Ocean City will not buy office building for police headquarters

Ocean City announced Tuesday that it will not pursue the purchase of a century-old landmark office building to serve as the new police department headquarters.

Just last Thursday, City Council introduced a bond ordinance to possibly buy the former Crown Bank building at 801 Asbury Ave. for $12.6 million pending an analysis of the building’s structural integrity and renovation costs.

However, after completing an extensive due diligence of the building, Mayor Jay Gillian and Council have determined “it is not in the best interests of the city to move forward with the purchase of 801 Asbury,” the city announced.

“We’ll always consider any opportunity to save taxpayers money, and we’ll always do our fact-finding before making any decision. In this case, the estimated costs to properly renovate the building make the purchase inadvisable,” the mayor and City Council President Terry Crowley Jr. said in a joint statement.

Currently, the city leases two floors of the former Crown Bank building for the police department’s administrative operations. City officials discussed the possibility of acquiring the entire building to serve as the police department’s new headquarters, but now say it would be too expensive to renovate it.

“While the building will serve adequately for a temporary home to the department, the apparent scope of known work and associated costs to properly renovate the building for the long term make this acquisition uneconomical. In addition, there remain further unknown concerns relative to the facility that make the acquisition impracticable,” the city said in the statement.

Plans to possibly buy the former Crown Bank building represented the latest twist in a long-running saga to replace the city’s antiquated Public Safety Building, a former school dating to the late 1800s.

Until attention shifted recently to the former Crown Bank building, the city had been discussing plans to expand and modernize the Public Safety Building at an estimated cost of $30 million to $35 million.

City officials had initially hoped that the former Crown Bank building would represent a far more economically viable alternative that would save local taxpayers millions of dollars.

With the Crown Bank building no longer an option, the city will now likely move forward with plans to build a new police headquarters instead of trying to modernize the Public safety Building or renovating another facility, Crowley said.

“I think that building a new state-of-the-art facility is the way to go rather than renovating a 100-year-old building,” he said in an interview.

Crowley explained that a new police headquarters could possibly be built on the site of the existing Public Safety Building or on city-owned property across the street directly behind City Hall.

    The city is dropping its plans to renovate the old Public Safety Building at an estimated cost of $30 million to $35 million.
  

Ocean City will consult with officials in Vineland and Cape May to discuss the best way to undertake the construction of a new police headquarters, Crowley said. Vineland recently completed building its new police headquarters and Cape May is preparing to start construction on its facility.

“We’re going to look at both of those plans to gather best practices,” Crowley said of Vineland and Cape May’s police headquarters.

In a separate project, Ocean City is constructing a new $6.1 million police substation at Eighth Street and the Boardwalk. The substation will give the police department a bigger presence on the Boardwalk when the project is completed this fall.

In 2023, the city developed plans for police department facilities that involved construction of the substation at Eighth Street and the Boardwalk and a renovation/addition to the existing Public Safety Building on the 800 block of Central Avenue.

The plans changed recently for the city to look into the possibility of buying the Crown Bank building for the police department instead of renovating the Public Safety building.

“I think what we’ve all learned is just how challenging it is to renovate a 100-year-old building in this city,” Crowley said.

The six-story former Crown Bank building dates to 1925 and is an iconic structure in the center of Ocean City’s downtown retail district. It consists of five floors and a mezzanine area.

The first floor of the building currently functions as a retail complex known as The Shoppes at Asbury, while the upper floors are office space. The building’s current owner, the real estate investment firm Eclat Investments, has its corporate office on the sixth floor.

Twin brothers Raj and Yogi Khatiwala, who head Eclat Investments, purchased the former Crown Bank building and the adjacent parking lots in 2023 for nearly $6.7 million to save the then-financially troubled property from a bankruptcy auction.

Last year, the city spent $3.3 million to buy two parking lots from the Khatiwala brothers that were part of the former Crown Bank building property. The city has been acquiring property on the block of Eighth Street and Central Avenue, just behind City Hall, to create more parking for the downtown.

    Two parking lots were acquired in 2024 by the city behind the former Crown Bank building, seen in the background.
  

The city’s proposed $12.6 million purchase of the building would have included a parking lot next door offering 50 spaces. Raj Khatiwala said the building’s purchase initially appeared to be the “most economical solution for taxpayers” when compared to the estimated $30 million to $35 million renovation cost for the Public Safety Building.

“We initially agreed with the City's assessment that acquiring the Crown Bank building was the most economical solution for taxpayers. This was based on a comparison between a $35 million renovation and a $12 million acquisition, which would have also provided 50 much-needed parking spots downtown,” he said in a statement.

“The $23 million in potential savings could have been allocated to other initiatives that would greatly benefit Ocean City residents and businesses, such as Boardwalk repairs, beach replenishment, school revamps or flood mitigation,” he added in the statement.

Now that a deal with the city is off the table, Eclat looks forward to reviewing “more beneficial and cost-effective proposals” for the building, Khatiwala noted.

He indicated that Eclat would continue to use the former Crown Bank building as its corporate headquarters, as well as for The Shoppes at Asbury, if it was unable to reach an agreement with the city on a sale.

“Despite this decision, we are very excited to continue supporting all the small businesses in our building and throughout town, and to maintain our strong relationship with the Police Department and the City,” he said in his statement.