End of an Era: Ocean City McDonald’s to Close, What Comes Next?

The McDonald’s located at 900 West Avenue, a longtime fixture at the corner of Ninth Street and West Avenue, is set to close its doors permanently.

According to employees and reports circulating on social media, the restaurant’s final day of operation is expected to be Sunday, December 14. The closure marks a significant shift for one of the island’s most visible commercial corners, fueling immediate speculation about the site’s future.

While many residents are lamenting the loss of the island’s only drive-thru fast-food option, the local community is already looking ahead. The closing unlocks a massive parcel in the heart of the city’s primary entry corridor, presenting a development opportunity that could eclipse recent high-profile land deals. We reached out to our friends at OCNJHomes.com to learn more about the property’s options moving forward.

According to OCNJHomes.com, the immediate comparisons between the 900 West Avenue site and the troubled Seaspray Condominiums at 34th Street, which recently sold in the $5.5–$6 million range after being listed for $7 million.

While the two sites are comparable in physical footprint, the Seaspray lot is approximately 45,140sqft compared to the McDonald’s site at roughly 38,400 sqft; the development potential of the McDonald’s lot appears significantly higher due to favorable zoning.

The primary driver for the 900 West Avenue site’s premium valuation is its designation within the “Drive-In Business” (DB) Zone. Unlike the Seaspray site, which sits in the more restrictive “Gateway” Zone, the DB zone allows for a wide variety of commercial and mixed-use projects “by right.” Developers at the Seaspray site have faced significant hurdles, including strict variance requirements and complex rezoning negotiations to move their project forward.

In contrast, the McDonald’s site offers a much smoother path to development. The flexible zoning allows for:

• Broad Allowable Uses: A mix of retail, commercial, and potential mixed-use residential without the immediate need for complex rezoning.
• Fewer Hurdles: While some variances may still be required depending on the scope of the project, the “by right” allowances are far more generous than those at the 34th Street gateway.
• Scale: With a lot size nearly 3-4 times that of the former Republic Bank building lots, the site can accommodate a large-scale project that maximizes the highly visible location.

 Given the zoning flexibility and the sheer size of the lot, early market estimates suggest the McDonald’s site could command a price tag well above the Seaspray sale.

“The lack of hurdles compared to the Gateway zone is the key differentiator,” noted Pat Davish of OCNJHomes.com. “You are looking at a site that is slightly small than the Seaspray property but comes with significantly less red tape. Depending on the final concept, whether it’s mixed-use or commercial, this lot could likely see a valuation north of $8 million.”

The lot is currently owned by McDonald’s Real Estate Company, the real estate arm of McDonald’s corporate, who purchased it in 2014 for $2 million. Under their standard business model, the corporate entity owns the land and building, leasing them back to the franchisee.  As of now, the there is no definitive answer as to why the location is closing.  When the city reached out for comment, McDonald’s declined. With the company in process of temporarily closing other area locations for renovations, it is believed that the Ocean City building is in need of extensive renovations. It appears that McDonald’s Real Estate Company has decided to not invest in a new lease because of this.

As the 9th Street corridor continues to modernize, the redevelopment of 900 West Avenue will likely serve as a new anchor for the downtown entry, potentially transforming the first impression of “America’s Greatest Family Resort.”