Nearly five years after high-profile development controversy cost Marathon some of its independence in issuing building permits, city officials are considering an independent audit of past building decisions in hopes of repairing trust with both the public and Tallahassee.
Following an exhaustive debate lasting more than two hours at its Oct. 27 special call meeting, council members directed staff to pursue a third-party review of Marathon’s transfers and determinations of transferable building rights (TBRs) over the last 10 years.
The costly problem
In February 2022, the Florida Department of Economic Opportunity (DEO), later renamed FloridaCommerce, revoked a 17-year memorandum of understanding (MOU) that had allowed Marathon to issue many less-consequential building permits without first submitting them to Tallahassee, as otherwise required within the Florida Keys Area of Critical State Concern.
The decision followed a dispute over the controversial Boat Works development at the end of 39th Street, where building rights previously associated with live-aboard vessels were transferred in order to permit construction of new homes on land at the same site.
The state challenged the city’s development approvals, and later issued a notice of violation after Marathon granted permits for four homes while an appeal was pending.
A replacement MOU signed in May 2022 gave the city back some, but not all, of its autonomy from the previous agreement, and still required significantly more decisions to undergo state review. Though the underlying Boat Works lawsuits were settled in 2024, the more restrictive permitting arrangement remains.
For contractors, that can mean an additional 45 days of waiting for state approval before starting or altering critical projects.
Andrew George, CEO of local contracting firm Design Center, described how even minor revisions to construction plans can add months to projects. He cited a local family’s home that could miss its intended Thanksgiving completion date because of a relatively small modification of a berm in their yard.
“(The state review) basically gives us almost three months for every revision,” he said.
Speaking on behalf of his board of directors, Greater Marathon Chamber of Commerce CEO Daniel Samess urged council members to commission an independent compliance audit, examining Marathon’s adherence to its own procedures and codes after contractors approached the chamber about permitting delays affecting their businesses, subcontractors and customers.
Narrowing the scope
Although the discussion began with calls for a citywide audit, as previously supported by councilwoman Robyn Still, the majority of public comments contained allegations of favoritism, inconsistent permitting decisions and questionable development approvals during former city manager George Garrett’s term. Others said limiting the audit appeared to target individual grievances with those who had received additional building rights.
Resident Greg Smith questioned a 2023 letter in which Garrett discussed anticipated changes to square footage limitations in a development planned for the Florida Keys Country Club – before the city council had approved the changes, which were ultimately denied.
“Circumstances like these raise legitimate questions about the city’s internal procedures, communication and oversight,” he said. “If assurances of this nature were being provided before council approval, what other representations or commitments have been made to private interests without the council’s knowledge or authorization?”
Both public commenters and council members made measured references to what they called questionable determinations of building rights, with some applicants receiving a second unit attached to their homes while others were denied after allegedly meeting the same requirements for exterior entrances and utility meters.
In recent years, the rights have carried significant value in an island chain with restrictive development ordinances, at times eclipsing more than $200,000 in value if transferred off the owner’s property and sold on the open market.
“When certain favors are worth a quarter-million dollars, that’s a lot more than a favor,” said councilman Kenny Matlock, while stopping short of accusing a specific individual of misconduct.
Per Marathon’s current MOU, all determinations and transfers of building rights are sent to Tallahassee for state review and approval.
Council members discussed the possibility of reclaiming improperly awarded building rights and taking corrective action against employees if violations are uncovered, but again stopped short of guaranteeing an action plan before seeing audit results. Per Marathon’s charter, the council is tasked with hiring and firing its city manager and attorney, with all other decisions left to city staff.
Vice Mayor Debbie Struyf initially advocated for a 10-year review encompassing building, planning and code enforcement, while Mayor Lynny Del Gaizo questioned the potential expense of the more comprehensive audit supported by Still.
City Manager Steve Williams said a cost estimate of $50,000, brought forth by council members, was based on a limited 2023 audit of Key West’s building and planning departments, not a comprehensive citywide review. No funding was specifically allocated for the new audit in Marathon’s recently adopted budget.
Williams said the city’s code enforcement practices could prove difficult to audit, as staff have the authority to impose appropriate and varying fines based on individual circumstances, while a comprehensive building department review would add a significant expense.
Council members eventually agreed to begin with a 10-year examination of TBR procedures, with the possibility of expanding the scope depending on the findings.
Williams said he would approach the Corradino Group, which performed the Key West audit and already holds a continuing services contract with Marathon, to expedite the process without requiring a new competitive bidding procedure.
If the cost exceeds Williams’ $35,000 spending authority, the proposal will return to council for approval. He hoped to provide an update by December, with auditors potentially beginning work that month.
Weighing the consequences
Despite extensive debate over the audit’s scope and necessity, one crucial question remained by the end of the evening, acknowledged by staff, council members and commenters alike: What will be the reaction from the state?
Struyf emphasized that despite repeated conversations with Tallahassee officials, the city has yet to receive confirmation that an audit would help restore Marathon’s former permitting authority.
“We need to ask the state what kind of clear plan we have and what they want us to do,” she said. “If we’re doing everything to fix it, they may work with us a little bit better.”
Williams clearly stated that he was not against an audit, but offered a sobering possibility: Depending on what auditors uncover, the review could invite further state scrutiny, worsening the permitting delays that contractors already face.
Based on that possibility, he said, while Tuesday’s meeting was recorded to satisfy legal requirements, it was not broadcast on Marathon’s usual online streaming services.
“We needed to have a full discussion and frank discussion, and people needed to be able to speak their minds without fear of repercussion,” Williams said. “We’re talking about people who have not always been friendly, and not just to Marathon. They have been ugly with other jurisdictions on occasion.”
Regardless, he cautioned that the city cannot control what information eventually reaches state regulators, or how they respond.
“Sometimes they learn things and they can’t be unlearned,” he said.
Despite the warnings, council members said they were prepared to face the consequences if an audit uncovered wrongdoing.
“Is Tallahassee a goal to rectify the situation? Of course it is,” said Matlock. “You have to take the good with the bad, and the recourse of uncovering and doing the just thing is something we’re going to have to deal with.”
