 that the entire hall was above the recommended 15-foot elevation except for a small room with a sump pump and fire-suppression equipment. The president of the architecture firm involved said the building was compliant with FEMA guidelines and suggested the city may have done a bad job filling out its flood insurance application.
Maybe so, since FEMA has given the city a letter saying the building is acceptable and its $50,000 flood insurance bill is less than half what it started out paying.
It would be a happy ending, except for the waste of close to half a million dollars in taxpayer money. Sometimes the government response is worse than the imagined risk.