The Issue The issue is whether Islamorada Ordinance 01-05, which amended Policy 1-2.4.7 of Islamorada's comprehensive plan, is in compliance, as provided by Chapter 163, Part II, Florida Statutes.
Findings Of Fact Respondent Islamorada, Village of Islands (Islamorada), was incorporated on December 31, 1997. At the time of its incorporation, the Monroe County comprehensive plan applied to requests for development orders in the jurisdiction of Islamorada. After conducting a number of public hearings and workshops, Islamorada adopted its initial comprehensive plan by Ordinance 00-09 on January 24, 2001 (Plan). On March 15, 2001, Respondent Department of Community Affairs (DCA) published its Notice of Intent to Find the Islamorada Comprehensive Plan not in compliance with Chapter 163, Part II, Florida Statutes, which is the Local Government Comprehensive Planning Act (Act). DCA commenced Department of Community Affairs v. Islamorada, Village of Islands, DOAH Case No. 01-1216GM, to challenge the Plan. As the only parties to DOAH Case No. 01-1216GM, DCA and Islamorada entered into a Stipulated Settlement Agreement, under which Islamorada agreed to adopt certain remedial amendments. Consequently, on April 26, 2001, Islamorada adopted Ordinance 01-05, which contained the remedial amendments. On May 24, 2001, DCA published its Notice of Intent to Find the Comprehensive Plans and Remedial Comprehensive Plan Amendments in compliance with the Act. Consequently, on June 6, 2001, the Administrative Law Judge issued an Order Closing File in DOAH Case No. 01-1216GM. On the same day, Petitioner filed his Petition, which alleges that Policies 1-2.4.7 and 1-2.1.0 are not supported by data and analysis. Ordinance 01-05 did not change Policy 1-2.1.0. For the reasons noted in the Conclusions of Law, Petitioner therefore is unable to challenge Policy 1-2.1.0. With deletions stricken through and additions underlined, Ordinance 01-05 revised Policy 1-2.4.7 as follows: Policy 1-2.4.7: Limit Transient Rental Use of Residential Properties. Islamorada, Village of Islands shall continue to prohibit the transient rental use of 28 days or less, of residential properties within the Village, including properties located within the Residential Conservation (RC), Residential Low (RL), Residential Medium (RM), and Mixed Use (MU) Future Land Use categories, except in tourist commercial Zoning Districts as provided for under Policy 1-2.10 of this Plan. Transient rental use may be allowed continue in multi- family developments with 24-hour on-site security, excluding mobile home parks, in the Residential High (RH) FLUM categories based on an existing use as of May 1, 1999, upon a majority approval of all property owners within a mandatory owner association organized under Florida law, pursuant to the association requirements, and compliance with all applicable State regulations and Village codes. Property owners located in the RL, RM, RC and MU future land use categories with valid transient rental licenses as of May 1, 1999 will have until May 1, 2003 to cease rentals of 28 days or less. Owners of such properties shall register with the Village and shall demonstrate to the Village that: The transient use of 28 days or less of the property in question was existing as of May 1, 1999, and continues to exist; All State and local licenses necessary for the conduct of transient rental use of the property have been secured; and All impact fees have been paid. Property owners permitted transient rental use pursuant to this Policy shall lose their privileges and retire their licenses prior to May 2, 2003 upon: Transfer of ownership of the property at which the transient rental activity takes place; or A combination of two of the any of the following being recorded: Code Violations as determined by the Hearing Officer and/9or Sheriffs Field Contacts and/or substantiated written letters of complaint from neighbors submitted and on record with the Village. the property being determined by nonappealable Final Order on more than two (2) occasions to have violated the Village Code. After Islamorada adopted Ordinance 01-05, Petitioner filed his petition challenging Policy 1-2.4.7. After Petitioner filed his petition, Islamorada adopted Ordinance 01-11, which repealed the amendments contained in Ordinance 01-05 and restored Policy 1-2.4.7 to its original form. However, Islamorada adopted Ordinance 01-11 on July 24, 2001--three weeks prior to the start of the hearing in this case. DCA had not yet issued a notice of intent, and the amended plan language was therefore largely irrelevant in this case. For the same reasons, as explained in the Conclusions of Law, that Petitioner may not challenge Policy 1-2.1.10, he may not challenge Policy 1-2.4.7; Petitioner's challenge is limited to the revisions contained in Ordinance 01-05. The revisions contained in Ordinance 01-05 relax the restrictions governing transient rentals, as contained in the original Plan. In its original form, Policy 1-2.4.7 required the cessation of transient rentals not in compliance with the policy by the earliest of: a) May 1, 2003, b) the conveyance of the rental property, or c) a combination of two Code violations or verified neighborhood complaints. The revisions eliminate the conveyance as an event terminating the right to enter into transient rentals, so, after the adoption of Ordinance 01-05, affected property owners could convey residences without depriving their grantees of the right to make transient rentals prior to May 1, 2003. The revisions also eliminate verified neighborhood complaints as a basis for the loss, prior to May 1, 2003, of the right of affected property owners to make transient rentals prior to May 1, 2003. The ruling that Petitioner may not challenge Policy 1-2.4.7 in its original form moots Petitioner's case. It is evident that Petitioner does not oppose the relaxation of restrictions on transient rentals, as achieved by Ordinance 01-05. In any event, data and analysis amply support the decision of Islamorada to relax the restrictions that it had imposed upon transient rentals. Neighborhood complaints supply a nebulous standard, and substantiation of such complaints, without defining the extent of verification, provides little more guidance. Legal counsel supported the elimination of the restriction on conveyances. Given the close proximity of the ultimate compliance deadline, the restriction on conveyances probably did not substantially affect the market value of affected properties, so Islamorada could find data and analysis supporting the inclusion or exclusion of this condition shortening the timeframe for compliance upon the sale of an affected residence. Even if Petitioner had timely challenged Policy 1-2.4.7, in its original form, data and analysis support the planning decision of Islamorada to restrict transient rentals. Transient rentals in residential neighborhoods facilitate a constant churning of home occupants. To the extent that this process displaces longer-term occupancy, transient rentals impede the process by which neighborhoods and communities form and residents in these neighborhoods and communities connect with each other. The commodification of neighborhoods in the service of tourism provides positive economic development to those property owners seeking to make transient rentals. However, to some extent, these economic gains are offset by those residents who wish to sustain less economically intense lifestyles. The desires of such residents may be ill-served by local merchants who price their goods to the more economically intense lifestyle of the tourist or by the replacement of more prosaic retailers, such as hardware stores, with the more ephemeral retailers, such as t-shirt stores. To find support in data and analysis, the community envisioned by Islamorada in its Plan is not required to achieve the highest and best use for the greatest number of owners of property or the owners of the greatest area of property within the village's planning jurisdiction. On this record, data and analysis clearly support the planning decision initially made by Islamorada in adopting Policy 1-2.4.7, as well as the planning decision later made by Islamorada in relaxing the restrictions contained in this policy.
Recommendation It is RECOMMENDED that the Department of Community Affairs enter a final order dismissing Petitioner's challenge to Ordinance 01-05 and finding the amendments contained in the ordinance to be in compliance with Chapter 163, Part II, Florida Statutes. DONE AND ENTERED this 16th day of November, 2001, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of November, 2001. COPIES FURNISHED: Steven M. Seibert Secretary Department of Community Affairs 2555 Shumard Oak Boulevard, Suite 100 Tallahassee, Florida 32399-2100 Cari L. Roth General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard, Suite 325 Tallahassee, Florida 32399-2100 Charles Rossignol 253 Tollgate Boulevard Islamorada, Florida 33036 Nancy Stroud Weiss Serota Helfman Pastoriza & Guedes, P.A. 3107 Stirling Road, Suite 300 Fort Lauderdale, Florida 33312 David L. Jordan Deputy General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 John R. Herin, Jr. Weiss, Serota, Helfman, Pastoriza & Guedes 2665 South Bayshore Drive Suite 420 Miami, Florida 33133
The Issue The issue to be determined in this case is whether the City of St. Augustine’s proposed amendment to its Comprehensive Plan, adopted via Ordinance 2015-03, is “in compliance,” as that term is defined in section 163.3184(1)(b), Florida Statutes (2014).
Findings Of Fact Petitioner is an individual who owns property and resides in the City near the property that is the subject of the proposed amendment. Respondent City of St. Augustine is a municipality in St. Johns County, which has adopted a comprehensive plan pursuant to chapter 163, which it amends from time to time. Intervenor St. Augustine Lighthouse and Museum, Inc., is a not-for-profit Florida corporation, which owns approximately 6.5 acres of property located at 100 Red Cox Drive, St. Augustine, upon which the historic St. Augustine Light Station is located. St. Johns County, which previously owned the lighthouse property, conveyed the property to Intervenor in 2014. The lighthouse property was zoned “Government Use” while the County owned the property, which is a zoning category that requires government ownership. When the property was conveyed to Intervenor, it became “non-conforming” because it is now privately owned. Under the City’s Land Development Code, additions, modifications, reconstruction, and repairs of non-conforming structures and uses are restricted. These restrictions are an inconvenience and impediment to the periodic reconstructions and repairs required to maintain and improve the lighthouse tower and its associated historic structures. To remove the non-conforming status of the lighthouse property, Intervenor considered various options for rezoning the property. The best zoning district match was determined to be “Maritime Use” because it included “maritime museum” among the allowed uses. The Maritime Use zoning district is listed as an implementing zoning district under the future land use designation Medium Density Residential Mixed Use in the Comp Plan. Therefore, Intervenor applied for a small-scale (under ten acres) comprehensive plan amendment to amend the FLUM to change the land use designation for the lighthouse property from Recreation/Open Lands to Medium Density Residential Mixed Use. The amendment includes a number of special limitations that restrict the kind of development that can occur on the lighthouse property, including: (a) limiting the use of the property to maritime museum; (b) maximum 20 percent lot coverage; maximum individual building footprint of 7,500 square feet; large building setbacks, including setbacks of up to 190 feet to protect the Maritime Hammock in the southwestern corner of the property and a 120-foot-deep “viewshed” in front of the lighthouse tower; (e) review of any development proposal by the State Historical Preservation Officer (SHPO) and finding of “no adverse effect” by the SHPO as a condition precedent to any City development approval; and (f) a reverter of title to the County if Intervenor ceases to use the property for historic preservation. Petitioner expressed concern about the number of properties in his neighborhood that are still on septic tanks. However, whether the City should extend its sewer lines to serve Petitioner’s property is an issue that is irrelevant to the validity of the proposed amendment. To the extent Petitioner attempted to tie the existing septic tanks to the issue of whether the proposed amendment is consistent with public infrastructure provisions of the Comp Plan, he failed to show an inconsistency. The lighthouse property is already served by the City’s wastewater system. Furthermore, the proposed amendment would reduce the uses allowed under the existing land use designation for the lighthouse property, which reduces potential future demand on the wastewater system. Petitioner is also concerned about the lack of sidewalks, “traffic controls,” and stormwater management capacity. However, Petitioner did not demonstrate that the proposed amendment increases the need for sidewalks, traffic controls, and stormwater management. The more persuasive evidence shows the opposite, that the proposed amendment and its development restrictions reduce the need. For example, the proposed amendment eliminates residential densities allowed under the current FLUM designation. There is parking provided on the lighthouse property and visitors to the lighthouse are not allowed to park on adjacent streets. Signage at the lighthouse property directs departing visitors away from Petitioner’s neighborhood and the nearby elementary school. As an educational exhibit on the lighthouse property, small traditional wooden boats have been built by volunteer craftsmen using only hand tools. Petitioner contends this is an industrial use, which is not allowed under the proposed land use designation. However, construction by handcraft in this manner is not an industrial activity. It is an appropriate use in conjunction with a maritime museum.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Economic Opportunity enter a Final Order determining that the City of St. Augustine Plan Amendment 2015-03 is in compliance. DONE AND ENTERED this 16th day of July, 2015, in Tallahassee, Leon County, Florida. S BRAM D. E. CANTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of July, 2015. COPIES FURNISHED: Edward Ruben Anderson 60 Magnolia Drive St. Augustine, Florida 32080 (eServed) Ralf G. Brookes, Esquire Ralf Brookes Attorney 1217 East Cape Coral Parkway, Suite 107 Cape Coral, Florida 33904 (eServed) Sidney F. Ansbacher, Esquire Upchurch, Bailey and Upchurch, P.A. 780 North Ponce de Leon Boulevard St. Augustine, Florida 32084 (eServed) Jesse Panuccio, Executive Director Department of Economic Opportunity Caldwell Building 107 East Madison Street Tallahassee, Florida 32399-4128 (eServed) Robert N. Sechen, General Counsel Department of Economic Opportunity Caldwell Building, MSC 110 107 East Madison Street Tallahassee, Florida 32399-4128 (eServed) Katie Zimmer, Agency Clerk Department of Economic Opportunity Caldwell Building 107 East Madison Street Tallahassee, Florida 32399-4128 (eServed)
The Issue Whether Respondent, while serving as an appointed member of the Ocoee Planning and Zoning Commission, violated section 112.313(7)(a), Florida Statutes (2015)1/ by having a contractual relationship that conflicted with his official responsibilities; and, if so, the appropriate penalty.
