Miami orders Virginia Key marinas operator to vacate
The City of Miami is ordering the operator to vacate the Rickenbacker Marina on Virginia Key.
It’s the latest move in a years-long controversy over who will run the city-owned site.
City commissioners took the action Sept. 13, with a plan to have city employees temporarily take over operations while they prepare to award a contract to a new private company to redevelop the marina and the nearby dry dock storage.
The commission voted 4-to-1 in directing City Attorney Victoria Mendez to immediately send a notice to Rickenbacker Marina Inc. demanding it vacate the premises. Commissioner Ken Russell voted no.
Two resolutions on the agenda that would award a new lease to Virginia Key LLC and call for an election to approve the new deal were deferred to Sept. 27.
Attorneys and representatives for Virginia Key LLC lobbied for the commission to make the award now and not to wait any longer.
Commissioner Joe Carollo was pushing for action, citing information given to the city that it was losing more than $90,000 a month in lease fees by allowing Rickenbacker Marina Inc. to continue to operate the city marina.
At one point in the contentious meeting, Mr. Carollo made a motion demanding Rickenbacker Marina Inc. to immediately make a $100,000 payment to cover lease losses for September, and to boost its monthly payments by $100,000 per month in following months. There was no second to the motion and no vote.
Mr. Carollo said he frankly doesn’t care who runs the marina as long as the city gets top dollar for the valuable waterfront property.
“We are being taken for chumps and I don’t like it,” he said.
Mr. Carollo later made the successful motion to order Rickenbacker Marina Inc. to vacate the property.
For more than three years, city officials have tried to get a new operator for what is known as Rickenbacker Marina and the adjacent Marine Stadium Marina, the dry dock operation.
Both parties – the City of Miami and Rickenbacker Marina Inc. – have been at odds over operations at the waterfront property, leading to litigation and a court settlement.
State records show Rickenbacker Marina Inc. as an active corporation and list Aabad Melwani as president.
The latest proposed resolution notes: “…by virtue of a Settlement entered into in the civil action styled as Rickenbacker Marina, Inc. v. City of Miami, Case No. 2013-021970 (CA 40), among other terms, conditions, and stipulations, the holdover tenant on the Property is allowed to remain there as a holdover tenant until the successful bidder/new tenant takes possession of the Property, after any and all objections to the bid award, including appeals, have been fully and finally resolved; and, whereas, this award will only become effective and may only be considered to have been made when all appeals of the denial of the bid protest have been fully and finally resolved, which is a condition precedent to the effectiveness of this contract award…”
The proposed resolution said the above actions and procedures “have been performed” and called for the awarding a new lease to Virginia Key LLC.
But Ms. Mendez strongly and repeatedly warned commissioners to wait and not make the award Sept. 13. Her contention is that all challenges and appeals have not been exhausted and to award the lease would give Virginia Key LLC vested rights. That would likely entangle the property in more muddied legal waters and the city would be fighting over the marinas in court for another long stretch of years, she said.
Al Dotson, an attorney for Virginia Key LLC, said the court challenges are over and there was no need to wait. He also said the company was willing to waive vested rights, based on confidence in its proposal to redevelop the marinas.
“They no longer have the right to appeal,” he said, and “I already waived those vested rights … the issue is no longer on the table.”
Ms. Mendez said the second-place bidder still had 30 days in which to ask for the right to file an appeal of a lower court decision with the Third District Court of Appeal, and continued to plead with commissioners to hold off on awarding the new lease.
Daniel Rotenberg, director of the city’s Department of Real Estate and Asset Management, said the city could take over operations at Rickenbacker Marina but would need 30 to 60 days to accomplish the move.
Mr. Carollo said he’s convinced the city can take over the marina in much less time.
The commissioner also complained about the settlement of the court case filed against the city by Rickenbacker Marina Inc.
“Our rights were taken away … they could play us for years and years to come,” said Mr. Carollo.
A request for proposals on the marinas launched in 2015 resulted in months of controversy and contention, ending with commissioners rejecting all bids and directing staff to start from scratch.
Commissioners also changed the process to handle bid protests in 2016, calling for all bid protests to be heard and decided by a special master.
The latest request for proposals saw two prior competitors unite – Virginia Key LLC is a joint venture of RCI group and Suntex Marinas that plans to invest more than $80 million to create Virginia Key Harbour & Marine Center.
A selection committee and former city manager Daniel Alfonso chose the partnership as top proposer.
The second-place bidder filed a bid protest that was heard by a special master who backed up the selection of Virginia Key LLC.
The second-ranked proposer appealed to the Eleventh Judicial Circuit. The court heard oral arguments and ultimately denied the second-ranked proposer’s petition on July 30, effectively upholding the hearing officer’s decision to affirm the city manager’s recommendation of the proposer, according to the newest resolutions presented to commissioners.
At the Sept. 13 meeting, Mr. Dotson told commissioners that the second-ranked proposer requested a rehearing for clarification, which was denied Sept. 11.
Another outstanding issue is the need for an election, as the lease of the waterfront property must be approved by city voters.
Even if the commission had awarded the property to Virginia Key LLC at the Sept. 13 meeting, it was too late to get proposals on the Nov. 6 general election ballot.
Unless the city held a special election, the next general election is a year way.
Mr. Carollo pushed the new company on this.
Mr. Dotson said the company is willing to pay for the special election, estimated to cost about $1.1 million.
Virginia Key LLC’s proposal includes 162 wet and 750 dry slips, parking for 630 vehicles under the dry stack storage, 24,000 square feet of commercial space for small retailers, and about 2,600 linear feet of landscaped baywalk.
The proposed lease would run 45 years with two 15-year renewal terms and payment of $2.2 million base rent annually plus 6% of revenues; additionally, the base rent would be adjusted annually by the greater of the Consumer Price Index or 3%. The lease could take effect only after the public’s vote of approval.
The company said projected revenues in the first 15 years would result in rent to the city of $60,479,022, plus about $5,962,971 in property taxes.