Key West should renegotiate its cruise ship contract with Pier B rather than try to restrict the operations of a private business, the city’s new cruise ship attorney advised its elected officials at Monday’s workshop.
The cruise ship meeting packed City Hall and drew comments from more than 40 speakers on both sides of the debate, but ultimately hinged on a familiar question:
Does the city of Key West have the legal authority to ban most cruise ships from the privately owned Pier B marina?
After hearing from the public, the city’s seven elected officials looked to their lawyers for an answer.
The advice they received came from attorney Ed Pozzouli, CEO of Tripp Scott Law, who was hired by the city to help legislate and defend its voter-approved cruise ship restrictions.
“I could not advise you to put into ordinance a mirror image of the voter referendums without you understanding the potential liability, but I believe we could get close through other means,” Pozzouli told the city commission.
“There’s a long-standing contract with Pier B, and it’s not just a contract, but a formal development agreement. It runs through 2025 and is subject to an automatic renewal of 10 years….You’re governed now by that development agreement with Pier B.”
“You may consider directing us, your attorneys, to engage in formal discussions to amend that agreement,” Pozzouli said after outlining some of the challenges the city would face in attempting to restrict Pier B’s cruise ship business, which the city authorized and encourages in the development agreement that also provides the city with 25% of Pier B’s annual cruise ship revenues.
“At the very least, I’d direct your legal counsel to formally modify that Pier B agreement,” Pozzouli said, also suggesting that the commission direct its attorneys to “draft an ordinance that we feel is workable from a legal liability protection standpoint.”
He added that other Florida ports have managed to implement “reasonable restrictions” on ships, and promised to return late next month with further research into those restrictions.
“I think what you’re proposing is probably where we need to be,” Commissioner Jimmy Weekley said, while emphasizing the urgency of the matter. “During this process, can we implement a stay on ships coming into Pier B?”
“Could you? Yes. Do I think you have legal grounds to do it? No,” Pozzouli answered. “I’d rather spend your fees working toward a resolution rather than fighting litigation.”
Pozzouli outlined the research his team has conducted thus far into Key West’s cruise ship issue. He said they have met with representatives from Pier B and from the Key West Committee for Safer Cleaner Ships, which has spearheaded the cruise ship reductions, and with each city commissioner. They also read the proposed legal defense for the new ship restrictions at Pier B, which was drafted by SCS attorney Joe Jacquot.
“Mr. Jacquot is a personal friend,” Pozzouli said. “When he drafted that defense, he had not reviewed the development agreement between the city and Pier B.”
Trouble with Tallahassee
Pozzouli also pointed to two pending bills in Tallahassee that, if passed, would make it easier for local businesses to file suit against a city if they’re financially hurt by local ordinances.
“To be blunt, Key West was mentioned at both hearings, when both bills passed their first steps,” Pozzouli said.
The commissioners and mayor expressed resentment over the automatic renewals included in the Pier B agreement, which was drafted by prior attorneys and approved by prior commissioners. They also criticized the state legislature for eliminating “home rule” and frequently preempting, or voiding, legislation passed by local governments.
“I don’t feel like we have any representation in Tallahassee,” Weekley said.
The seven lawmakers restated their commitment to honoring the will of the voters, but also acknowledged the significance of the Pier B agreement, the legal liability associated with violating it and the state’s targeted preemption of many local initiatives.
Pier B owner proposes compromises
Commissioner Billy Wardlow mentioned potential compromises proposed the day of the meeting by Mark Walsh, whose company owns Pier B and the attached Opal Key Resort.
In his Dec. 13 letter to the city commission, which he read at the meeting, Walsh points out that the current development agreement, in place for the past 27 years, has provided the city with $27 million in shared cruise ship revenue and allows for seven ships a week at Pier B.
“The city has said it is discontinuing its use of the Navy Mole pier and is limiting its use of Mallory Square. We would consider a limit on the number of ships per year which would be averaged over three years. This solution, we believe, would result in there being fewer on average than one ship per day,” Walsh’s letter states.
In it, Walsh also acknowledges the concern that 9,000 to 12,000 ship passengers per day “overwhelms the streets and is too much. We could voluntarily agree to a limit of 3,700 passengers disembarking per day at Pier B, averaged over three years.”
Pier B also would work with the cruise lines to schedule ship arrivals in the morning, when the city is less active, and to extend the length of stay so passengers have more time to see more of the island, patronize more businesses and spread out the crowds, the letter states.
It also acknowledges the decline of the coral reef, but disagrees with Safer Cleaner Ships’ claim that cruise ships are the cause.
“Wrongly blaming cruise ships will not restore the reef,” Walsh writes, adding that Pier B and the adjacent hotel will donate $1 to Mote Marine’s coral restoration efforts for every passenger that disembarks at Pier B and every hotel room that’s rented.
“Starting on Jan. 1, 2022, we estimate that the total donation for both will exceed $1.5 million per year,” Walsh’s letter states.