Findings Of Fact At all times material to the complaint, Respondent served as an appointed member of the Ocoee P & Z Commission. Respondent is subject to the requirements of part III, chapter 112, Florida Statutes, the Code of Ethics for Public Officers and Employees, for his acts and omissions during his tenure on the P & Z Commission. As a member of the P & Z Commission, Respondent is subject to the “Ocoee Florida Land Development Code, Section 3, Planning and Zoning Commission [Land Development Code].” Section 3-2 of Land Development Code provides in part as follows: Establishment and Membership The Planning and Zoning Commission shall consist of nine (9) members appointed by the City Commission and one member appointed by the School Board of Orange County as a non- voting member. The member appointed by the School Board of Orange County shall attend those meetings at which the Planning and Zoning Commission considers comprehensive plan amendments and rezonings that would, if approved, increase residential density on the property that is the subject of the application. No member shall be an employee of the City of Ocoee and all members, except the member appointed by the School Board of Orange County, shall be residents of the City of Ocoee. When selecting members to the Planning and Zoning Commission, the City Commission shall attempt to select persons from different geographical areas within the City so as to create geographical diversity and representation. * * * E. Compliance with Laws The Planning and Zoning Commission, and its individual members, shall comply with all applicable laws relative to public bodies, including disclosure of interests and procedure[s] for refraining from participation [when] a conflict of interest exists. * * * G. Duties and Responsibilities To act as the Local Planning Agency (LPA) of the City of Ocoee, pursuant to Section 163.3174, Florida Statutes, and to prepare on its own initiative recommendations for amendments to the Comprehensive Plan of the City of Ocoee, including text and/or maps, and to forward such amendments to the City Commission for consideration. No such recommendation shall be made except after a public hearing held in accordance with State and local requirements. To review and make recommendations to the City Commission on applications for amendments to the Comprehensive Plan. No such recommendation shall be made except after a public hearing held in accordance with State and local requirements. To prepare on its own initiative recommendations for amendments to this Code, text and/or maps, and to forward such amendments to the City Commission for consideration. No such recommendation shall be made except after a public hearing held in accordance with State and local requirements. To review and make recommendations to the City Commission on applications for amendments to this Code, including applications for annexation or change of zoning. Pursuant to Section 163.3174(4)(c), Florida Statutes, the Planning and Zoning Commission shall also have the responsibility to review and make a finding as to the consistency of the proposed land development regulation with the adopted Comprehensive Plan and to report such finding to the City Commission. No such recommendation shall be made except after a public hearing held in accordance with State and local requirements. To review and make recommendations to the City Commission on applications for various development approvals or permits as provided within this Code, including, but not limited to Planned Unit Developments (PUD), special exceptions, subdivisions, and any other application for which the City Commission requests a report and/or recommendation. Where a public hearing is required by the applicable procedural section, no such recommendation shall be made except after a public hearing held in accordance with State and local requirements. To act in an advisory capacity to the City Commission on land use and land development issues and to make such studies and to conduct such investigations as may be requested from time to time by the City Commission. To review zoning of newly annexed lands when it represents an increase in intensity of use or a conflict with the Comprehensive Plan pursuant to requirements of State law and City ordinance. In addition to serving on the P & Z Commission, Respondent buys and sells commercial real estate. Respondent is a manager and shareholder in W.O.R.Y. INVESTORS, LLC (WORY), an entity that is also in the business of buying and selling commercial real estate. Respondent, in his individual capacity, owned approximately four acres, which abutted six acres owned by WORY. Both properties have an address on West Road in Ocoee, Florida, and will be referred to collectively herein as the “West Road property.” The Contract On or about November 11, 2015, Respondent, in his individual capacity, and as manager for WORY, executed an “Agreement of Sale” wherein the West Road property was to be purchased by Charter Schools Development Group, LLC (buyer), for $1,890,540. According to the Agreement of Sale, the buyer wanted to “develop and construct on the Property a K-8 public charter school.” The Agreement of Sale contained a number of contingencies, referred to in the contract as “Buyer Required Approvals,” that Respondent was required to satisfy prior to finalization of the sale of the West Road property. Paragraph six of the Agreement to Sale sets forth a number of the pre-sale contingencies imposed on Respondent, and the same provides as follows: 6. Development The Buyer intends to develop and construct on the Property a K-8 public charter school and adjacent commercial development acceptable to Buyer consisting of buildings and other improvements including, but not limited to recreation fields, related landscaping, open space, storm water, and appropriate parking (the "Project"). Buyer's obligation to complete the purchase of the Property from Seller in accordance with the terms of this Agreement is contingent upon the satisfaction of each of the following conditions with regard to the Property (each of which may be waived in whole or in part in writing by Buyer): Buyer has obtained final, unappealed and unappealable approvals from all necessary governmental authorities (including governmental agencies), for zoning, utilities and any other approvals (including necessary parking requirements) Buyer deems necessary, in its sole discretion, permitting the construction and use of the improvements comprising the Project, including but not limited to any required special exception. Buyer has obtained final, unappealed and unappealable approvals and/or permits required by any and all governmental authorities (including governmental agencies) so that the Property shall have immediate and adequate access to water, sewer and all other utilities in accordance with the final approved site development plan. Buyer has obtained final, unappealed and unappealable approvals and/or permits required by any and all governmental authorities (including governmental agencies) for storm water management; including easements and agreements for constructing and maintaining storm water basins; all wetlands studies and approvals in such form that wetlands, if any, shall not preclude construction of roads, utilities, storm water management facilities, any other required improvements for erection of buildings on the Property. Buyer has obtained all permits and approvals, and all conditions thereof shall have been satisfied, so as to allow for recording of the final plan and issuance of building permits subject only to satisfaction of the following requirements by Buyer at or after Closing (i) submission of construction drawings in accordance with applicable law, (ii) execution by the Buyer of the necessary development agreements, (iii) execution and funding by Buyer of the necessary escrow agreements for municipal improvements, and sewer and water improvements, and (iv) payment by the Buyer of all municipal fees and charges associated therewith. Subject to Seller's obligation set forth in Section 6(f) below, Buyer has obtained any and all other easements, approvals and/or permits that may be necessary to construct and use the improvements comprising the Project. Buyer shall obtain, at no additional cost to Seller, all easements and roads that in Buyer's sole reasonable discretion are necessary for property access, utilities and signage to the Property in accordance with Buyer's final approved site development plan. The items referred to in subsections 6(a) through 6(f) hereof shall hereafter be referred to as the "Buyer Required Approvals." After the end of the Inspection Period, Buyer shall diligently proceed with the filing of all applications necessary for obtaining the Buyer Required Approvals. Seller agrees, at no expense to Seller, to cooperate with buyer in connection with the Buyer Required Approvals to the extent of signing all applications necessary for obtaining the buyer Required Approvals and appearing and testifying at the various hearings. Seller's cooperation as aforesaid shall not entitle Seller to any additional compensation. All permit fees, studies, deposit and investigation costs incurred in connection with the Buyer Required Approvals shall be the sole responsibility of buyer and buyer agrees to affirmatively use its good faith efforts to obtain all of the Buyer Required Approvals without delay and as expeditiously as reasonably possible. Seller hereby grants to Buyer a power of attorney to file, on Seller's behalf, all applications related to the Buyer Required Approvals; provided, however, that the Land shall not be rezoned prior to the expiration of the Inspection Period. Seller acknowledges that buyer will likely contact, meet with and/or obtain consents for the Project from neighboring property owners during the Inspection Period and in the process of obtaining the Buyer Required Approvals. (emphasis added). None of the provisions of paragraph six of the Agreement of Sale were waived by either party. Paragraph 15(b) of the Agreement of Sale provides as follows: (b) If Seller shall violate or fail (in breach of its obligations hereunder) to fulfill or perform any of the terms, conditions or undertaking set forth in this Agreement within ten (10) days written notice from Buyer or (five (5) days written notice in the event of a monetary default), Buyer shall be entitled to: (i) terminate this Agreement and receive the return of the Deposit and reimbursement of Buyer's documented out-of-pocket due diligence expenses up to $15,000.00, and, thereupon, the parties hereto will be released and relieved from all provisions of this Agreement, or (ii) pursue specific performance. Paragraph 17 of the Agreement of Sale states that “[b]uyer and Seller agree to cooperate with each other and to take such further actions as may be requested by the other in order to facilitate the timely purchase and sale of the Property.” Paragraphs 6, 15(b) and 17 of the Agreement of Sale obligated Respondent to take all steps necessary, including “appearing and testifying at the various hearings,” for ensuring that the “Buyer Required Approvals” were satisfied, which in turn would allow Respondent to receive his share of the purchase price for the West Road property. Section 112.311(1), provides in part that “[i]t is essential to the proper conduct and operation of government that public officials be independent and impartial and that public office not be used for private gain other than the remuneration provided by law.” Rezoning and Respondent’s Role In order for a charter school to be built on the West Road property, it was necessary to rezone the existing planned unit development land use plan covering the property. Ocoee City Planner Michael Rumer testified that there are two types of rezoning. There is a straight rezoning to a zoning category listed in the land development code and there is rezoning to a planned unit development (PUD). Both types of zoning use the following process: an application is filed; then there is a review process by a development review committee, which is a staff level review; that review is forwarded to the P & Z Commission for a recommendation; and then it goes to the Ocoee City Commission for two readings of an ordinance for rezoning if the rezoning is approved. This is the process that was followed for the West Road property PUD. On February 9, 2016, the issue of whether to recommend rezoning of the West Road property to allow for the charter school referenced in the Agreement of Sale came before the P & Z Commission. Respondent was present for the meeting. During the meeting, Respondent spoke in favor of the rezoning request for the West Road property. When a fellow commissioner made a request for more time to review the rezoning issue, Respondent opposed the delay by stating “[i]f you don't give them a go now, you basically kill the deal because it's a time sensitive thing that they want the kids in there in August.” During the meeting, the commissioners struggled with whether to recommend denial of the West Road property zoning request, recommend approval of the request without conditions, or recommend approval of the request with conditions. After two previous motions regarding the zoning request died for lack of a “second,” a third motion was made wherein approval was recommended “with the condition that we’re all going to look at the traffic movement with the final site plan design.” When it appeared as though this motion was also likely to fail for lack of a “second,” Respondent encouraged the chairman of the P & Z Commission to voice a “second” for the motion since Respondent was unable to do so.2/ Respondent’s actions during the meeting of February 9, 2016, were consistent with his obligations under the Agreement of Sale to assist the buyer of the West Road property with securing the “Buyer Required Approvals.”
Recommendation Based on the Findings of Facts and Conclusions of Law, it is RECOMMENDED that a civil penalty of $10,000.00 be imposed against Respondent due to his violation of section 112.313(7)(a) and that Respondent also be publicly censured and reprimanded. DONE AND ENTERED this 10th day of April, 2017, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of April, 2017.
The Issue The issue is whether Petitioners' Motions for Attorney's Fees should be granted, and if so, in what amount.
Findings Of Fact Based upon the stipulation of counsel, the papers filed herein, and the underlying record made a part of this proceeding, the following findings of fact are determined: Background In this attorney's fees dispute, Petitioners, Anderson Columbia Company, Inc. (Anderson Columbia) (Case No. 00-0754F), Panhandle Land & Timber Company, Inc. (Panhandle Land) (Case No. 00-0755F), Support Terminals Operating Partnership, L.P. (Support Terminals) (Case No. 00-0756F), Commodores Point Terminal Corporation (Commodores Point) (Case No. 00-0757F), and Olan B. Ward, Sr., Martha P. Ward, Anthony Taranto, Antoinette Taranto, J.V. Gander Distributors, Inc., J.V. Gander, Jr., and Three Rivers Properties, Inc. (the Ward group) (Case No. 00-0828F), have requested the award of attorney's fees and costs incurred in successfully challenging proposed Rule 18-21.019(1), Florida Administrative Code, a rule administered by Respondent, Board of Trustees of the Internal Improvement Trust Fund (Board). In general terms, the proposed rule essentially authorized the Board, through the use of a qualified disclaimer, to reclaim sovereign submerged lands which had previously been conveyed to the upland owners by virtue of their having filled in, bulkheaded, or permanently improved the submerged lands. The underlying actions were assigned Case Nos. 98- 1764RP, 98-1866RP, 98-2045RP, and 98-2046RP, and an evidentiary hearing on the rule challenge was held on May 21, 1998. That proceeding culminated in the issuance of a Final Order in Support Terminals Operating Partnership, L.P. et al. v. Board of Trustees of the Internal Improvement Trust Fund, 21 F.A.L.R. 3844 (Div. Admin. Hrngs., Aug. 8, 1998), which determined that, except for one challenged provision, the proposed rule was valid. Thereafter, in the case of Anderson Columbia Company, Inc. et al. v. Board of Trustees of the Internal Improvement Trust Fund, 748 So. 2d 1061 (Fla. 1st DCA 1999), the court reversed the order below and determined that the rule was an invalid exercise of delegated legislative authority. Petitioners then filed their motions. Fees and Costs There are eleven Petitioners seeking reimbursement of fees and costs. In its motion, Anderson Columbia seeks reimbursement of attorney's fees "up to the $15,000 cap allowed by statute" while Panhandle Land seeks identical relief. In their similarly worded motions, Support Terminals and Commodores Point each seek fees "up to the $15,000 cap allowed by statute." Finally, the Ward group collectively seeks $9,117.00 in attorney's fees and $139.77 in costs. In the Joint Stipulations of Fact filed by the parties, the Board has agreed that the rate and hours for all Petitioners "were reasonable." As to all Petitioners except the Ward group, the Board has further agreed that each of their costs to challenge the rule exceeded $15,000.00. It has also agreed that even though they were not contained in the motions, requests for costs by Support Terminals, Commodores Point, Anderson Columbia, and Panhandle Land in the amounts of $1,143.22, $1,143.22, $1,933.07, and $1,933.07, respectively, were "reasonable." Finally, the Board has agreed that the request for costs by the Ward group in the amount of $139.77 is "reasonable." Despite the stipulation, and in the event it does not prevail on the merits of these cases, the Board contends that the four claimants in Case Nos. 00-754F, 00-755F, 00-0756F, and 00- 757F should be reimbursed only on a per case basis, and not per client, or $7,500.00 apiece, on the theory that they were sharing counsel, and the discrepancy between the amount of fees requested by the Ward group (made up of seven Petitioners) and the higher fees requested by the other Petitioners "is difficult to understand and justify." If this theory is accepted, it would mean that Support Terminals and Commodores Point would share a single $15,000.00 fee, while Anderson Columbia and Panhandle Land would do the same. Support Terminals and Commodores Point were unrelated clients who happened to choose the same counsel; they were not a "shared venture." Each brought a different perspective to the case since Commodores Point had already received a disclaimer with no reversionary interest while Support Terminals received one with a reversionary interest on June 26, 1997. The latter event ultimately precipitated this matter and led to the proposed rulemaking. Likewise, in the case of Anderson Columbia and Panhandle Land, one was a landowner while the other was a tenant, and they also happened to choose the same attorney to represent them. For the sake of convenience and economy, the underlying cases were consolidated and the matters joined for hearing. Substantial Justification From a factual basis, the Board contends several factors should be taken into account in determining whether it was substantially justified in proposing the challenged rule. First, the Board points out that its members are mainly lay persons, and they relied in good faith on the legal advice of the Board's staff and remarks made by the Attorney General during the course of the meeting at which the Board issued a disclaimer to Support Terminals. Therefore, the Board argues that it should be insulated from liability since it was relying on the advice of counsel. If this were true, though, an agency that relied on legal advice could never be held responsible for a decision which lacked substantial justification. The Board also relies upon the fact that it has a constitutional duty to protect the sovereign lands held in the public trust for the use and benefit of the public. Because lands may be disclaimed under the Butler Act only if they fully meet the requirements of the grant, and these questions involve complex policy considerations, the Board argues that the complexity and difficulty of this task militate against an award of fees. While its mission is indisputably important, however, the Board is no different than other state agencies who likewise are charged with the protection of the health, safety, and welfare of the citizens. The Board further relies on the fact that the rule was never intended to affect title to Petitioners' lands, and all Petitioners had legal recourse to file a suit to quiet title in circuit court. As the appellate court noted, however, the effect of the rule was direct and immediate, and through the issuance of a disclaimer with the objectionable language, it created a reversionary interest in the State and made private lands subject to public use. During the final hearing in the underlying proceedings, the then Director of State Lands vigorously supported the proposed rule as being in the best interests of the State and consistent with the "inalienable" Public Trust. However, he was unaware of any Florida court decision which supported the Board's views, and he could cite no specific statutory guidance for the Board's actions. The Director also acknowledged that the statutory authority for the rule (Section 253.129, Florida Statutes) simply directed the Board to issue disclaimers, and it made no mention of the right of the Board to reclaim submerged lands through the issuance of a qualified disclaimer. In short, while the Board could articulate a theory for its rule, it had very little, if any, basis in Florida statutory or common law or judicial precedent to support that theory. Although Board counsel has ably argued that the law on the Butler Act was archaic, confusing, and conflicting in many respects, the rule challenge case ultimately turned on a single issue, that is, whether the Riparian Rights Act of 1856 and the Butler Act of 1921 granted to upland or riparian owners fee simple title to the adjacent submerged lands which were filled in, bulkheaded, or permanently improved. In other words, the ultimate issue was whether the Board's position was "inconsistent with the . . . the concept of fee simple title." Anderson Columbia at 1066. On this issue, the court held that the State could not through rulemaking "seek to reserve ownership interests by issuing less than an unqualified or unconditional disclaimer to riparian lands which meet the statutory requirements." Id. at 1067. Thus, with no supporting case law or precedent to support its view on that point, there was little room for confusion or doubt on the part of the Board. E. Special Circumstances In terms of special circumstances that would make an award of fees unjust, the Board first contends that the proposed rule was never intended to "harm anyone," and that none of Petitioners were actually harmed. But the substantial interests of each Petitioner were clearly affected by the proposed rules, and the appellate court concluded that the rule would result in an unconstitutional forfeiture of property. The Board also contends that because it must make proprietary decisions affecting the public trust, it should be given wide latitude in rulemaking. It further points out that the Board must engage in the difficult task of balancing the interests of the public with private rights, and that when it infringes on the private rights of others, as it did here, it should not be penalized for erring on the side of the public. As previously noted, however, all state agencies have worthy governmental responsibilities, but this in itself does not insulate an agency from sanctions. As an additional special circumstance, the Board points out that many of the provisions within the proposed rule were not challenged and were therefore valid. In this case, several subsections were admittedly unchallenged, but the offending provisions which form the crux of the rule were invalidated. Finally, the Board reasons that any moneys paid in fees and costs will diminish the amount of money to be spent on public lands. It is unlikely, however, that any state agency has funds set aside for the payment of attorney's fees and costs under Section 120.595(2), Florida Statutes (1999).
