(June 20, 2014) Despite being up and running, the Ocean City Brewing Company will be appearing before the City Council again in two weeks to try to improve its situation – with at least one major wrench thrown into an already contested process.
After having paid $32,299.40 in permitting and inspection fees to the city, the brewery was given its final certificate of occupancy inspection on Friday, June 6, by a city official who was alleged to have been intoxicated.
Ocean City Today has confirmed that an official, who will remain unnamed, has been suspended for returning to City Hall drunk on the day of the CO inspection.
The city does not typically disclose personnel issues, but in the current case, the incident stands to further aggravate the brewing company’s long-standing assertion that the city’s Byzantine zoning and building fee structure is a impediment to sustainable business growth.
“It’s not just the drunk inspector, it’s the layers and layers of restrictions they’ve put us through,” said brewery owner Josh Shores. “They’re almost impossible to figure out even if you’re sober.”
The brewery was issued a citation last week for violating one of the operating conditions issued to it by the City Council, which stipulates that the facility cannot store spent grain malt outside after brewing.
“My understanding is that the city manager came by and saw that we had moved our waste trailer outside for the farmer to come pick up,” Shores said. “The conditional use says we can’t store spent grain outside, but we have to bring it out of the building to get it hauled away. These restrictions that have been put on us are so vague, it’s just a matter of interpretation.”
City Manager David Recor did not respond to requests for comment on either the citations or the allegedly drunken inspection.
However, Recor did take time at Monday night’s council meeting to reassure officials that the brewery was operating legally until its case could be heard at the July 7 session.
“They have filed an amendment to revise two of the conditions, and that has already been heard by the planning board and will come to you shortly,” Recor said. “I believe there have been citations issued, but they do have a certificate of occupancy to operate in the building under the original conditions of approval.”
Although it is a so-called “conditional use,” which allows the commission and council to place restrictions on the operation to protect the surrounding neighborhood, brewing is a permitted activity in the “local commercial” or LC-1 zoning district that overlays the area.
But the conditions of approval handed down by the council earlier this year included a moratorium on having grain storage external to the current building, quashing the brewery’s plans to have a 30-foot silo placed in the parking lot. The council also prohibited any expansion to include canning or bottling.
The company returned to the Planning and Zoning Commission briefly thereafter to make the case that using a silo instead of bagged grain, and canning on-site rather than shipping beer out, would actually lower the brewery’s impact on neighborhood aesthetics and traffic.
The company argued, and the commission seemed to agree, that any objection by its neighbors regarding the brewery’s impact was less borne out of the specific nature of the operation and more out of the fact that the city, via its pyramidal zoning code, allows residential condos to be built in a commercial zone.
But even before the council has a final say on the request, an accounting requested by this newspaper revealed that the brewery operation has already put down $32,299.40 in payment to the city for the hearing and inspection process.
The largest cost is $9,680.00 in sewer impact fees to compensate for the brewery’s wastewater load, calculated at $220 per fixture.
In other cases, simply being heard comes with a cost: an appearance before the Board of Zoning Appeals runs $632, and two appearances before the Planning and Zoning Commission run $450 each, plus another $460 for hearing transcription.
With costs from the fire marshal and plumbing inspections, Shores said he expects his payments to the city to top $50,000 by the time he’s finished.
“It definitely hampers your growth starting out, especially with a more in-depth operation,” he said. “That’s money that could go toward better training, better equipment.”
The Planning and Zoning Department, as a whole, has only made back roughly 40 percent of its expenditures since 2008.
Total annual income to the city from permits peaked in 2005 at roughly $2.1 million, but has dropped rapidly since then to around $700,000 recently. Staff expenses continued to rise to a peak of around $1.9 million before the 2008 recession, but have since dropped back to around $1.6 million.
Despite the drop in revenue for the city, the number of zoning and building permits issued has actually risen gradually, but steadily, over the past 10 years from 1,500 per annum to nearly 2,000.
But the total value of the work being regulated dropped dramatically from a peak of more than $200 million in 2006 to around $40 million in 2009, a level at which it has remained, indicating that the city is seeing growth only in the lower strata of real estate projects.