The city of Miami may pay upwards of $100 million due to a ruling in a Miami circuit court last week. A judge found that the developer of Island Gardens did not default on agreements to create a resort and megayacht marina on the publicly owned Watson Island.
Flagstone Island Gardens, the developer, filed a $122-million lawsuit against the city last summer. It did so shortly after city commissioners unanimously declared it in breach of its contract to develop the island. The vote therefore was an eviction notice. (This, despite city attorneys warning against the move.) The city had issued a ground lease to Flagstone to create two hotels, retail shops, restaurants, and a megayacht marina back in 2001. Island Gardens currently features a megayacht marina, which opened in early 2016. (The Deck, a restaurant which opened in June 2016, has closed.) In May 2017, excavation began on creating a parking garage and retail areas.
This excavation was a central part of the city’s vote, and Flagstone’s lawsuit. City commissioners alleged that the company failed to prove it had the funds to create the garage and retail space before digging started. However, Miami’s administrators had already accepted an affidavit from Flagstone, declaring it did indeed have proper finances. Miami-Dade circuit judge William Thomas sided with Flagstone, stating the city did not prove its case. In addition, Thomas ruled that Flagstone did not default its contract. Furthermore, he added, even if a default occurred, the city did not provide Flagstone time to address it.
The $122-million sum in the lawsuit represents what Flagstone says it’s spent on development. Despite losing the lawsuit, the city isn’t required to pay damages just yet. The judge said his ruling was purely on liability. A future hearing, not yet set, will determine the damages.
The city commissioners may appeal the ruling.
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