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: DCA is the state land planning agency with the power and duty to exercise general supervision over the administration and enforcement of Chapter 380, Florida Statutes, including Areas of Critical State Concern, and all rules and regulations promulgated thereunder. See, Section 380.031(18), Florida Statutes. The City of Key West is in the Florida Keys Area of Critical State Concern. See, Section 380.0552(3), Florida Statutes and Rule 27F-8, Florida Administrative Code. Since the City is in the Florida Key's Area of Critical State Concern, City ordinances regulating land development do not take effect until DCA approves them "by rule." See, Section 380.0552(9), Florida Statutes. See also, Section 380.05(6), Florida Statutes (which provides that no proposed land development regulation in an Area of Critical State Concern shall become effective until DCA has adopted a rule approving such regulation.) In pertinent part, Section 380.0552, Florida Statutes provides: 380.0552 Florida Keys Area; protection and designation as area of critical state concern.-- PRINCIPLES FOR GUIDING DEVELOPMENT.--State, regional, and local agencies and units of government in the Florida Keys Area shall coordinate their plans and conduct their programs and regulatory activities consistent with the principles for guiding development as set forth in chapter 27F-8, Florida Administrative Code, as amended effective August 23, 1984, which chapter is hereby adopted and incorporated herein by reference. For the purposes of reviewing consistency of the adopted plan or any amendments to that plan with the principles for guiding development and any amendments to the principles, the principles shall be construed as a whole and no specific provision shall be construed or applied in isolation from the other provisions. However, the principles for guiding development as set forth in chapter 27F-8, Florida Administrative Code, as amended effective August 23, 1984, are repealed 18 months from July 1, 1986. After repeal, the following shall be the principles with which any plan amendments must be consistent: To strengthen local government capabilities for managing land use and development so that local government is able to achieve these objectives without the continuation of the area of critical state concern designation. To protect shorelines and marine resources, including mangroves, coral reef formations, seagrass beds, wetlands, fish and wildlife, and their habitat. To protect upland resources, tropical biological communities, freshwater wetlands, native tropical vegetation (for example, hardwood hammocks and pinelands), dune ridges and beaches, wildlife, and their habitat. To ensure the maximum well-being of the Florida Keys and its citizens through sound economic development. To limit the adverse impacts of development on the quality of water throughout the Florida Keys. To enhance natural scenic resources, promote the aesthetic benefits of the natural environment, and ensure that development is compatible with the unique historic character of the Florida Keys. To protect the historical heritage of the Florida Keys. To protect the value, efficiency, cost- effectiveness, and amortized life of existing and proposed major public investments, including: The Florida Keys Aqueduct and water supply facilities; Sewage collection and disposal facilities; Solid waste collection and disposal facilities; Key West Naval Air Station and other military facilities; Transportation facilities; Federal parks wildlife refuges, and marine sanctuaries; State parks, recreation facilities, aquatic preserves, and other publicly owned properties; City electric service and the Florida Keys Co-op; and Other utilities, as appropriate. To limit the adverse impacts of public investments on the environmental resources of the Florida Keys. To make available adequate affordable housing for all sectors of the population of the Florida Keys. To provide adequate alternatives for the protection of public safety and welfare in the event of a natural or man-made disaster and for a post-disaster reconstruction plan. To protect the public health, safety, and welfare of the citizens of the Florida Keys and maintain the Florida Keys as a unique Florida resource. * * * MODIFICATION TO PLANS AND REGULATIONS.--Any land development regulation or element of a local comprehensive plan in the Florida Keys Area may be enacted, amended, or rescinded by a local government, but the enactment, amendment or rescission shall become effective only upon the approval thereof by the state land planning agency. The state land planning agency shall review the proposed change to determine if it is in compliance with the principles for guiding development set forth in chapter 27F-8, Florida Administrative Code, as amended effective August 23, 1984, and shall either approve or reject the requested changes within 60 days of receipt thereof. Further, the state land planning agency, after consulting with the appropriate local government, may, no more often than once a year, recommend to the Administration Commission the enactment, amendment, or rescission of a land development regulation or element of a local comprehensive plan. Within 45 days following the receipt of such recommendation by the state land planning agency, the commission shall reject the recommendation, or accept it with or without modification and adopt it, by rule, including any changes. Any such local development regulation or plan shall be in compliance with the principles for guiding development. (Emphasis supplied.) In sum, any land development regulations adopted by the City must be submitted to DCA for approval or rejection pursuant to Section 380.0552(9). Such regulations become effective when approved by DCA. In evaluating an Ordinance submitted pursuant to Section 380.0552(9), DCA will look to the Principles for Guiding Development found in Section 380.0552(7), Florida Statutes. DCA is directed to approve a proposed ordinance if it is in compliance with the Principles for Guiding Development; conversely, DCA is without authority to approve a proposed amendment which is not in compliance with the Principles for Guiding Development. On September 3, 1991, the City adopted Ordinance 91-25 (the "Ordinance") which provides for a 180 day moratorium on certain development activities in the City. The Ordinance prohibits ...the approval of Community Impact Assessment Statements and site plans for projects falling within the scope of the city's CIAS ordinance, where the proposed density or intensity of use is inconsistent with the permitted density or intensity under the future land use map of the city's pending comprehensive plan or the property is situated in an area designated as coastal high hazard or wetlands on the Future Land Use Map of the City's pending comprehensive land use plan... A building moratorium, such as that set forth in the Ordinance, constitutes a land development regulation as defined in Section 380.031(8), and Rule 28-20.19(4), Florida Administrative Code. Therefore, the moratorium could not take effect until approved by DCA by rule. A Community Impact Assessment Statement ("CIAS"), as defined in Section 34.04, Key West Code, describes expected impacts of proposed development on specified City resources and infrastructure. While a CIAS is not a development order, the City requires a CIAS as a precondition to the granting of a building permit for most large projects in the City. A developer is required to submit a CIAS for a proposed residential or hotel/motel development of ten or more habitable units or a proposed commercial development of 10,000 square feet or more. A CIAS is intended to ensure that the impacts a proposed project will have upon public facilities and the social and economic resources of the community are considered in the planning process and to avoid surprises during the planning process. The City will reject a CIAS that it finds to be incomplete or misleading. The City Commission held its first hearing on the Ordinance on June 18, 1991. At least five public hearings before the City Commission were held prior to the City's adoption of the Ordinance. The 1981 City of Key West Comprehensive Plan (the "Existing Comprehensive Plan") sets forth certain parameters and standards for the issuance of development orders. The Existing Comprehensive Plan has been approved by the Administration Commission in Chapter 28-37, Florida Administrative Code. The City of Key West land development regulations and certain amendments to the Existing Comprehensive Plan have been approved by DCA in Chapter 9J-22, Florida Administrative Code. The City is required by the States's growth management statute, Part II of Chapter 163, Florida Statutes, to submit to DCA a new comprehensive plan. Since the City is in an Area of Critical State Concern, the new comprehensive plan will not take effect until it is approved by DCA by rule. The Existing Comprehensive Plan remains in effect until a new plan is adopted. At the time the Ordinance was adopted, the City was in the process of preparing a new comprehensive plan to guide future development. By adopting the moratorium, the City sought to provide itself with an opportunity to effectively implement a new comprehensive plan. The City submitted a proposed new comprehensive plan (the "Pending Comprehensive Plan") to DCA on December 2, 1991. DCA and the City are currently involved in negotiations over whether the Pending Comprehensive Plan is in compliance with the state's growth management law, Chapter 163, Florida Statutes, and the rules promulgated thereunder, Rule 9J-5, Florida Administrative Code. The Pending Comprehensive Plan was still in the draft stages at the time the Ordinance was adopted. As indicated above, the City adopted the moratorium for projects requiring a CIAS in an effort to ensure that the City would be able to effectively implement a new comprehensive plan. The City is faced with numerous development-related problems which it attempts to address in the Pending Comprehensive Plan. These problems include: Water Quality Water Resources - The City draws all of its water from the Biscayne Aquifer. The water is pumped from wellfields on the mainland in Dade County and is transported through a single pipe to Monroe County to provide water to the Florida Keys population. While there is no immediate problem with the availability of water for the City, the Florida Keys Aqueduct Authority and the South Florida Water Management District (SFWMD) are in the process of preparing a water supply plan for Dade County and the Keys. These agencies recently informed all Monroe County local governments that they are approaching the limit of water that can be supplied from the aquifer and it is expected that there will be limitations on any further increases in consumption and/or consumptive use permits. The City and DCA contend that the moratorium will help the City to effectively analyze and address these issues in its new comprehensive plan. Chapter 4 of the Pending Comprehensive Plan would require the City to develop a plan for potable water resources, including replacement of the aging water main, providing for emergency supplies, and emphasizing the need to conserve water. Sewer System - Sewage treatment in the City of Key West is a serious problem. The treated effluent is currently dumped into the Atlantic Ocean and has been implicated in the degradation of the environmentally sensitive and unique coral reefs. Chapter 4 of the Pending Comprehensive Plan would direct the City to substantially improve its wastewater treatment level of service, prevent system infiltration, fix leaky pipes, and reduce the pollution of the surrounding waters. Stormwater Runoff - The waters surrounding the island of Key West have been designated Outstanding Florida Waters, pursuant to Chapter 403, Florida Statutes. The runoff generated by rains in the City is currently channeled into these waters either directly or via canals. The Existing Comprehensive Plan does not contain extensive guidance regarding stormwater runoff. Chapter 4 of the Pending Comprehensive Plan would direct the City to conduct a half million dollar study over the next two years to examine, develop, and implement a stormwater management plan. Section 4-2.1(d) of the Pending Comprehensive Plan would also require improved levels of service for stormwater runoff. Hurricane Evacuation - The evacuation of people out of the Florida Keys during a hurricane is an important element in the planning process for the City. The Existing Comprehensive Plan does not provide any standards for hurricane evacuation. Chapter 2 of the Pending Comprehensive Plan requires the City of Key West to develop a feasible hurricane evacuation plan and coordinate its implementation with the County. The City has taken no action on this directive to date. A model is being developed within the Monroe County Comprehensive Plan for the safe evacuation of residents from the Florida Keys. The model will include updated information based upon the Pending Comprehensive Plan. The inclusion of new development into the model is complicated. By temporarily limiting new development, the City can provide more certainty to this planning process. Wetlands and Environmental Protection - The Pending Comprehensive Plan seeks to strengthen and clarify the Existing Comprehensive Plan provisions regarding wetlands and habitat protection by reducing densities within wetlands, salt ponds, and coastal high hazard areas and requiring the adoption of amended land development regulations which extensively improve the City's environmental protection requirements. Residential Housing and Conversion to Transient Units - There have been a significant number of conversions from residential to transient units (hotels, motels, and other tourist accommodations) in the City during the last several years. The increase in "transient" persons exacerbates the strain upon public facilities, especially transportation facilities. The Existing Comprehensive Plan offers little protection to residential areas from commercial and transient intrusion. The Future Land Use Element of the Pending Comprehensive Plan attempts to guide and plan the locations of conversions. Transportation - Many roads in the City are currently operating at poor levels of service, including U.S. Highway 1, the main arterial roadway in the City. The City has never had a specific plan to improve the levels of service. The City is required under the growth management statute (Chapter 163) to provide adequate levels of service on the roads within the City. Chapter 2 of the Pending Comprehensive Plan proposes to implement an extensive traffic circulation system over the next twenty years which will include roadway improvements, revised levels of service, and nonmotorized transportation provisions. Solid Waste - Currently, the City's solid waste is disposed at a local landfill. The City's solid waste disposal facility is currently operating under a year old consent order that directs the facility to be closed within three years. The Existing Comprehensive Plan states that the City is to provide adequate public facilities, but does not explain what constitutes "adequate". The Existing Comprehensive Plan does not provide a plan for the impending closure. The Pending Comprehensive Plan would require the City to provide the funding for solid waste disposal improvements. The clear goal of the Ordinance was to delay the approval of certain CIAS applications, site plans and building permits for 180 days while work continued on the Pending Comprehensive Plan. The City contends that the moratorium will help it to effectively implement the policies which it anticipates will be incorporated in the new comprehensive plan when it is finally in place. The Ordinance provided that the 180 day moratorium would begin on the effective date of the administrative rule approving the Ordinance. The City and DCA were concerned that normal administrative rulemaking time periods would defeat the purpose of the Ordinance. Normal rulemaking pursuant to Section 120.54, Florida Statutes, generally takes between 90 to 120 days. Many local governments experience a significant increase in development proposals immediately prior to the adoption of a new comprehensive plan. Many of these proposals are prompted by a fear as to the impact of the new plan and seek to acquire vested rights under the old plan. The City and DCA were concerned that such an increase in development proposals might complicate the planning process by rendering some aspects or assumptions of a new plan moot before the plan could even be adopted. Moratoria are frequently used by local governments in order to complete an effective comprehensive plan without the need for changes. In the year immediately proceeding the adoption of the Pending Comprehensive Plan by the City Commission (from September 1990 through September 1991), the City received seven CIAS applications. No CIAS applications had been received during the year prior. The City contends that many of the 1990/1991 applications were motivated by an attempt to obtain vested