I have criticized the Mayor & City Council (M&CC) of Ocean City for the way they handled the Pier Franchise ordinance.
They negotiated the repeal and replacement of the previous ordinance over an 18-month period, all behind closed doors, leaving the public completely out of the process.
Maryland’s Open Meetings Compliance Board found multiple violations of the Opens Meetings Act, and has advised the City Council of those many violations in a scathing Opinion issued on June 3, 2020.
In addition to the way the City Council secretly negotiated the revised pier franchise agreement, I have questioned the financial compensation in the fee structure paid to the town as a result of the new deal.
Upon learning of the new ordinance, I questioned whether the town is being adequately compensated for the pier franchise.
Earlier on, I suggested that an independent audit and an independent appraisal be conducted to determine the true value of the franchise. Had the pier franchise been put out to bid, we would have learned what open market competition would have garnered for the town. The M&CC ignored my suggestions.
The new ordinance changed the terms of the remaining 10 years of the original 50 year agreement set to expire in 2029. It further added at least 25 years to the previous term.
During the first nine years of the new agreement the franchisee pays $1,900,000. There was an initial fee of $1,000,000 to be paid in March of 2020, followed by an annual fee of $100,000 due on March 31, 2020 through March 31, 2028.
Spread over the initial nine years, this amounts to the equivalent of a fee of $211,111.11 per year.
Now, compare the average annual fee of the pier franchise for the first nine years to the beach equipment rental franchise fees.
In 2020, 11 beach parcel operators paid the town a combined $1,318,493 in beach parcel fees to operate approximately four months in the summer.
The beach photographer franchisee pays $228,750.02 each summer during the current franchise agreement. Something is out of sorts.
The current City Council created this inequity. Perhaps, the voters of Ocean City will see the need for change.
Vincent dePaul Gisriel Jr.