OCEAN CITY — The Ocean City Planning Board voted unanimously Wednesday to grant a two-year extension on preliminary approval for a new 35-unit hotel on Eighth Street.
As proposed, the project would include The Pavilion Motel and two adjacent properties. But do not expect construction to start soon as the project still requires final site plan approval.
“The hotel project is still on hold, which is why they asked for an extension,” said Daniel Young, an attorney who represented the former owner in the application process and who represented the new owners in this matter. “Given the circumstances of the last year and a half, there’s no immediate intent to start.”
The Planning Board granted preliminary approval to the project in 2018, including the existing motel at 801 Atlantic Ave., an adjacent property at 811 Atlantic that is home to the Fountain View Motel and a third property at 819 Moorlyn Terrace, a multi-unit building that operates as a rental apartment building known as the Moorlyn Pool apartments.
The Pavilion dates from the early 1960s. It was long owned by the Capizzi family and was sold in 2017. The current owners purchased the property in January 2020. Brothers Raj Khatiwala and Yogi Khatiwala, who Young said live in Atlantic County, operate the properties as First Knight LLC.
According to Ocean City’s tax assessment, The Pavilion is valued at just over $5 million, while the Fountain View comes in at $1.56 million and $821,500 for 819 Moorlyn Terrace.
According to published reports, the brothers have also purchased The Forum across the street at 800 Atlantic Ave., another longstanding Ocean City motel. That sale took place in 2019.
The plans call for all three to be demolished to make way for a four-story luxury hotel.
There was little discussion about the proposal among Planning Board members and no one from the public commented.
“This is a very straightforward and simple application,” Young told the board at the meeting, held remotely. City planner Randy Scheule said the proposed project is in the city’s hospitality zone.
“We have no objections to the extension,” he said.
Ocean City has already seen an increase in the number of hotel rooms recently. The new owners of The Impala at 10th Street and Ocean Avenue have completed a new boutique hotel across the street, known as Impala Suites, and in May, the Planning Board granted final site plan approval for a 111-room hotel at 1101 Ocean Ave., across from the historic Flanders Hotel.
To be known as Soleil Resort, the proposal is one of the largest projects proposed in the resort for decades on a property that now serves as the parking lot for The Flanders.