development rights. However, no persuasive evidence to support this speculation was presented. The City Commmission did not consider any reports, studies or other data in connection with the enactment of the Ordinance. At the time the Ordinance was adopted, the City Commission did not make any specific determinations that there were any immediate dangers to the public health, safety or welfare of the community nor was the Ordinance enacted as an emergency ordinance. After its adoption by the City Commission, the Ordinance was transmitted to DCA on September 5, 1991 for approval pursuant to Section 380.0552(9), Florida Statutes. The only information transmitted to DCA was a copy of the Ordinance. As indicated above, the City and DCA were concerned that normal administrative rulemaking time periods would defeat the purpose of the City's Ordinance. The City Planner contacted DCA to request approval of the Ordinance by emergency rule. The City Planner and DCA concurred in the conclusion that the purpose of the Ordinance would be defeated if it was not immediately implemented. The City Commission did not specifically ask or authorize the City Planner to request DCA to enact the Ordinance by emergency rule. The City's concerns included, among other things, that the conversions of residential properties to transient tourist accommodations would accelerate during the process of finalizing the Pending Comprehensive Plan. In addition, the City expects that its new comprehensive plan will reexamine the densities in coastal high hazard areas. By adopting a moratorium, the City sought to insure that any new developments will comply with the new densities ultimately adopted. On September 18, 1991, DCA filed the rule packet for the Emergency Rule with the Secretary of State and the Emergency Rule became effective on that date. DCA did not prepare an economic impact statement for the Emergency Rule. The rule packet consisted of: (a) a Certification Of Emergency Rule; (b) the Notice Of Emergency Rule; (c) a Statement Of The Specific Facts And Reasons For Finding An Immediate Danger To The Public Health, Safety And Welfare, (the "Statement of Specific Reasons") and (d) a Statement of the Agency's Reasons for Concluding that the Procedure Used Is Fair under the Circumstances (the "Agency Conclusions"). The Notice of Emergency Rule appeared in the September 27, 1991 edition of the Florida Administrative Weekly. In the Statement of Specific Reasons, DCA concluded that: ...Generally, a [comprehensive] plan revision process stimulates an accelerated rate of permit requests. Accelerated permitting including the acquisition of vested rights during a planning period will severly erode the City's ability to effectively revise and implement the comprehensive plan. Such accelerated development will also lead to further deterioration of current hurricane evacuation clearance time for the City. This action will increase the existing potential for loss of life and injury to person [sic] and property, will cause further deterioration of level [sic] of service on existing roadways and will lead to irreversible environmental degradation. Therefore this rule must be adopted by emergency procedures because of the potential immediate danger to the public health, safety and welfare. In the Agency Conclusions, DCA concluded: The emergency rulemaking is fair because (1) it immediately approves the ordinance as adopted by the City of Key West Commission and (2) normal rulemaking would moot the intent of the adopted ordinance since the City of Key West would be required to continue accepting applications for building permits, site plans, of [CIAS's] covering work projects or both, as set forth in Section 2 of ordinance 91-25 until the Department's rule approving the ordinance becomes effective. DCA's Statement of Specific Reasons was not reviewed or discussed with the City or its planner prior to its preparation. In deciding to promulgate the Emergency Rule, DCA considered the major public facilities and natural resource problems confronting the City and the City's proposed strategy to deal with these problems in the Pending Comprehensive Plan. DCA concluded that an immediate danger to the public health, safety, and welfare currently exists within the City justifying the approval of the Ordinance by emergency rule. The evidence clearly indicates that the City is facing many significant problems from a planning perspective. Petitioner contends, however, that there is no evidence that any of those problems present an "immediate" threat to the public health, safety or welfare. For the reasons set forth in the Conclusions of Law below, this contention is rejected. On October 10, 1991, DCA filed a rule packet for the Proposed Rule with the Secretary of State. The rule packet consisted of the Notice Of Proposed Rule 9J-22.013, the Estimate of Economic Impact on All Affected Persons (the "EIS",) a Statement of the Facts and Circumstances Justifying Proposed Rule 9J-22.013 (the "Statement of Facts"), a summary of the Proposed Rule, a Comparison with Federal Standards, a Statement of Impact on Small Business and the text of the Proposed Rule. The Notice of Proposed Rule 9J-22.013 appeared in the October 18, 1991 edition of the Florida Administrative Weekly. On October 24, 1991, DCA filed a Notice of Change with the Secretary of State, stating that the correct number for the Proposed Rule was 9J-22.014, since 9J-22.013 had already been used. The Notice of Change appeared in the November 1, 1991 edition of the Florida Administrative Weekly. DCA did not consider any appraisals, data, reports or other studies concerning the economic impact that could result from the imposition of a moratorium. Instead, DCA followed the approach it had used in approving prior ordinances enacted by the City and concluded that its role in reviewing the Ordinance for compliance with the Priniciples Guiding Development did not require an examination of the economic impact of the underlying policy decisions reached by the City Commission in adopting the Ordinance. The EIS states that: Costs and benefits will occur as a result of this ordinance and were considered by the City prior to adoption of the ordinance. The City did not provide any information to DCA on the economic impacts of the Ordinance or on the impact of the Ordinance on the value of properties affected by it. The evidence was unclear as to the extent to which the City Commission considered economic impacts in deciding to adopt the Ordinance. Several public hearings were held in connection with the adoption of the Ordinance and DCA assumed that interested parties had an opportunity to express their concerns regarding the economic impact of the Ordinance at these hearings. DCA did not inquire as to the number of projects under review by the City at the time the Ordinance was passed nor did it seek a determination as to whether any projects with vested rights were affected by the Ordinance. The City Planning Department has retained a consultant, as required by the Ordinance, to conduct an economic study of existing conditions and projections for future growth. The purpose of this study is to assist in developing future amendments to the Ordinance. The study is not final and was not considered by the Key West City Commission when the Ordinance was enacted. DCA concluded that the proposed moratorium adopted by the Key West City Commission was consistent with the Principles for Guiding Development. Therefore, DCA concluded that Section 380.0552 required it to approve the Ordinance. Petitioner has not presented any persuasive evidence to establish that the Ordinance is in any way inconsistent with the Principles for Guiding Development. Petitioner owns 6.8 acres of vacant real property on Atlantic Boulevard in the City. He purchased the property in 1974 with the intent to develop it. Petitioner's property is located in an R-2H zoning district. The City's future land use map designates Petitioner's property as multi-family. Petitioner has spent approximately $71,000.00 to hire architects, engineers, surveyors, planners, biologists and attorneys to aid him in preparing to develop the subject property. In 1989, Petitioner submitted applications for a Department of Environmental Regulation Surface Water Management permit, and an Army Corps of Engineers dredge-and-fill permit, but neither of those permits have been issued to date. Generally the City requires a developer to obtain these "higher-order" permits prior to issuing a building permit. Petitioner has never applied for or installed sewer service, water service or any other utility service to the property. Since he acquired the property, Petitioner has not cleared any vegetation on the property except for minor trimming adjacent to the roadway which was required by the City for safety purposes. In June of 1989, the City passed a resolution notifying the Department of Environmental Regulation that it opposed Petitioner's application to place fill upon the property. On April 10, 1991, Petitioner submitted a CIAS to the City for a proposed 96 unit residential development in three buildings on the subject property. Before the Ordinance was enacted, the City Planner prepared a report dated July 3, 1991 reviewing Petitioner's CIAS as required by the CIAS ordinance. In that review, the City Planner concluded: The project is located in the R-2H zoning district and conforms to all provisions of that district, thus requiring no variances or special exceptions. On August 6, 1991, the Key West City Commission considered Petitioner's CIAS. The City Commission refused to approve the Petitioner's CIAS application. Specifically, the City Commission determined that Petitioner's CIAS application was incomplete and that the "submerged land district" designation ("SL") applied to the Petitioner's property as an overlay zoning district because Petitioner's property is located in an area which is deemed to include wetlands and mangroves. The City Commission requested that the CIAS address the "submerged land district" before the CIAS application could be deemed complete. The City Planner was not present at the August 6, 1991 City Commission meeting. The "submerged land district" in Section 35.07(f), City of Key West Code, provides that the density and site alteration of "environmentally sensitive areas including but not limited to wetland communities, mangroves, tropical hardwood hammocks and salt ponds shall be zoned with a maximum density of one (1) unit per acre. Site alteration shall be limited to a maximum of ten percent of the total size." The "submerged land district" overlay zone applies to any parts of the property which fall within the description of "environmentally sensitive areas" in Section 35.07, City of Key West Code. Because there is confusion over the interpretation and applicability of the SL district and because the SL land use district does not appear on the City's official zoning map, it was not considered in the preparation of the July 3 Report. The evidence in this case was inconclusive as to whether Petitioner's property is located in a SL district and/or whether Petitioner's CIAS for his property can be approved under the City regulations in place prior to the adoption of the Ordinance. On August 22, 1991, Petitioner submitted an amendment to the CIAS as well as a Site Plan. The amendment to the CIAS contests the City's conclusion that Petitioner's property should be considered part of a SL district. As set forth above, during this time period, the City had began consideration of the Ordinance. The first hearing on the Ordinance was held on June 18, 1991 and the Ordinance was passed by the City Commission on September 3, 1991. The City Planner notified Petitioner by letter dated October 11, 1991, that his CIAS Site Plan review and approval had been "stayed" because of the enactment of the Ordinance and because of the project's "inconsistencies with the City's Pending Comprehensive Plan." Petitioner requested an exception from the effect of the Ordinance pursuant to the procedure contained in the Ordinance. A hearing was held before the City Commission and the request was denied.
Findings Of Fact The Subject Property. The property at issue in this case had previously been owned by an individual who had begun development of the subject property and adjoining property (hereinafter referred to as the "Dawkins' Property"), in the late 1970's and early 1980's. Part of the Dawkins Property was developed and has been sold (hereinafter referred to as the "Bank Tract"). The subject property (hereinafter referred to as the "Golden Tract"), was acquired by Golden/Jacksonville Co. in December, 1986. Development of the Property; Government Action Relied Upon by the Applicant. Most of the Dawkins Property, including most of the Golden Tract, was approved and zoned in 1977 by Clay County for development as a shopping center. A part of the Golden Tract (hereinafter referred to as the "Multifamily Tract"), however, was not zoned for development as a shopping center at that time. Part of the Dawkins Property (the Bank Tract) was fully developed as a bank. Various environmental permits required to further develop the Dawkins Property, less the Bank Tract and the Multifamily Tract, as a shopping center were acquired by the previous owner of the property. Permits were issued by the Florida Department of Environmental Regulation and the St. Johns Water Management District. Prior to purchasing the Golden Tract, the Applicant sought assurance of Clay County that the Golden Tract (but not the Multifamily Tract) was zoned for development as a shopping center. Clay County, in a letter dated December 9, 1985, confirmed that development of the Golden Tract as a shopping center was consistent with the then current zoning for the property. In confirming the zoning of the Golden Tract, Clay County notified the Applicant that it would be necessary that a traffic signal be installed at an intersection on Blanding Boulevard which would be impacted by the shopping center. In 1987, the Applicant sought and obtained approval of the rezoning of the Multifamily Tract for development as a shopping center. The Applicant submitted a revised site plan for the proposed shopping center dated August 27, 1987 to Clay County for approval in connection with the request to rezone the Multifamily Tract. The site plan included the development of 264,000 square feet of commercial space. The August 27, 1987 revised site plan was approved by Clay County in November, 1987. In May, 1988, the Applicant applied with the Florida Department of Transportation (hereinafter referred to as "DOT"), for a drainage connection permit and a driveway connection permit in connection with providing access to the proposed shopping center. As a condition of issuing the required permit, DOT required that Clay County construct certain intersection improvements on Blanding Boulevard, the main traffic artery adjacent to the Golden Property. The Applicant entered into negotiations with Clay County in order to get the Blanding Boulevard intersection improvements required by DOT completed. On January 9, 1990, the Applicant and Clay County entered into an agreement wherein the Applicant agreed to pay Clay County 50% of the costs (up to a total of $23,000.00) of the DOT-required intersection improvements. The Applicant's Detrimental Reliance. In reliance on Clay County's actions in informing the Applicant that it would be required to provide a traffic signal in order to proceed with the development of the Golden Tract, the Applicant had the traffic signal installed at a cost of $7,500.00. Following approval of the August 27, 1987 revised site plan by Clay County, the Applicant spent approximately $128,000.00 to construct a stormwater retention pond required by the St. Johns River Water Management District. Part of the costs of intersection improvements required by DOT were incurred by the Applicant. The weight of the evidence failed to prove how much the Applicant actually spent, however. The Applicant also proceeded with the development of the Golden Tract, incurring architecture and engineering fees and other costs associated with the proposed development of the Golden Tract. A detailed breakdown of various expenses incurred by the Applicant was included at tab 25 of the documentation filed in support of the Application. Although not all of the expenditures listed at tab 25, i.e., taxes and costs associated with the purchase of the Golden Property, are relevant to the issues in this proceeding, some of the expenditures were incurred in reliance on the actions of Clay County other than approval of zoning of the Golden Tract. Rights That Will Be Destroyed. Pursuant to the Clay County 2001 Comprehensive Plan, there are insufficient "peak hour trips" available on the roads impacted by the Golden Tract to accommodate the peak hour trips required for the Golden Tract if it is developed as a shopping center. Procedural Requirements. The parties stipulated that the procedural requirements of the Vested Rights Review Process of Clay County, adopted by Clay County Ordinance 92-18, as amended by Clay County Ordinance 92-22 have been met.
