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Developers of a planned Margaritaville Resort hotel and conference center at the former Phillips Beach Plaza hotel aim to replace a city-owned alley between 13th and 14th streets with a large easement that will run underneath of a parking garage. A discussion with the mayor and council about plans to abandon the alley was removed from a work session agenda this week, but the matter is expected to come back up in a couple of weeks.

Ocean City Council members will have to wait another two weeks to discuss the abandonment of an alley to make way for a massive hotel project at the former Philips Beach Plaza property.

The project, slated for the former hotel at 13th and 14th streets, is marketed as a 13-story, 265-room Margaritaville Resort complete with conference space, high-end restaurants, boutique retail space and multiple pools.

Plans are in the beginning stages, and one sticking point has been the existence of a 16-foot, city-owned alley, known as Washington Lane, that bisects the site. The developer wants to incorporate the throughway into the design of the complex, and needs the city to abandon it.

This week, council members were supposed to discuss the request in a work session, but it was pulled from the agenda at the eleventh hour.

Council President Matt James said he believes Hugh Cropper, the attorney representing the developer, needed more time to clear some information regarding the request and opted to pull it. James said he expects the matter will come back up at the city’s next work session, set Nov. 9.

The developer plans to incorporate the alley into the design of the complex in exchange for a 23-foot public replacement easement in the same spot with two travel lanes and one bicycle lane.

According to the staff report, city employees recommend that council members give the green light to discuss and vote on the abandonment at a future council meeting. The staff report said the city “has no direct need” for the right-of-way for utilities, and that the creation of a wider public easement “would improve the alley’s primary function as a public way.”

To move forward with the large hotel, developers need to establish a planned overlay district on the overall Beach Plaza property to rezone it. Without Washington Lane, the square footage of the developable area is 85,200. City code requires properties to be at least 90,000 square feet for combination into an overlay district, which is needed for rezoning. While the parcels cannot be combined if split by a street, an alley is fair game, and adding Washington Lane would exceed the 90,000 square-foot requirement.

Council members voted in late July to allow the developer to proceed with the application. Planning commissioners also weighed in on the proposal in early August with no objections.

This story appears in the print version of the Ocean City Today on Oct. 29.

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