Letter to Editor: City Lacks Transparency, Thinking on Bayside Project

I have recently criticized City Council and the city administration for lacking the skill set to competently tackle different projects. I have repeated this most recently at the last council meeting.

An article in the March 16 edition of The Press of Atlantic City reads in part, "Tom Gill said if it (10th and Palen) is deemed in need of rehabilitation, the city would be able to help finance the project, which is the key, because he said no bank would provide a loan for a property with such environmental problems."

I have attended the recent council meeting and at no time did Solicitor Dorothy McCrosson disclose this. It is another example of the administration not telling the truth by omission (remember her bank where she serves on the Board of Directors had a mortgage on the boardwalk parking lot that was purchased by Ocean City). 

Make no mistake, an attractive marina with a restaurant, gas and boat slips will be approved and return back to council, which is the desired result, but how to be financed is the only issue to really work on. I have implored council to take up this issue.

If no bank will finance this project, according to Mr. Gill, who is the "white knight," and the city therefore chooses to finance the project, then the city is not making a "loan" but an "equity advance." Why? Because if the City were to "lend" the funds, it could never foreclose (otherwise to be caught in the environmental chain of title) in the case of nonpayment, which is the second source of repayment.

It is not even clear yet what the cash flow (the primary source of repayment) would be from the project. As an equity advance, the return must be much greater for the city. What return? Should the City be making an "equity advance"? Clearly, a complicated issue that needs to be worked on immediately.

What other alternatives are there: 1) Lend to the Gills directly and have them
relend to the project (what collateral?); 2) Lend to Tackle Direct and have Tackle Direct relend to the project; or 3) Is there a part of the project that can be walled off from the environmental issues and be used as collateral?

This is why I have implored council and the administration to work on this issue immediately and not at the end and rush it through without proper analysis (read Ocean City Marina deal). My criticism is primarily with the executive branch, the administration, which is "running" the city. My criticism with council is they, as a group, lack the knowledge or the courage to speak up to hold the administration to account.

If council really wants to do the "people's work," then work the project backwards and forward. If the admistration really wants to do the "people's work," try being honest and tackle the only real issue on this matter. These symptoms are a recurring feature for those of us who pay attention.

Michael Hinchman
Ocean City