The Issue Whether Petitioner, IMH Healthcare, LLC, was required to submit an application for acquisition of Westport Holdings Tampa, L.P., d/b/a University Village, a specialty insurer licensed to operate a facility that undertakes to provide continuing care, pursuant to section 628.4615, Florida Statutes, and, if so, whether Petitioner has proven its entitlement to approval of the acquisition application.
Findings Of Fact The Department of Financial Services (Department) is the agency of the State of Florida having authority, among its other duties and responsibilities, to enforce the provisions of the Florida Insurance Code. The Financial Services Commission is a separate and independent budget entity within the Department composed of the Governor, the Attorney General, the Chief Financial Officer, and the Commissioner of Agriculture. § 20.121(3), Fla. Stat. The OIR is the agency within the Financial Services Commission responsible for all activities concerning insurers and other risk-bearing entities as provided under the Florida Insurance Code. § 20.121(3)(a)1., Fla. Stat. Westport Holdings Tampa, L.P. (Westport), is a limited partnership formed and existing under the laws of the State of Delaware. Westport operates the University Village continuing care retirement community (CCRC) in Hillsborough County, Florida. IMH Healthcare, LLC, is a limited liability corporation formed on March 24, 2014, and is in good standing under the laws of the State of Delaware. CCRCs offer a continuum of services that generally consist of independent living units, assisted living units, and skilled nursing care on a single campus. Persons choosing to live in a CCRC will typically start out in an independent living unit. As their needs change, they may move to an assisted living unit in which they may receive assistance and supervision for their activities of daily living. As residents of the CCRC transition to needing more care due to age, injury, or infirmity, they are entitled to care in the skilled nursing facility. In order to become a resident of a CCRC, a person enters into an individual continuing care contract with the CCRC. That contract, which includes an up-front entrance fee, part of which may be refundable, and monthly payments, is treated as the equivalent of a policy of insurance. Therefore, the owners and operators are regulated as “specialty insurers” and are required to obtain certificates of authority from OIR. Westport currently holds a certificate of authority to operate the University Village CCRC pursuant to chapter 651, Florida Statutes. University Village accommodates the spectrum of care at a single campus. Independent living facilities consist of 446 apartments in two multi-story apartment buildings known as the Towers, and 46 patio homes known as the Villas. The assisted living facility and skilled nursing facility, which includes a memory care facility, are housed in a three-story facility, generally known as the “health center,” located across the street from the independent living facilities. The skilled nursing facility, containing 120 beds, is located on the first floor, with the remaining 110 assisted living units located on the second and third floors. University Village currently has more than 400 residents. A person seeking to acquire a “triggering” ownership interest in a CCRC with an existing certificate of authority must file an application for acquisition under section 628.4615. The application is subject to review under statutory criteria designed to ensure the protection of the residents and the public. Westport has two partnership percentage interests; a 99-percent limited partnership interest, and a one-percent general partnership interest. Westport is governed by the Westport Holdings Tampa Limited Partnership Limited Partnership Agreement, dated October 23, 2000, as subsequently amended. Prior to March 2014, Westport Holdings University Village, LLC, held the one-percent general partnership interest and Westport Senior Living Investment Fund, L.P. (WSLIF) held the 99-percent limited partnership interest. Larry Landry was the president and sole manager of both entities. During the period leading up to the filing of the acquisition application by Petitioner, management of University Village was performed by AgeWell Senior Living, LLC. The executive director was Tim Parker, who had served in that role for a lengthy period. In 2006, Westport entered into two notes payable totaling $32,250,000, both of which related to and were secured by University Village. The original maturity date of both loans was January 2010. The maturity date was extended to January 2012 by the original lender, Capmark Bank, conditioned, in part, on a $10 million principal reduction payment. In August 2012, Horizon LP UV Lender, LLC (Horizon), purchased the debt, the obligations of which Westport was not keeping current. The maturity date was extended by agreement multiple times, with the last extension expiring December 15, 2013. By 2013, OIR had become concerned with the lack of funds to catch up on deferred maintenance to the University Village buildings, which included extraordinary maintenance to roofs and chillers, HVAC equipment, and the like, and with the amount maintained in reserve for the deferred maintenance and refunds. By February 28, 2014, the amount of refunds payable was estimated at $1.7 million. In early to mid-2013, BVM Management, Inc. (BVM Management) became interested in acquiring the 99-percent limited partnership interest in Westport. BVM Management is a 501(c)(3) charitable purpose corporation. It holds assets in affordable housing and senior housing, and offers consulting services to approximately 40 skilled nursing facilities and continuing care retirement communities. BVM Management’s president is John W. Bartle, whose scope of work includes identifying special assets that are in some event of foreclosure or distress, usually with banks or bankruptcy courts, receiverships, and conservatorships. In mid-2013, Mr. Landry and Mr. Bartle, among others, met with representatives of OIR to discuss the proposed acquisition of Westport’s 99-percent limited partnership ownership interest by BVM Management. By that time, OIR was very engaged in the status of University Village, monitoring its operations on almost a monthly basis. It was discussed that the acquisition would allow for the infusion of capital into Westport and University Village to address OIR’s concerns. During that meeting, a decision as to whether the acquisition of Westport’s 99-percent limited partnership interest would trigger a requirement for the purchaser to file an acquisition application was deferred. BVM Management undertook to arrange for the issuance of tax-exempt bonds to raise the capital to acquire Westport’s 99-percent limited partnership interest and provide funding to meet OIR’s concerns. On August 11, 2013, BVM Management/Westport Holdings, L.P., entered into a Limited Partnership Purchasing Agreement to purchase WSLIF’s 99-percent limited partnership interest in Westport. On December 6, 2013, OIR advised Mr. Landry “that if BVM buys the [99-percent] limited partnership interest of Westport Holdings Tampa, LP, that it would not be required to file an acquisition application.” However, OIR requested the submission of a Corrective Action Plan to address BVM’s “financial stability, debt structure, the management company, marketing efforts, etc.” The parties to the Limited Partnership Purchasing Agreement attempted to close before the December 15, 2013, loan maturity date expiration. However, due to the inability of the bond underwriter to deliver tax exempt bonds at the expected price, the closing did not occur. As a result of the failure to close the sale of the 99-percent ownership interest, Horizon began to pursue foreclosure. Before that occurred, Horizon issued a forbearance through March 31, 2014. After consultation with the accounting firm that was performing the feasibility study and market study, Mr. Bartle contacted lenders that might be interested in financing the University Village property. He approached USAmeriBank and Columbia Pacific Investment Fund (CPIF) Lending, LLC, with a structure for financing that would require additional limited partners as purchasers instead of BVM Management. Thereafter, BVM Management located investors interested in purchasing Westport’s 99-percent limited partnership interest. On March 29, 2014, a Promissory Note was entered which provided that its $1 million principal sum and interest would be paid to “Westport Senior Investment Fund, Limited Partnership, . . . attention Larry L. Landry,”1/ either upon delivery by BVM University Village, LLC, of “the Second 2014 Amendments to the Limited Partnership Agreements of Westport Holdings Tampa Limited Partnership . . . and Westport Tampa II, Limited Partnership,” by which the general partnership interest would be transferred, or upon the Note’s July 1, 2014, maturity date. At the time, pursuant to a conditional Partnership Interest Transfer Agreement, it was anticipated that the Westport one- percent general partnership interest would be transferred from Westport Holdings University Village, LLC, to BHMSILFGP, LLC. On March 31, 2014, WSLIF sold its 99-percent limited partnership interest in Westport to a group of limited partners. Westport Holdings University Village, LLC, retained its one-percent interest in Westport as the general partner. The one-percent general partnership interest was not transferred to BHMSILFGP, LLC. The sale of the limited partnership interest was memorialized in the First 2014 Amendment of Limited Partnership Agreement (Tampa), by which the limited partnership interest was sold and conveyed by WSLIF to BVM University Village, LLC. Immediately thereafter, and as part of the same transaction, the 99-percent limited partnership shares were allocated to the limited partners as follows: BVM University Village, LLC -- 39.6% BHMSILF, LLC -- 26.4% IMH Healthcare, LLC -- 19.8% JF Consultants, LLC -- 13.2% Pursuant to the First 2014 Amendment of Limited Partnership Agreement (Tampa), a majority interest of the four limited partners are entitled to remove Westport’s general partner, approve or disapprove the appointment of a successor general partner, dissolve the partnership, and amend the limited partnership agreement. Also on March 31, 2014, the limited partners authorized Westport to enter into two loan agreements, the proceeds from which were used to retire existing debt, to fund repairs and renovations of independent living units, and for other purposes related to the CCRC. As part of the loan transactions, Westport Nursing, LLC, was “spun off” of Westport as an accommodation of the loan agreement with USAmeriBank described below. It is not known if that transaction was reported to OIR, and it was not explained whether the transaction affected Westport’s certificate of authority to operate the University Village CCRC. One loan, in the amount of $9.5 million, was taken out by Westport Holdings Tampa, L.P., and Westport Holdings Tampa II, L.P. The lender was CPIF Lending, LLC. The loan was secured by a mortgage on the independent living facilities. Loan proceeds of $5.6 million were used to pay existing mortgage debt, and loan proceeds of $1.75 million were disbursed to a “capital expenditure reserve” for facility improvements in the form of “replacements and alterations.” The remaining proceeds went to various expenses, including $1 million to the seller of the partnership interest. The other loan, in the amount of $15 million, was taken out by Westport Nursing, LLC. The lender was USAmeriBank. Proceeds were to be used for the benefit of the assisted living and nursing care facility. The loan was also used to fund $3 million of “minimum liquid reserve” (MLR) for University Village, which was then pledged as cash collateral to secure the loan. The cash collateral was not contributed by BVM or the new limited partners. The owner or operator of a CCRC is required to maintain the MLR in an escrowed account to cover expenses of the CCRC in the event of financial difficulties. The MLR consists of an amount equal to principal and interest payments due during the next 12 months on any mortgage loan or other long-term financing of the facility, including property taxes; an operating reserve equal to 15 percent of the total annual operating expenses; and a renewal and replacement reserve equal to 15 percent of the facility’s average operating expenses for the past three fiscal years. An owner or operator of a CCRC may satisfy the MLR requirements by acquiring a clean, unconditional, irrevocable letter of credit equal to the sum of the three parts. The letter of credit must be issued by a financial institution participating in the State of Florida Treasury Certificate of Deposit Program, must name OIR as beneficiary, and must be approved by OIR before issuance. BVM Management, because of its more established financial footings, was required to guarantee both loans due to uncertainty on the part of the lenders as to whether University Village could “turn-around” in a two or three-year period. Neither of the loans involved any contribution or investment of cash or assets by the new Westport limited partners or BVM Management. Rather, the loans were obtained, and costs paid, by pledging the equity in the independent living facilities and the assisted living and skilled nursing health center and collateralizing cash from the existing MLR. By April 2, 2014, OIR was made aware of the acquisition of the 99-percent partnership interest in Westport by the group of limited partners, and was provided with a copy of the First 2014 Amendment of Limited Partnership Agreement (Tampa). Although far greater than 10 percent of the ownership interest in Westport was transferred as a result of the transaction, OIR did not require that the entities acquiring the 99-percent partnership interest, either individually or as a group, submit an acquisition application. On April 18, 2014, OIR sent a request to Westport for a “Corrective Action Plan” to address BVM’s purchase of the Westport limited partnership interest, the uncertainty regarding ownership of the facility, a steady increase of overdue refunds, and delayed capital improvements to the University Village campus. BVM Management was retained by Westport to extricate the existing operator of the health center by canceling the lease and moving the personnel away from the property. By the fall of 2014, OIR determined the Westport MLR was underfunded by $300,000 to $400,000. Between April and December 2014, BVM Management commissioned a physical needs assessment (PNA) of the University Village physical plant. The PNA identified approximately $2.5 million in needed improvements over a five-year period. Projected needs included repair and replacement of roofs, HVAC units, guttering, and similar structural improvements. After the acquisition of the 99-percent partnership interest in Westport by the group of limited partners, $1.6 million was spent to remodel 106 residential units, with the improvements in the nature of new appliances and cabinetry, elevator repairs, and wireless internet. The improvements, though needed, were not those identified in the PNA. From April through December 2014, Westport Holdings University Village, LLC, remained as Westport’s general partner. During that period, Mr. Landry was an infrequent visitor to the University Village campus. OIR began to receive communications from residents of University Village that Mr. Bartle was acting as a spokesperson for University Village, and had taken a visible role in facility operations and capital improvements. Improvements at the facilities and changes in University Village policies and procedures were conveyed by BVM Management to Westport’s existing managing agent, AgeWell Senior Living, LLC, which then communicated instructions to Westport’s employees. BVM Management provided many services in the independent living portion of University Village, including oversight of construction and renovation, preparation of compliance reports due to lenders, oversight of the capital expenditure budget, approval of contracts, oversight of renovations, and assisting with marketing and public relations. On December 22, 2014, BVM University Village, LLC; Westport Senior Investment Fund, L.P.; AgeWell Senior Living, LLC; Westport Holdings Tampa, L.P.; and Westport Holdings Tampa II, L.P., entered into an Amendment to Promissory Note by which the due date for payment of sums under the note was extended, and by which the parties acknowledged that the management agreement with AgeWell Senior Living, LLC, would not be renewed upon its January 31, 2015, expiration. On December 29, 2014, Westport Holdings University Village, LLC, resigned as Westport’s general partner. A copy of the resignation was provided to OIR on that same day. On December 29, 2014, after learning of the resignation of Westport Holdings University Village, LLC, as Westport’s general partner, OIR sent an email to Mr. Bartle advising him that the “person or affiliated person” assuming the role of Westport’s general partner would be required to complete and file an acquisition application pursuant to section 628.4615(2). On January 2, 2015, OIR received a letter of notification regarding the proposed appointment of BHMSILFGP, LLC, as Westport’s new general partner. The submission requested a waiver of the requirement to file an acquisition application. OIR denied the request. The March 29, 2014, Second 2014 Amendment to the Westport Holdings Tampa Limited Partnership Limited Partnership Agreement was never executed, and BHMSILFGP, LLC, did not become the Westport general partner. On January 26, 2015, Westport’s limited partners elected Compliance Concepts, LLC, as Westport’s general partner. Compliance Concepts, LLC, was the managing member of BVM University Village, LLC, a 39.6-percent limited partner of Westport. On or about