Old Orchard Beach considers ordinance for hotel to condominium conversions

OLD ORCHARD BEACH — The town is considering an ordinance that would govern the conversion of hotel buildings to lodging condominium buildings.

A hotel/motel to lodging condominium conversion takes place when a hotel operated by a single building owner is split so that units in the building are sold and owned as separate properties in a condominium-style arrangement. Units in a lodging condominium can be occupied by owners or used by short-term or long-term renters.

The number of hotels converted to lodging condominiums in town has increased over the years, said Town Planner Jeffrey Hinderliter at Tuesday night’s Town Council meeting. He estimated that in the past few years there have been six such conversions, compared to one in the twenty years prior.

The increase of these conversions has raised concerns from town staff, who say the town does not have adequate authority to review the conversions. Lodging units have different zoning and code requirements than dwelling units, and when a hotel is turned over to a lodging condominium arrangement, town staff is currently unable to review whether there is adequate parking, if small former hotel rooms are big enough for long-term housing, whether the infrastructure can handle an increase in sewer use, and if there are any potential impacts to abutters.

 There are “minimal to zero zoning standards” in place for this type of situation, said Hinderliter, and someone who purchases a former hotel and divides it into condos can get “an extremely high density” of units with little municipal regulation and with no analysis to impact on the town.

The Town Council in November put a 180-day moratorium on hotel/motel to lodging condominium conversions to allow the town time to create an ordinance to govern this practice.

Hinderliter presented a proposed ordinance to the Town Council on Tuesday at a public hearing.

Under the proposed ordinance, hotel to lodging condominium conversion plans would have to go to the planning board for review and would have to meet specific requirements. Except for one management unit, all units would have to be available for rental 305 days a year, with the owner occupying it no more than 60 days a year. Guests cannot stay in a unit for more than 30 days.

Buildings that have undergone a hotel to condominium conversion prior to the moratorium would be grandfathered.

Hotel buildings, under the proposal, could also be converted to year-round dwelling buildings, and would have to meet current town standards for multi-unit residential buildings.

Town Councilor Shawn O’Neill said the Town Council needed time to review and discuss the proposed ordinance, which was scheduled to be voted on at the next Council meeting.

“This is a big step for the town,” he said.

The Town Council will hold a workshop prior to the May 16 Town Council meeting. Information on the workshop will be posted on the town website.

Publisher Liz Gotthelf can be reached at newsdesk@sacobaynews.com.