Friday, November 04, 2005

Transient Rentals - Update

I'm posting this letter, recently uploaded to the Key West Neighborhood Association newsgroup , here at The Real Key West in order to give it wider exposure. The letter is written to the Mayor and Commissioners just prior to their meeting this past Tuesday. Whether the letter was influential or not, the Commission did indeed postpone action on the Transient Rental Agreement, albeit for only one week. What action the Commission takes will give a strong indication of whether or not business as usual will be the order of the day.


November 2, 2005


To: The Mayor and Members of the City Commission

From: Daniel A. Nona, 1029 Fleming Street, Key West, FL, and on behalf of several Truman Annex and Old Town Homeowners


Re: The Truman Annex Settlement Agreement, An Unsettling Agreement


On behalf of several concerned residents of Truman Annex and Old Town, I respectfully request that the Truman Annex settlement agreement proposed by the City Commission just prior to the October election, be postponed further so as to permit full public review through workshops and a subsequent executive session. The impact of this proposed settlement is immense and will effect not only Truman Annex, but also, the entire City of Key West. Accordingly, the issue deserves thorough and focused study prior to any action. It is hoped that upon close review of the risks and benefits, the Commission, in its wisdom, will conclude that the proposed settlement is a bad deal for the City.

As we understand the proposed settlement, issues such as those below need to be considered:

**IS THE PROPOSED SETTLEMENT NECESSARY IN THE FIRST PLACE? The proposal attempts to avoid monetary settlements in three cases. In one, (Rollison v The City of Key West, Case No CAK-99-1467) the case is on appeal by the City with a counter-appeal by Rollison. The monetary damages may be as little as the $5000 bond already put up by the City, rather than the $117,000 awarded by the Court. In the unlikely event that Rollison prevails, the monetary award would be under $300,000. If not unlikely, it may be asked, why is Rollison and others involved in these cases so anxious to effect this settlement? While the multimillion-dollar award in the ?Duck Tour? case concerns the City, the amount of the award in not in the same ball park and is miniscule when the impact on the City?s affordable housing and residential integrity are taken into account. It should be noted that the Court?s finding for Rollison with respect to her ability to transient rent continues, with or without the settlement. The only remaining issue is the amount of the monetary damage, and given a review of the Court?s paring down of Rollison?s excessive monetary and legal fee claims, the City has a very good chance of prevailing on appeal.

Consider the second case, Behmke, et al v. The City of Key West, Case No 44-2005-CA-249-K. This lawsuit, essentially, piggybacks onto "Rollison". In this case, Behmke, et al. are all listed as owners of Shipyard Condominium properties (not the TAMPOA component). The case apparently rests at a point where the proverbial ugly stepsisters (plaintiffs) are to show that they can fit their big foot into Cinderella's (Rollison's) glass slipper. To document that similarly situated properties are involved, the City has asked for any non-transient occupational license from 1990 to the present, federal income tax records, any ledgers of rental income/expenses 1995 to present, and the warranty deed, closing statement and mortgage, if any, on the property. As of this date, the case records show NO RESPONSE.

The third case, Truman Annex Real Estate Co Inc v The City of Key West et al. Case No 2004-CA-967-K, includes a list of owners that includes not only Truman Annex, but also, owners at the Golf Course--not a part, of course, of Truman Annex. At this point, the judge hearing the case ruled that there was no basis for Behmke?s argument that ?violations of these provisions give rise to an action at law for money damages. Hence, that part of the suit seeking money damages was dismissed with prejudice. Behmke was given additional time to respond to reconsideration of this finding. No response is in the case file as of Sept 30, 2005, and Behmke has not appealed the decision.

**IS THE PROPOSED SETTLEMENT A GOOD DEAL FOR THE CITY OR JUST THE PLAINTIFFS? Our group clearly thinks the proposed settlement is not a good deal for the City. It seems to be a very good deal for the plaintiffs, witness their enthusiasm to settle, and to do so quickly. Issues of parity with Rollison for those living in Shipyard and/or TAMPOA, Truman Annex have already been addressed by the recent adoption of City ordinance Sec. 122-1372. Transient Living Accommodation's in Residential Dwellings?Truman Annex. Any similarly situated property may apply for a Truman Annex Residential Transient Rental Permit. The city commission enacted this ordinance in that it found that it is fair and reasonable to extend the Rollison ruling to other property owners in Truman Annex


**WHY, THEN, THE PROPOSED SETTLEMENT? This is a good question, and workshops and other public discussions may be able to uncover this mystery. Perhaps the "Duck Tour" and "Blue Paper" settlements have made the City an easy mark or risk avoidance outweighed good judgment. In any event, the terms and conditions of the settlement go way beyond what is necessary. The ability to transient rent (transient renting is often described benignly as vacation rentals, or weekly rentals, but are akin to hotel rentals, and can be daily or hourly) is in perpetuity for the plaintiffs, and 20 years for all others, including recent purchasers. All code enforcement proceedings underway are forgiven. Other provisions are equally curious and disadvantageous to the city, such as $1500 fee (current market value for a transient rental license is estimated at $40,000).

A previous attempt at making Truman Annex a hotel, utilizing a similar scheme, failed at the Planning Board Level, due to wide public outcry. As bad as that proposed ordinance be, it at least earmarked the transient rental license fees for affordable housing. This proposal earmarks such money raised by the license fees for the plaintiffs and their lawyers, save for that portion that the City may use within a defined time period to defend itself from FUTURE lawsuits on similar matters in Truman Annex. If the city is fortunate enough not to encounter any new lawsuits within the prescribed time period, the City?s portion of the license fee reverts as a windfall to the plaintiffs.


**WHY WOULD OLD TOWN, MID TOWN or NEW TOWN RESIDENTS CARE ABOUT WHAT HAPPENS AT TRUMAN ANNEX? Because of the metastasis of transient renting sure to come throughout the city, owing to the precedent of undermining the duly enacted, Transient Rental Ordinance. Others would invoke constitutional issues, such as equal protection, with a good chance of succeeding. There are many individuals more than ready to try to put their foot into the glass slipper. If concern exists about lawsuits at present, just wait.


**WILL THIS SETTLEMENT, IF APPROVED, END SIMILAR LAWSUITS? Of course not. This is not the settlement to end all lawsuits.. In fact, the proposed Truman Annex Settlement not only anticipates new and additional lawsuits on this matter, but BUDGETS, albeit inadequately, for them. Please refer to the proposed settlement section entitled: "Post-Settlement Litigants". So, if the settlement is ratified, be prepared for additional and UN-ending lawsuits from all sides.

Mr. Mayor and Commissioners please do not act on this proposed Settlement without due caution and public scrutiny. After all, the Transient Rental Ordinance in place was arduously achieved, going through the full ordinance-making procedures, approval by the DCA, and surviving legal challenges. It does not make sense to needlessly give away the common good that has come from this process. Thank you for your consideration of our concerns.

NOTE: I'm sorry for the random punctuation problems. If you see a question mark that is oddly placed, it's likely either a single or double quote mark.

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