February 9, 2015, Compliance Concepts, LLC, filed an acquisition application with OIR. OIR determined the acquisition application to be incomplete. On February 11, 2015, OIR commenced an examination of the Westport CCRC. An OIR field staff examiner was assigned to University Village, and provided with office space in a University Village building. Upon arrival at University Village, the OIR examiner requested the books and records of the Westport CCRC. The records were not immediately produced. The evidence suggests that the reason for the delay in production was a desire on the part of Westport to have its attorney review the documents and approve their being turned over to the OIR examiner. On February 13, 2015, OIR issued an Initial Order of Suspension to Westport. The basis for the suspension order included the failure to immediately turn over financial records, as well as the operation and management of University Village by unapproved persons. Westport challenged the suspension order, thus staying its effect. On February 20, 2015, OIR sent a notice requesting additional information regarding the Compliance Concepts, LLC, acquisition application. The response was due on February 27, 2015. The notice did not request “background information issues,” which request was to be made under separate cover. On February 26, 2015, OIR made a request to DFS for the appointment of a receiver to manage the operation and finance of the Westport CCRC. At that point, with the request being in the nature of pending litigation, OIR required that all communications or meetings between Westport and OIR be arranged through counsel. On or about March 2, 2015, Compliance Concepts, LLC, resigned as Westport’s general partner, and Petitioner was elected by Westport’s limited partners as its general partner. As such, Petitioner was assigned Westport’s one-percent general partnership interest. The assignment was not accompanied by any monetary consideration. By letter dated March 2, 2015, OIR was informed that Petitioner, a 19.8-percent limited partner, had been elected as Westport’s new general partner. The March 2, 2015, letter also advised OIR that the Compliance Concepts, LLC, acquisition application would be updated and supplemented to reflect the change of ownership of Westport and its general partner. Along with its March 2, 2015, letter, Westport provided a response to the February 20, 2015, request for additional information regarding the Compliance Concepts, LLC, acquisition application. On March 6, 2015, Petitioner filed a “Statement of Acquisition Merger or Consolidation of a Specialty Insurer Pursuant to Florida Statutes 628.4615.” Petitioner was identified as the “Acquiring Company” and Westport was identified as the “Specialty Insurer Affected.” The application was submitted as an amendment to the application for acquisition filed by Compliance Concepts, LLC. In addition to information regarding Petitioner and its managing member, Eliyahu Freiden, the application relied in large part on information submitted in the Compliance Concepts, LLC, acquisition application. Mr. Freiden is Petitioner’s sole and managing member. Petitioner has no employees. As such, Petitioner’s competence, experience, and integrity are largely and fairly attributable to Mr. Freiden. Over the course of several months, OIR received a series of organizational charts offering different descriptions of Westport’s ownership and managerial structure. The revised acquisition application contained no financial information regarding Mr. Freiden or Petitioner. Mr. Freiden signed a Waiver of Public Hearing and Request for Approval and “respectfully request[ed] that the Director of the Office of Insurance Regulation approve the acquisition immediately.” OIR did not request additional information regarding Petitioner’s acquisition application. On March 27, 2015, the OIR director issued a notice of denial of the acquisition application. The notice provided that the denial was based on Petitioner’s failure to meet the requirements for approval set forth in section 628.4615(8)(a), (8)(b), and (8)(d)-(i). Mr. Freiden’s Educational and Employment History Mr. Freiden studied Talmudic law at Neveh Zion Talmudic University in Israel. He also studied biology and business management at Touro College in Brooklyn, New York. Mr. Freiden did not obtain a degree from Touro College, or elsewhere, choosing to terminate his studies to pursue employment. Since entering the work force, Mr. Freiden has held a number of positions with various companies. From January 2000 until June 2003, Mr. Freiden was involved in marketing and sales for the Carnival cruise line. From June 2003 until May 2007, Mr. Freiden was the principal and officer of Rental Quest, LLC, a property management company. During that period, the company managed hundreds of units of real estate in Connecticut. From May 2007 to August 2008, Mr. Freiden was employed as a senior account manager for HYC Logistics, a customs clearinghouse and shipping brokerage firm. His duties included sales and office management. From August 2008 to June 2012, Mr. Freiden was a senior account manager and supervisor for Primesource National, a company engaged in managing skilled nursing facilities. His duties included financial oversight of 30 skilled nursing facilities in the Midwest, specifically regarding their budgets, expenses, purchasing, and regulatory surveys. Mr. Freiden’s duties included on-site visits to the facilities. From June 2012 to November 2013, Mr. Freiden was an analyst and office director for Greystone Financial Group, a bank in Manhattan. His duties included property loan underwriting, and management of a team of loan originators. From September 2012 to the present, Mr. Freiden has been the principal and officer of Human Assurance, LLC, a credit reporting company engaged in providing background screening for healthcare facilities, daycare facilities, employment, and multi-family rental facilities. Mr. Freiden has no criminal history or record, has never been reprimanded by an employer, and has no negative professional disciplinary history. Mr. Freiden is heavily engaged in his community at his local synagogue, with the local YMCA, and with the creation of a girls’ Jewish high school. No evidence was presented that Mr. Freiden is not of reputable and responsible character. Mr. Freiden has no specific education, expertise, or formal training in insurance, or in CCRCs. He has never applied for an insurance license or a license in the healthcare field. He is not a healthcare professional. Mr. Freiden had no experience with operating a CCRC prior to his involvement at University Village beginning in March 2015. The focus on an applicant’s education and experience is for the purpose of determining the applicant’s background in the subject. The education and experience required of an applicant must be related to the applicant’s ability to operate and manage a CCRC facility, and not merely the applicant’s ability to hire others with the necessary education and experience to perform those duties. Mr. Freiden’s Background Information Section 628.4615(8)(e) provides that “natural persons for whom background information is required [must] have such backgrounds as to indicate that it is in the best interests of the insureds of the specialty insurer and in the public interest to permit such persons to exercise control over the specialty insurer.” Petitioner submitted a biographical affidavit and a fingerprint card for Mr. Freiden. The acquisition application form provides that “[b]ackground reports must be submitted by the selected background investigator vendor directly to OIR prior to or contemporaneously with the submission of the application filing.” The background investigation must be performed by an external company that has been approved by the National Association of Insurance Commissioners. The person submitting the application must pay for the background check and contact the approved vendor who is responsible for submitting the report to OIR. The report provides, among other items, background information from court records and other sources, and is crucial as verification of the information submitted by the applicant by an approved third party. The record of this proceeding contains a report generated by Accurint, a LexisNexis company, which includes information allegedly obtained from the Florida Department of Financial Services, as well as information from an undetermined source. The record is not clear as to whether the background information was provided by Petitioner or was accessed by OIR. In either event, the information does not comply with the established standards for background information. Petitioner’s Financial Capabilities The only assets of IMH identified in the record are its limited (19.8 percent) and general (one-percent) partnership interests in University Village. IMH was formed on March 24, 2014, one week before it acquired its limited partnership interest in Westport. Since the funding of the purchase of the limited partnership interest was accomplished through loans secured by Westport’s existing facilities, and guaranteed by BVM Management, and since there was no evidence of any cash contribution by the limited partners, IMH has no apparent financial investment in Westport. As part of the revised acquisition application, IMH submitted a letter from Ark Real Estate Group, LLC, which indicated that Ark Real Estate Group, LLC, “has the capacity to provide up to $5,000,000.00 (Five Million Dollars) in capital or subordinated debt to ensure that [IMH] has sufficient liquidity to support its role as limited partner. If you would like a formal term sheet for this commitment, please advise.” The financial stability and ability of Ark Real Estate Group, LLC, to provide such funds is unknown. The letter itself is vague, and does not establish Petitioner’s ability to access cash or credit. The information provided in the acquisition application was insufficient to establish the financial condition of IMH. Other Financial Issues The 2014 audited financial statement for Westport was due May 1, 2015. Westport did not timely file an audited financial statement and had not done so as of the final hearing in this matter. Although a draft report was provided, it did not include auditor’s notes necessary to evaluate the “going concern” portion of the audit. University Village is the only CCRC in Florida that did not timely file a 2014 audited financial statement. The statutory MLR for University Village is underfunded by approximately $400,000, and has been since fall 2014. On January 21, 2015, the CFO for University Village advised OIR that the MLR “is under funded by $370,324” and that there would be “a plan in place to have this shortfall funded within 30 days.” Petitioner has not addressed the MLR deficiency since becoming Westport’s general partner, despite the statement in the March 2, 2015, Response to Clarification Letter that the deficiency would be replenished within five business days of a calculation confirming a deficiency. Westport is currently subject to a targeted financial examination by OIR. The preponderance of the evidence indicates that Petitioner has not responded to OIR inquiries and has not provided access to requested information during the financial examination. Payments to vendors supplying goods and services to University Village are approximately $1 million in arrears, with some vendor invoices being more than 60 days past due. However, no services have been denied to residents. The March 31, 2014, loans secured by the University Village facilities, which loans total $24.5 million, come due in March 2016. BVM Management BVM Management, and its president, Mr. Bartle, have been extensively engaged in the operations of Westport, starting with BVM Management’s mid-2013 interest in acquiring Westport, to its guarantee of loans to buy Westport’s 99-percent limited partnership interest, and extending to Mr. Bartle’s participation as a representative of the acquiring entities in meetings with OIR. Beginning in April 2014 and extending through October 2014, BVM Management engaged in merger discussions between Westport’s designated facility manager, AgeWell Senior Living, LLC, and BVM Management beginning in April 2014 and extending through October 29, 2014. During that period, a lot of the work being done on the campus was coordinated between AgeWell Senior Living, LLC, and BVM Management. Although AgeWell Senior Living, LLC, had the management contract and was the OIR- identified overall management agent, BVM Management was participating in the plan of finance and the rehabilitation of the facility, and was involved in “extricating” the operator of the Westport health center. During that period, AgeWell Senior Living, LLC, personnel and BVM Management personnel were working in tandem on several projects. There were up to six BVM Management employees on the campus at any one time. Although Mr. Bartle was not the most frequent BVM Management employee on the campus, he tended to go to the board meetings or the finance committee meetings, and would make presentations for the health center and its financial condition. BVM Management’s presence on the facility grounds has remained active, particularly since the termination of AgeWell Senior Living, LLC, as the CCRC manager upon the expiration of its management contract, and the termination of the long-term executive director, Tim Parker. Because of Mr. Bartle’s ongoing involvement with the operations of University Village, and BVM Management’s substantial financial ties as guarantor for the two loans, OIR sought background information on Mr. Bartle as a person indirectly involved with the management of an acquiring entity. Petitioner’s acquisition application was absent any information regarding BVM Management or Mr. Bartle. In response to its inquiries for background and biographical information, OIR received only a handwritten note with the phrase “To be sent”. No further information was provided. As a result, OIR has little information regarding Mr. Bartle’s past employment, personal information, or financial background. Management and Consulting Services - NOVUM, LLC On May 15, 2015, after Petitioner became Westport’s general partner, Westport contracted with NOVUM, LLC, for “consulting management” services for the independent living facilities (Retirement Center) of University Village. NOVUM, LLC, has a background in nursing homes. NOVUM, LLC, has management contracts “with a couple of buildings” in Florida. The context of the testimony suggests that the services are performed at assisted living facilities, but the exact nature of the facilities was not described. Services provided include day-to-day operations, installing budgets, hiring and firing staff, training and development, and ensuring regulatory compliance. NOVUM, LLC, employs persons with education in science and healthcare management, and with experience in independent living facilities, assisted living facilities, and skilled nursing facilities. NOVUM, LLC, has provided services on behalf of Westport, including accounting, financial record keeping and reporting, marketing, sales, and attendance and participation in resident board meetings. NOVUM, LLC, has been engaged in hiring recommendations, including those for the executive director, director of sales, administrator of the assisted living facility, directors of nursing, and other staff positions. NOVUM, LLC, has Westport bank account signature authority, which it exercises in paying vendors, including NOVUM, LLC, itself.2/ Mr. Freiden regularly meets with NOVUM, LLC, employees who are on the University Village campus on a daily basis. After the termination of former executive director, Tim Parker, efforts to find a replacement have proven difficult. During the vacancy, Mr. Freiden testified, in response to a question as to whether the duties of the CCRC manager’s executive director were “going unmet,” that “I feel like we've got five executive directors. Besides Marc Flores, [NOVUM, LLC’s] chief operational officer, who's there every day and myself who act in that position, everybody knows they can grab someone from NOVUM or myself at any given time and we fill those shoes very well.” The preponderance of the evidence indicates that NOVUM, LLC, is performing managerial duties for University Village as described in Florida Administrative Code Rule 69O- 193.002(13). Rule 69O-193.007 requires that “[e]ach manager or management company must demonstrate that it meets the requirements of Section 651.022, F.S., and that the management agreement conforms with the cancellation requirements of Section 651.1151, F.S.” There is no evidence that Petitioner, Westport, or NOVUM, LLC, has made the requisite demonstration that NOVUM, LLC, meets the requirements of section 651.022.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED that the Department of Financial Services, Office of Insurance Regulation, enter a final order determining that IMH Healthcare, LLC’s, acquisition of the one-percent general partner ownership interest in Westport Holdings Tampa, L.P., was insufficient to meet the threshold requirement for an acquisition application pursuant to section 628.4615(2), Florida Statutes, and that the March 27, 2015, notice of denial of acquisition application be DISMISSED. It is, furthermore, RECOMMENDED that, if it is determined that an acquisition application is required when a one-percent general partner ownership interest in a CCRC is acquired, the Department of Financial Services, Office of Insurance Regulation, enter a final order determining that IMH Healthcare, LLC, failed to meet its burden of proving entitlement to the approval of the acquisition application, and that the application should therefore be DENIED. DONE AND ORDERED this 26th day of January, 2016, in Tallahassee, Leon County, Florida. S E. GARY EARLY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of January, 2016.
