Heron Park property price awaits update of appraisal

By Greg Ellison

(March 3, 2022) Based on concerns aired by a host of residents, the Berlin Town Council voted on Monday to seek updated appraisals for several Heron Park parcels before considering two offers to buy them.

After issuing a request for proposals (RFP) for parcels 57 and 410 in November, with parcel 191 added in December, Berlin has received development proposals from Gillis Gilkerson and Natelli Communities.

While the Gillis Gilkerson pitch would include commercial and passive uses, the plan from Natelli Communities focused principally on housing.

Both million dollar-plus offers would fall short of clearing the more than $2 million dollar debt service Berlin wants to eliminate.

Berlin bought the land, which was the site of the former Tyson poultry plant on Old Ocean City Boulevard, for roughly $2.5 million in 2016 from Berlin Properties North, which counts Councilman Troy Purnell among its ownership.

Berlin is paying $200,000 annually through 2045 to clear that debt.

Gillis Gilkerson is offering to pay $1.5 million for the trio of parcels, with plans calling for an array of businesses, including eateries, offices and a garden center.

Gilkerson also accounts for parking and includes multi-purpose fields and a dog-friendly park area.

Lastly, Gilkerson has pledged to earmark at least two acres for Berlin to develop an amphitheater on site.

By contrast, Natelli Communities is proposing a housing development with 78 single-family homes and a 50,000 square foot commercial building at the front of the property.

Natelli Communities is offering $1.6 million for parcels 57 and 410, while also proposing to transfer five parcels it owns adjacent to Stephen Decatur Park valued at roughly $444,000.

Town Council mulled both offers on Monday during a public hearing that was initially slated for closed session.

Among the residents on hand was Gina Velong who asked if community access to open areas in Heron Park would be affected.

Tony Weeg, who opposed the housing plans, said Gillis Gilkerson has a strong track record for adaptive re-use projects.

“I think the project has the right spirit,” he said.

Ann Hillyer said other avenues should be explored before accepting either offer.

“There are options that would be good for a lot of people in town,” she said. “There is grant … and other money out there.”

Hillyer also noted the Natelli Communities offer would require the town to cover costs to remove existing structures above the $500,000 demolition grant it was awarded by Maryland Department of Housing and Community Development.

“Which proposal puts more burden on the town’s resources that will cost us money?” she asked.

Based on the current offers, Hillyer supported the Gilkerson plan.

“It would put less burden on town’s infrastructure, and they aren’t charging for demolition,” she said.

Town Administrator Jeff Fleetwood said both proposals were graded on metrics drafted in conjunction with Planning Director Dave Engelhart, Deputy Town Administrator Mary Bohlen and Public Works Director Jimmy Charles.

“The money offers were close,” he said. “We went back and forth on use and redevelopment [as] both had added incentives.”

Fleetwood highlighted the two-plus acres for a proposed amphitheater in the Gilkerson deal and the parcels near Stephen Decatur Park offered by Natelli Communities.

Kate Patton, who previously served on the Heron Park Advisory Committee, questioned potential future costs for the town.

“Just because the town has received proposals does not mean you have to accept either project at this time,” she said.

Patton said increased traffic would result if the housing plans were to proceed.

Berlin Planning Commission Vice-Chairman Ron Cascio said both the commercial and housing plans undervalue the property.

“The whole goal here is to get out of debt and neither one of these proposals do that,” he said.

Council member Jay Knerr also touched on debt service concerns.

“People think selling it will eliminate our debt,” he said.

Knerr said Berlin is on the hook for $2.4 million for the Heron Park property, with both proposals falling nearly a million dollars short of that figure.

Knerr said an additional sum of up to $500,000 could be added to debt service if existing structures used on site were replicated elsewhere.

“We also have to factor in the two buildings, one on 410 and one on 191, which would have to be rebuilt.

The buildings are currently used to house town-owned maintenance equipment, parts and machinery.

“That debt would be there for several years, it’s not just going to go away,” he said.

Cascio stressed the need to examine zoning at the site. At present, some of the land is zoned R-1 residential and some is zoned B-2 shopping districts.

“To just throw it out there to the public … without doing our homework and finding what the value of the property is to the town of Berlin, we would be remiss not to do that,” he said.

Cascio advised against accepting either offer at the moment.

“We should just tap the brakes and downshift a little,” he said. “Look at what both of those offer and see if we can come up with something a little better for the people of Berlin.”

In response to the comments from the council and the audience, both developers, Palmer Gillis and Tom Natelli, addressed all those present.

Gillis, who noted the proposals are “dramatically different,” said development plans have been in the works since last summer.

Gillis professed hesitation over demolishing existing structures on site.

“As a  local builder, we did a lot of the construction work at that building,” he said.

“I don’t want to tear a lot of it down [because] there is so much value there that can repurposed, recycled and reused.”

Natelli said feedback was welcomed to determine what plans best suit the community.

“What we’re putting forward is a conceptual site plan,” he said. “It’s not set in stone.”

While acknowledging new housing would impact town services, Natelli said his goal is to retain Heron Park as a community asset.

“We are mainly residential master planners,” he said. “We put forward what we thought was a concept base on what our company thrives at.”

Gillis, who said his company’s plan would retain 40 acres of the roughly 60 acre site for park areas, also noted land values are relative.

“Market value is what someone is willing to pay,” he said.

Council member Troy Purnell recommended obtaining up-to-date appraisals for parcels 57,410 and 191, with a subsequent suggestion from Gillis to also include the remaining 40-odd acres.

Fleetwood said although property appraisals typically take up to two months to be completed, that time might be significantly reduced since the town had the site recently valued.

Mayor Zack Tyndall said discussions could be revisited during the Town Council meeting on March 28.

“We do need to settle in on some kind of decision,” he said.