When Walsh announced the proposed donations during the public comment portion of the meeting, representatives from Safer Cleaner Ships likened it to his $1 million donation to Gov. Ron DeSantis’s campaign at the height of the state’s efforts to void Key West’s cruise ship initiative. “Now he wants to give $1 million to help restore the reef,” SCS treasurer Arlo Haskell said during the public comment period. “You can’t grow a new reef in dirty water.”
“He said 3,700 passengers per day. Those are the ships no one wants,” Arlo Haskell said.
Final direction to attorneys
The commission ultimately directed their attorneys, Shawn Smith and Ed Pozzouli, to start drafting an ordinance that comes as close as possible to the voter-approved limits while limiting the city’s legal liability, and to start negotiating with Pier B to change the agreement.
Johnston emphasized the importance of compromise and negotiations to people on both sides of the debate. She asked Arlo Haskell, “Are you open to negotiation and mediation?”
Haskell replied, “We’ll continue to engage with the city and we’ll sit down with Mr. Walsh. But we’re concerned that this becomes cover for further delays. I wouldn’t view [Walsh’s] proposal as a serious proposal.”
Commissioner Sam Kaufman said he liked the idea of providing funding for coral restoration and perhaps water quality assessments. He asked Pozzouli to look into the legal mechanisms for such a funding stream.
Below is a sampling of public comments, in the order they were made, by 40 or so speakers during the Dec. 13 meeting:
“[Safer Cleaner Ships] is asking this commission, in the face of what the Florida legislature has already done and is teed up to do, to put the taxpayers of Key West on the hook for something they had the opportunity to avoid 19 months and two days ago. I suggest Pier B be left alone. The city may already have unidentifiable liability if Senate Bill 620 passes with Mallory and the Outer Mole alone.” — Danny Hughes
“We ask you to keep Pier B in its current contract. They have done nothing to destroy this contract with the city….Approximately 40% of voters do not support Safer Cleaner Ships.” — Robert Goltz
“[Safer Cleaner Ships] takes pictures of the turbidity coming up, but not going down…. The day Norwegian Dawn was here, visibility at the reef was 100 feet.” — Michael Halpern
“It seems the matter is simple. More than 60% voted to make ships smaller and cleaner. Then Tallahassee does a reprehensible thing to try to undo the voters’ will. I don’t understand why we’re here today to listen to people’s points of view … One does wonder about the foot-dragging and whether there’s some sort of subtle sabotage underway.” — Gregory Long
“The people spoke. More than 60% voted in favor. As far as I’m concerned, you people work for us. Do your job. You hired the city manager and city attorney. They need to do their jobs.” — Michael Berman
“This whole exercise tonight should’ve happened prior to the vote. We’re in this situation now for one reason — we did not talk …. More than 5,000 votes for the referendums were mail-in votes. How many of those people can call Key West their permanent home? … The fishing industry brings in $800 million a year. How did it get to that point while cruise ships have been docking here? Let’s do the right thing for all the people, not just some.” — Bill Lay
“We’re here trying to relitigate an election. Key West voters are smart people. I’m tired of the disrespect that says somehow voters were fooled.” — John Martini
“I’m really angry with the opposition to our referendums. Your campaign was branded the most deceptive in all of Florida by the Miami Herald … Let’s put it to another vote. Three of you are up for reelection next year. I’d like to know where all commissioners stand. I don’t understand why we’re rehashing this. We voted. We made our voices clear….” — Chris Massicotte
“Most things created hastily lead to division. I believe there’s room for compromise.” — Clinton Curry
“This hurts because we had a referendum. We voted, and this is a democracy. I was told my wife would be raped on her way home because we wouldn’t have a police force left. It’s a question of good faith. If cruise ships really cared about us, they wouldn’t be making bigger ships.” — Joel Biddle
“We’ve heard all these arguments before the election. I think what’s different tonight is that during the election, we didn’t have the benefit of real world experience. Our economy is doing better than ever. When I hear Mr. Swift talk about the economic collapse in the ‘70s, that was 50 years ago. It’s 2021. We know for a fact that cruise ships are an inconsequential contributor to Key West’s economy….” — Arlo Haskell
“Bill Lay’s right. We should’ve been talking about this. The chamber wouldn’t bring it up, so we did a referendum. We forced this uncomfortable issue on the voters. Recently, we were asked to sit down and compromise. We asked Pier B to follow the law. There’s a clear turbidity violation. We asked, ‘Would you be willing to do something that doesn’t break the law?’ The answer we got was no.” — Will Benson
“There was a vote and the community spoke. But before that, there was a lawsuit filed, but a federal judge couldn’t rule on the matter. I don’t think it should be left out that were it not for COVID and no damages or money lost, the issue may never have come to a vote. There will be serious legal ramifications associated with this ballot…. There may be significant impacts on voters. Taking of private property is a sacred right in this country and I’d suggest you take the advice of your attorneys.” — Mike Morawski