The Issue Whether Amendment 15-1ACSC to the Monroe County Comprehensive Plan, adopted by Ordinances 003-2016 and 004-2016 on February 10, 2016, is “in compliance,” as that term is defined in section 163.3184(1)(b), Florida Statutes (2015).1/
Findings Of Fact The Parties The County is a political subdivision of the State of Florida with the duty and responsibility to adopt and maintain a comprehensive growth management plan pursuant to section 163.3167, Florida Statutes. Petitioners reside in, and own property within, the County. Petitioners submitted oral or written comments concerning the Plan Amendment to the County during the period of time beginning with the transmittal hearing for the Plan Amendment and ending with the adoption of the Plan Amendment. Rockland owns the property subject to the Plan Amendment and is the applicant for the Plan Amendment.4/ The Navy owns the Station in the County and submitted oral or written comments concerning the Plan Amendment to the County during the period of time beginning with the transmittal hearing for the Plan Amendment and ending with the adoption of the Plan Amendment. The Subject Property The Plan Amendment affects five different parcels of property in the Lower Keys. The parcels are owned by Rockland and are all either current or former mining sites with developed ancillary uses. Most of the property is vacant scarified land and the remainder supports warehousing and distribution facilities and related uses. Four of the parcels are located on Rockland Key (the Rockland parcels): two along U.S. Highway 1 and two on the north side of the Key along the Gulf of Mexico. Together, the four parcels total 29.59 acres. The existing FLUM designation of the parcels is Industrial, the primary purpose of which is to “provide for the development of industrial, manufacturing, and warehouse and distribution uses.” FLUE Policy 101.4.7. (2015).5/ The non-residential development potential of the property is between 322,235 and 773,364 square feet. The Industrial category also allows residential development at a density of one dwelling unit per acre (1du/acre) and a maximum of 2du/buildable acre.6/ Under the existing FLUM category, the Rockland parcels could be developed for a maximum of 47.3 residential units.7/ The parcel on Big Coppitt Key (the Big Coppitt parcel) is a narrow L-shaped 14.8-acre property bordering a former mining pit. The parcel runs north along the western boundary of Petitioners’ residential subdivision, then west along the Gulf of Mexico. Petitioners’ homes are located directly adjacent to the Big Coppitt parcel. The majority of the parcel (12.33 acres) is designated Industrial and the remainder (2.5 acres) as Mixed Use/Commercial Fishing (MCF). The non-residential development potential of the Big Coppitt parcel is between 161,498 and 365,816 square feet. Under the existing FLUM categories, the Big Coppitt parcel could be developed for a maximum of 43.7 dwelling units. Together, the subject property could be developed for a maximum of 91 dwelling units or 1.1 million square feet of non- residential uses, or some proportional mix thereof. The Plan Amendment The Plan Amendment changes the FLUM designation of the Rockland parcels from Industrial to Commercial. The Commercial FLUM category does not allow residential development, thus limiting future development of the property to between 193,341 and 644,470 square feet of non-residential uses. The Plan Amendment changes the FLUM designation on the Big Coppitt parcel to Mixed Use/Commercial (M/C), which allows residential development at a maximum density of 2-8du/acre. Under the M/C designation, the Big Coppitt parcel could be developed for a maximum of 213.6 dwelling units. Under the M/C designation, the Big Coppitt parcel has a non-residential development potential of between 64,599 and 290,697 square feet. However, the Plan Amendment also creates FLUE Policy 107.1.6, a sub-area policy applicable to the Big Coppitt parcel. The policy restricts development to deed- restricted affordable housing units (minimum mix of 10 percent median-income and at least 20 percent combination of low- and very low-income categories) and employee housing. The policy prohibits all non-residential development of the property, including dredging, and prohibits development of market-rate and transient-dwelling units. As adopted, the Plan Amendment authorizes development of up to 213 affordable housing units, no market rate units, no transient units, approximately 644,000 square feet of non- residential uses, and no dredging of the existing mining pit on the Big Coppitt parcel. Compared to the existing FLUM designations of the subject property, that is a potential increase of 114 units and a decrease of approximately 456,000 square feet of non-residential development. Naval Air Station Key West Rockland Key is located directly across U.S. Highway 1 from the Station. The Big Coppitt parcel is in close proximity to the Station. The Station’s Boca Chica airfield has been in operation since 1943. The primary mission at Boca Chica is to train pilots for air-to-air combat and to meet aircraft carrier qualifications. Fighter pilots from all over the country are trained for air-to-air combat primarily at the Station. The Station is uniquely situated to accomplish its training mission because there is little commercial air traffic and a large unencumbered airspace in close proximity to the airfield. Pilots who take off from Boca Chica quickly arrive in vast airspaces west and south of the Station for air-to-air combat training. This allows for very efficient use of fuel for training. Pilots train for aircraft carrier qualifications through field carrier landing practice at Boca Chica. Field carrier landing practice requires flying the same touch-and-go pattern at the field that the pilot would fly at an aircraft carrier. Each pilot in a squadron must fly the pattern accurately to a certain “readiness level” before the squadron can be certified to deploy. The readiness level is based on the number of sorties completed. One sortie includes at least one takeoff and one landing. Boca Chica typically operates Monday through Saturday from 8:00 a.m. to 10:00 p.m. However, the airfield operates outside of those hours, and on Sundays, when training missions dictate. The airfield averages 36,000 sorties per year. The Station is extremely valuable to the Department of Defense due to the size of the airspace, weather, lack of commercial traffic interference, and capacity for training missions. As the commanding officer of the Station, one of Captain Steven P. McAlearney’s primary duties is to protect the military value of the Station by protecting the airspace and existing operation capacity. As such, Captain McAlearney is concerned with encroachment by development incompatible with Station operations. Navy AICUZ The Navy has established a Military Installation Area of Impact (MIAI) surrounding the Station. In its most recent Environmental Impact Statement (EIS), the Navy has designated Air Installation Compatible Use Zones, or AICUZ, within the MIAI. The AICUZ are mapped as noise contours extending outward from the Station. Each contour indicates a range of day- night average noise levels (DNL) which are expected to impact properties within the specific contour. The AICUZ map is accompanied by a Land Use Compatibility Table (the table) containing recommendations for compatibility of various land uses within the specific noise contours. According to the table, residential land uses are “generally incompatible” in both the 65-69 and 70-74 DNL zones, also referred to as “noise zones.” The Navy discourages residential use in DNL 65-69 zones, and strongly discourages residential use in DNL 70-74 zones. The table deems residential use in the 75-79 DNL zone as “not compatible” and recommends local government prohibit residential use in those zones, also referred to as “incompatibility zones.” FLUE Policy 108.2.5 On May 22, 2012, the County adopted FLUE Policy 108.2.5, which took effect on July 25, 2012. The Policy, which is lengthy and is not set forth in full herein, generally prohibits applications to change FLUM designations within the MIAI after the Policy’s effective date. However, the Policy sets forth a procedure by which FLUM amendment applications “received after the effective date of this [p]olicy,” which increase density or intensity within the MIAI, may be approved. The procedure requires the County to transmit the application to the Navy for a determination of whether the property subject to the application is within a noise zone or an incompatibility zone, and whether the proposed density or intensity is incompatible with Station operations. If the Navy determines an application is within an incompatibility zone, the Policy requires the County to determine whether appropriate data and analysis supports that determination, and, if so, maintain the existing designation. Additionally, the Policy states that “Monroe County shall encourage the Navy to acquire these lands . . . for the protection of the public health, safety, and welfare of the citizens of the Florida Keys.” If the Navy determines an application is within a noise zone, the Policy requires the applicant to submit a supplemental noise study, based on “professionally acceptable methodology,” to establish whether the property is within a 65 DNL or higher zone. The Navy has nine months from receipt of the supplemental noise study to provide comments to the County concerning whether the noise study is based on professionally accepted methodology. After receipt of the Navy’s comments, the County may allow the application to proceed through the public hearing process, but must also adopt a resolution determining whether the property subject to the application is subject to the density and intensity restrictions within the MIAI. Affordable Housing The parties stipulated that the County has a demonstrated community need for affordable housing. A 2014 study projected a deficit of 6,500 affordable units in the City of Key West alone. In 2013, 51 percent of all County households were “cost-burdened,” meaning they paid more than 30 percent of their income for housing. That figure compares to 43 percent of cost-burdened households statewide. In the County, more than half of renters are cost- burdened and about 45 percent of home owners are cost-burdened. The lack of affordable housing in the County is exacerbated by four factors: high land values; geographic and environmental limitations on development; artificially- controlled growth of housing supply8/; and a tourist-based economy which drives lower paying service-sector jobs. The lack of affordable housing impacts not only the tourism industry, but also public-sector agencies, including the school system, emergency management, and even the County’s Planning and Environmental Resources Department. Lack of affordable housing makes it harder to recruit and retain school teachers, police, and firefighters, among other public-sector employees. High turnover rates in these areas present budget and personnel challenges for the County. The County has 460 existing affordable housing units for the very-low, low-, and median-income households, and 354 units for moderate-income households (a combination of rental and owner-occupied units). The greatest percentage of existing affordable housing units is deed-restricted for the moderate-income range. The yearly income limit for a three-person household (a couple with a child) in the very-low income category is $52,400; the low-income category is $83,800; and the median- income limit is $104,800. The moderate-income level maximum is $125,760 for rental, and $167,680 for owner-occupied. The County has approximately 700 affordable housing units to be allocated through the year 2023. The Plan Amendment Application On May 18, 2012, Rockland applied for a FLUM amendment which included the Rockland parcels, but did not include the Big Coppitt parcel. The application affected 141 acres (approximately 77 upland acres). As proposed, the application would have allowed development of a maximum of 385 dwelling units, 1,155 transient rooms (or spaces), and 500,940 square feet of non-residential uses, or some proportional mix thereof. The application was reviewed by the County’s development review committee (DRC) on November 27, 2012, which recommended denial due to the density and intensity impacts. Largely in response to the DRC’s concerns, and after lengthy discussions with County staff, Rockland submitted revisions to its application on April 1, 2014. The revisions greatly reduced the overall size, as well as the density and intensity impacts of, the proposed amendment. The revised application included the Big Coppitt parcel for the first time. Rockland revised the application again on June 17, 2014, to reflect the same proposed acreages and designations as the approved Plan Amendment. The application, as amended on June 17, 2014, was approved by both the DRC and the County Planning Commission. On December 10, 2014, the Board of County Commissioners voted to transmit the application to the state land planning agency, the Department of Economic Opportunity (DEO), pursuant to section 163.3184(4).9/ On March 20, 2015, DEO issued its Objections, Recommendations, and Comments (ORC) report objecting to the Plan Amendment, particularly the increased residential development potential on the Big Coppitt parcel. The ORC report included the following relevant objections: The Plan Amendment is inconsistent with policy 108.2.6, which adopts the MIAI Land Use Table, designating residential uses as “generally incompatible” in the 65-69 DNL zone. The Big Coppitt parcel lies within the 65-69 DNL zone where residential use is discouraged. The Land Use Table notes that “[a]lthough local conditions regarding the need for affordable housing may require residential uses in these [z]ones . . . . The absence of viable alternative development options should be determined and an evaluation should be conducted locally prior to local approvals indicating that a demonstrated community need for the residential use would not be met if development were prohibited in these [z]ones.” While the applicant supports the application by arguing that it will support a multi- family affordable housing development, nothing in the amendment provides assurance that any future residential development on this property will be for affordable housing. While there is a shortage of affordable housing in the County, especially in the lower keys, there is no shortage of vacant lots with density for housing. The County failed to establish that, “in the absence of viable alternative development . . . a demonstrated community need for the residential use would not be met if development were prohibited” on the parcel. The [Big Coppitt] parcel is entirely within the Coastal High Hazard Area (CHHA) and therefore, inconsistent with Monroe County comprehensive plan policy 101.14.1, which states, “Monroe County shall discourage developments proposed within the [CHHA].” The [Big Coppitt] parcel is very narrow and development of the area adjacent to the mine pools could have negative water quality impacts on the tidally influenced mining pool and is inconsistent with the Principles for Guiding Development in the Florida Keys. After consideration of the ORC report, Rockland submitted a text amendment application creating FLUE Policy 107.1.6 to restrict development on the Big Coppitt parcel to affordable housing. In addition, the sub-area policy requires noise attenuation of all habitable buildings in the 65-69 DNL to an indoor noise level reduction of at least 25 decibels (25dB). Similarly, the Policy requires noise attenuation of habitable buildings within the 70-74 DNL zone to achieve an indoor noise level reduction of at least 30dB. The amendment to the FLUM remained the same. The County adopted both the FLUM amendment, and the text amendment creating Policy 107.1.6, on February 16, 2016, and forwarded the Plan Amendment to DEO for review, pursuant to 163.3184(4)(e)2. On April 25, 2016, DEO issued a notice of intent to find the Plan Amendment “in compliance.” The instant Plan Amendment challenge followed. Petitioners’ Challenge Petitioners allege two bases on which the Plan Amendment should be found not “in compliance.” First, Petitioners allege the Plan Amendment is internally inconsistent with Plan Policies 108.2.5 and 101.14.1, in violation of section 163.3177(2), which states that “[c]oordination of the several elements of the [Plan] shall be a major objective of the planning process. The several elements of the comprehensive plan shall be consistent.” Second, Petitioners allege the Plan Amendment is inconsistent with the Principles, in violation of section 163.3184(1)(b). That statute requires all plan amendments in the Keys Area of Critical State Concern (ACSC) be consistent with the applicable principles. Policy 108.2.5 Petitioners allege that Policy 108.2.5 applies to the Plan Amendment because the application was filed after Policy 108.2.5 took effect on July 25, 2012. If proven, Policy 108.2.5 would require the applicant to follow the procedure for approval of residential density in the noise zones, including submission of a supplemental noise study and a legislative finding as to whether the Plan Amendment is subject to the density and intensity restrictions in the MIAI. Rockland’s original application for the Plan Amendment was made on May 18, 2012, prior to the effective date of Policy 108.2.5. Petitioners argue that the revised application on April 1, 2014, should be considered a new application subject to Policy 108.2.5 because it was made two years after adoption of the Policy and contained significant substantive changes to the original application. In essence, Petitioners argue that the 2014 revised application (and subsequent changes thereto) constitute a new and different application than the May 2012 application. Petitioners introduced no evidence that any administrative provision of the Plan, or any other County ordinance or regulation, provides for expiration of an application for plan amendment after a specified time period. The April 2014 changes were filed with the County in strike-through/underline (legislative format) as “revisions to