Air rights and rights-of-way in Ocean City may soon come with a price after City Council members recently voted to advance a new policy that would require appraisals.
Currently, when staff members receive a request to build in or use a city right-of-way, typically an alley or other public piece of land, council members determine whether the land is needed for public use. They then decide whether the land can be abandoned, and if so, typically make a trade involving an easement or other property. The same goes for air rights, or the sky above land slated for development, that would be occupied by vertical construction.
However, as City Manager Terry McGean explained during a work session last week, no formal policy had existed for the practice.
In turn, based upon suggestions and comments about some recent projects where developers requested air rights, McGean developed a proposed policy that requires appraisals for both air rights and rights-of-way abandonments. It also gives council members the right to waive the appraisal if they see fit.
Council members voted 6-1, with Councilman Peter Buas opposed, to advance the policy during the work session. Buas said he voted against it because the town does not technically own the underlying properties.
During discussion about the policy, Councilman John Gehrig asked the difference between rights-of-way and air rights, and real property. McGean said the main difference is that anyone can buy real property, while that is not the case with rights-of-way.
Councilwoman Carol Proctor also asked how the appraisal on air rights would be done, as it is something that has never been monetized before. McGean said that question would need to be answered by a real estate appraiser.
Recently, the developers of a proposed Margaritaville resort planned between13th and 14th streets along the Boardwalk asked for abandonment of air rights over an alley. The developer renovating the Majestic Hotel between Sixth and Seventh streets on the Boardwalk made a similar request.
Other projects that have benefitted from air rights abandonment include the Bonita Beach on 81st Street and Breakers Hotel on Third Street.
This story appears in the Nov. 24, 2023, print edition of the OC Today.