its FLUM amendment application.” The June 17, 2014, changes were likewise filed in legislative format as “additional revisions to its FLUM amendment application.” One of the main reasons for delay between the May 2012 application and the April 2014 revisions was County staff’s recommendation that the Rockland parcels be rezoned to the Commercial-2 (C-2) zoning category, a category which was being created and would be consistent with the Commercial FLUM category. Staff recommended the category because it would prohibit residential uses but allow Rockland to proceed with plans for commercial and retail development of the formerly industrial property. The C-2 zoning category was not finalized and adopted by the County until early 2014. The application, as revised in June 2014, was not reviewed again by the DRC, but was set for hearing by the Planning Commission on August 27, 2014, and considered by the County Commission on December 10, 2014, which approved the application for transmittal. Rockland was not required to pay a second application fee for the revised application in 2014; however, the County charged Rockland an additional fee to cover a second hearing before both the Planning Commission and the County Commission. The County’s director of planning and environmental resources, Mayte Santamaria, testified that it is not unusual for delays to occur between initial applications for, and final adoption of, plan amendments. Some applicants request an application be put on hold while they address issues with surrounding property owners. Other times, significant changes are made in the interim, especially in response to concerns raised by the state land planning agency, which take time to draft and refine. In neither case does the County consider the passage of time to require a new application. Likewise, the revisions do not require a new application, even revisions which remove property from, or add property to, a FLUM amendment application. Clearly, Petitioners believe it was unfair to allow the application, which was “on hold” for almost two years and revised in 2014 to exclude some of the original property, and include additional property adjacent to their subdivision, to proceed without applying newly-adopted plan policies. Despite their belief, Petitioners did not prove that the application, as revised in April and June 2014, was a new application subject to Policy 108.2.5. Policy 101.14.1 Next, Petitioners allege the Plan Amendment is internally inconsistent with Policy 101.14.1, which provides that the “County shall discourage developments within the Coastal High Hazard Area (CHHA).” The subject property is located entirely within the CHHA. In fact, Ms. Santamaria testified that “almost the entire Keys is in the [CHHA],” with exception of some areas just along U.S. Highway 1 in the Upper Keys. The Plan Amendment reduces total potential non- residential intensity on the subject property, while increasing potential residential density. The Plan Amendment also eliminates future transient (hotel and motel) density, as well as future dredging and other industrial uses. “Development” is defined broadly in section 380.04 as “the carrying out of any building activity or mining operation, the making of any material change in the use or appearance of any structure or land, or the dividing of land into three or more parcels.” § 380.04(1), Fla. Stat. The definition specifically includes “a change in the intensity of use of land, such as an increase in the number of dwelling units . . . on land or a material increase in the number of businesses, manufacturing establishments, offices, or dwelling units . . . on land.” § 380.04(2)(b), Fla. Stat. Notably, the definition also includes “mining or excavation on a parcel” and “deposit . . . of fill on a parcel of land.” § 380.04(2)(c) and (d), Fla. Stat. Two expert witnesses testified regarding whether the Plan Amendment violates the County’s policy to discourage development within the CHHA. In Ms. Santamaria’s opinion, the Plan Amendment, on balance, is consistent with the policy to discourage development because it prohibits residential development of the Rockland parcels, and prohibits all but affordable housing units on the Big Coppitt parcel. In addition, the amendment prohibits future uses which are within the statutory definition of “development,” such as industrial, marinas, market-rate housing, and residential subdivisions. Max Forgey, expert witness for Petitioners, opined that the increase in density from 91 to 213 units is “as far from discouraging as I could imagine.” Overall, the Plan Amendment reduces non-residential intensity while increasing residential density. Given the totality of the evidence, it is reasonable to find that the Plan Amendment complies with Policy 101.14.1 by discouraging many types of development allowed on the property under the existing FLUM designations. Principles for Guiding Development Petitioners’ final argument is that the Plan Amendment is inconsistent with the Principles in the Keys ACSC. The property subject to the Plan Amendment is located in the Keys ACSC, thus, subject to the Principles in section 380.0552(7), which reads as follows: (7) PRINCIPLES FOR GUIDING DEVELOPMENT.— State, regional, and local agencies and units of government in the Florida Keys Area shall coordinate their plans and conduct their programs and regulatory activities consistent with the principles for guiding development as specified in chapter 27F-8, Florida Administrative Code, as amended effective August 23, 1984, which is adopted and incorporated herein by reference. For the purposes of reviewing the consistency of the adopted plan, or any amendments to that plan, with the principles for guiding development, and any amendments to the principles, the principles shall be construed as a whole and specific provisions may not be construed or applied in isolation from the other provisions. However, the principles for guiding development are repealed 18 months from July 1, 1986. After repeal, any plan amendments must be consistent with the following principles: Strengthening local government capabilities for managing land use and development so that local government is able to achieve these objectives without continuing the area of critical state concern designation. Protecting shoreline and marine resources, including mangroves, coral reef formations, seagrass beds, wetlands, fish and wildlife, and their habitat. Protecting upland resources, tropical biological communities, freshwater wetlands, native tropical vegetation (for example, hardwood hammocks and pinelands), dune ridges and beaches, wildlife, and their habitat. Ensuring the maximum well-being of the Florida Keys and its citizens through sound economic development. Limiting the adverse impacts of development on the quality of water throughout the Florida Keys. Enhancing natural scenic resources, promoting the aesthetic benefits of the natural environment, and ensuring that development is compatible with the unique historic character of the Florida Keys. Protecting the historical heritage of the Florida Keys. Protecting the value, efficiency, cost- effectiveness, and amortized life of existing and proposed major public investments, including: The Florida Keys Aqueduct and water supply facilities; Sewage collection, treatment, and disposal facilities; Solid waste treatment, collection, and disposal facilities; Key West Naval Air Station and other military facilities; Transportation facilities; Federal parks, wildlife refuges, and marine sanctuaries; State parks, recreation facilities, aquatic preserves, and other publicly owned properties; City electric service and the Florida Keys Electric Co-op; and Other utilities, as appropriate. Protecting and improving water quality by providing for the construction, operation, maintenance, and replacement of stormwater management facilities; central sewage collection; treatment and disposal facilities; the installation and proper operation and maintenance of onsite sewage treatment and disposal systems; and other water quality and water supply projects, including direct and indirect potable reuse. Ensuring the improvement of nearshore water quality by requiring the construction and operation of wastewater management facilities that meet the requirements of ss. 381.0065(4)(l) and 403.086(10), as applicable, and by directing growth to areas served by central wastewater treatment facilities through permit allocation systems. Limiting the adverse impacts of public investments on the environmental resources of the Florida Keys. Making available adequate affordable housing for all sectors of the population of the Florida Keys. Providing adequate alternatives for the protection of public safety and welfare in the event of a natural or manmade disaster and for a postdisaster reconstruction plan. Protecting the public health, safety, and welfare of the citizens of the Florida Keys and maintaining the Florida Keys as a unique Florida resource. (emphasis added). Petitioners’ challenge, as set forth in the Amended Petition, focuses on subsections (7)(a), (b), (e), and (h)4. Petitioners introduced no evidence to support a finding that the Plan Amendment is inconsistent with either subsection (7)(a), (b), or (e) regarding the local government’s capability to manage land use and development, protect shoreline and marine resources, and protect water quality, respectively. 1. section 380.0552(7)(h)4. Petitioners argue that the Plan Amendment will adversely impact the “value, efficiency, cost-effectiveness, and amortized life” of the Station, in violation of subsection (7)(h)4. A portion of the Rockland parcels lie within the 75-79 DNL zone, in which the Navy deems residential development incompatible and recommends that the local government prohibit it. The Plan Amendment changes the FLUM designation of the Rockland parcels from Industrial, which allows residential development at 47.3du/acre, to Commercial, which does not allow any residential development. Thus, the Plan Amendment prohibits future residential development in the 75-79 DNL zone as recommended by the Navy. A portion of the Rockland parcels and the southern end of the Big Coppitt parcel lie within the 70-74 DNL zone. The remainder of the Big Coppitt parcel lies within the 65-69 DNL zone. The Navy deems residential development in the 70-74 and 65-69 DNL zones as “generally incompatible,” but not prohibited. The AICUZ table strongly discourages residential use in the 70-74 DNL zone, and discourages residential use in the 65-69 DNL zone. With respect to the 65-69 and 70-74 DNL zones, the AICUZ contains the following recommendations: The absence of viable alternative development options should be determined and an evaluation should be conducted locally prior to local approvals indicating that a demonstrated community need would not be met if development were prohibited in these zones. * * * Where the community determines that these uses must be allowed, measures to achieve an outdoor to indoor [noise level ratio or] NLR of at least 25 decibels (dB) in DNL 65 to 69 and NLR of 30 dB in DNL 70 to 74 should be incorporated into building codes and be in individual approvals . . . . Normal permanent construction can be expected to provide a NLR of 20 dB, thus the reduction requirements are often stated as 5, 10, or 15 dB over standard construction . . . . The Plan Amendment, through the sub-area policy, prohibits residential dwellings on that portion of the Big Coppitt parcel within the 70-74 DNL zone. As such, the Plan Amendment prohibits residential use where the Navy strongly discourages said use. The majority of the Big Coppitt parcel lies within the 65-69 DNL zone. The Plan Amendment increases allowable residential density from 91 units to 213 units. Through the sub-area policy, the Plan Amendment requires sound attenuation of at least 25 dB for residences in the 65-69 DNL zone. Further, the Plan Amendment requires sound attenuation of at least 30 dB for any habitable buildings within the 70-74 DNL zone.10/ One purpose of recommending sound attenuation for dwelling units within noise zones of 65 DNL and higher, is to limit the number of community noise complaints to the Station. Community complaints regarding noise from Station exercises are directed to the Station’s Air Operations Department. The Station receives an average of 10 complaints per month, but that number fluctuates with the number of squadrons in town for training at the Station. Sometime in the past, the Station altered a training flight arrival pattern known as the Dolphin One Arrival. The arrival pattern is now called the King One, and it avoids directly flying over Stock Island. The evidence did not clearly establish whether the pattern was changed due to community noise complaints or due to the fact that Stock Island was in residential use. Captain McAlearney testified that because of the population on Stock Island, we set up a little to the south of what would be optimum for practicing, or most safe, frankly, for practicing a carrier landing or bringing a formation of airplanes into the field. On cross-examination, Captain McAlearney admitted that the change occurred well before his time as station commander and that he had no direct knowledge of the reason the change was made. Petitioners argue that the County must do more than just establish a community need in order to approve new housing in the 65-69 DNL zone consistent with the Navy recommendations. They argue that, pursuant to the AICUZ table, the County must establish that no viable alternative development options exist and that the demonstrated community need would not be met if development were prohibited in that zone. The County conceded that other parcels are available for construction of affordable housing within the Keys, however, there are very limited locations of Tier III,11/ scarified properties, outside of the 65-69 DNL zone in the Lower Keys with potential for affordable housing development. The parcels are scattered and none would support a large-scale affordable housing development such as is proposed pursuant to the Plan Amendment. While the County’s demonstrated need for affordable housing may be met, eventually, by incremental development of smaller scattered parcels and occupancy in renovated mobile home parks, the Plan Amendment addresses a significant amount of the affordable housing deficit in the immediate future. Based on the totality of the evidence, Petitioners did not demonstrate that the Plan Amendment is inconsistent with section 380.0552(7)(h)4. In reviewing and recommending adoption of the Plan Amendment, County staff carefully considered the recommendations of the Navy AICUZ table and revised the amendment to prohibit residential use in the 75-79 DNL zone, where the Navy deems those uses incompatible and recommends prohibition of said uses; and to prohibit residential use in the 70-74 DNL zone, where the Navy deems those uses generally incompatible and strongly discourages them. The Plan Amendment was crafted to limit residential use to those areas within the 65-69 DNL zone, where Navy discourages, but does not recommend prohibition of, residential uses. Further, County staff determined a local community need for affordable housing, determined that the need could not be addressed through viable alternatives, and required sound attenuation as recommended by the Navy. While the Navy introduced some evidence regarding potential impacts to the Station from increased residential density on Big Coppitt Key, the evidence was speculative. Captain McAlearney’s testimony did not establish that additional noise complaints (assuming the new development would generate new noise complaints) would negatively impact the “value, efficiency, cost-effectiveness, and amortized life” of the Station. 2. section 380.0552(7)(g) Although not included in their Amended Petition, Petitioners argued at hearing that the Plan Amendment was inconsistent with section 380.0552(7)(g), the Principle to “protect[] the historical heritage of the Florida Keys.” Petitioners’ expert based his opinion of inconsistency with this principle on the long-standing presence of the Station in the Keys and its important role in naval air training. No evidence was introduced to establish that the Station itself has a historic resource designation or contains any historic structures or archeological resources. The site is not designated as an historic resource by either the County or the State. Petitioners did not prove the Plan Amendment is inconsistent with this Principle. Other Principles A. section 380.0552(7)(l) Section 380.0552(7)(l) sets forth the Principle to “[make] available adequate affordable housing for all sectors of the population in the Florida Keys.” The Plan Amendment limits development of the Big Coppitt parcel to deed-restricted affordable housing and requires, at a minimum, a mix of at least 10 percent median- income category and at least 20 percent mix of very-low and low- income categories. The Plan Amendment would allow development of 213 of the 700 affordable housing units the County has to allocate through 2023. The Plan Amendment addresses affordable workforce housing needs in the County for income levels in both the service industry and the public sector. The Plan Amendment furthers section 380.0552(7)(l) by making available affordable housing for residents in a range of income levels from very low- and low-income to moderate-income. B. Remaining Principles The majority of the remaining Principles either do not apply to the Plan Amendment, or have only limited application. Very little evidence was introduced regarding these Principles. No evidence supports a finding that the Plan Amendment is inconsistent with the remaining Principles. The evidence did not establish that the Plan Amendment is inconsistent with the Principles as a whole.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Economic Opportunity enter a final order determining that the Monroe County Comprehensive Plan Amendment adopted by Ordinances 003- 2016 and 004-2016 on February 10, 2016, is “in compliance,” as that term is defined in section 163.3184(1)(b), Florida Statutes. DONE AND ENTERED this 9th day of August, 2016, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of August, 2016.
