The Real Deal Miami

Rapids Water Park owner sues to stop competitor in Fort Lauderdale

Suit alleges government officials violated the city charter by not seeking competing bids

October 22, 2015 12:00PM
By Francisco Alvarado

  • Print

Schlitterbahn’s New Braunfels Water Park

A Palm Beach County water park operator wants to stop a competitor from setting up shop in neighboring Broward by alleging Fort Lauderdale officials cut an insider deal unfavorable to city taxpayers.

On Wednesday, Premier Parks LLC, which owns dozens of parks around the country — including Rapids Water Park in Riviera Beach — sued the city of Fort Lauderdale in federal court in Broward, alleging government officials violated the city charter by not seeking competing bids when Fort Lauderdale partnered with rival firm, Schlitterbahn of New Braunfels, Texas. Premier Parks is asking the court to invalidate the 50-year-lease agreement between Fort Lauderdale and Schlitterbahn and force the city to accept competing offers.

“They left us no other position but to file a lawsuit,” Premier Parks Chairman and CEO Kieran Burke told The Real Deal. “Aside from not having the opportunity to bid on the project, we don’t understand how the city would not follow the legal requirements of its own charter to secure the best possible park for residents of Fort Lauderdale.”

A spokeswoman for Fort Lauderdale City Attorney Cynthia Everett declined comment because the legal department had not been served. Officials for Schlitterbahn could not be immediately reached. Joe Cerrone, president of Fort Lauderdale-based Recreational Design & Construction, which is partnering with Schlitterbahn, did not reply to a request for comment sent via email.

The lawsuit is the latest obstacle in the five-year effort between the city and Schlitterbahn to develop a water park and hotel on a 64-acre site at 5301 Northwest 12th Avenue. The property, located near Fort Lauderdale Executive Airport, includes the shuttered Fort Lauderdale Stadium, that was once the spring training home of the New York Yankees and the Baltimore Orioles.

The Schlitterbahn park will feature coasters that shoot patrons up and down water slides, a river ride with rapids and drops, interconnected waterways and a tree-house styled resort. The main portion will be built on stadium grounds, reconfiguring the old facade into a castle entrance. Schlitterbahn also agreed to put in four soccer fields that will be used by local schools and youth athletic organizations.

The Federal Aviation Administration, which owned part of the land, had refused to grant the city permission to let Schlitterbahn develop the property. The project cleared the FAA hurdle this past July when the federal agency agreed to sell back its portion of the site to the city for $12.1 million.

Gary Rosen, managing shareholder for the law firm Becker & Poliakoff, representing Premier Parks, said the city ignored his client’s attempts to scuttle the deal, including a last minute plea at the October 6 city commission meeting when an amendment to the Schlitterbahn agreement was approved.

“Quite frankly the city commission dismissed our concerns,” Rosen said. “Fort Lauderdale officials seem to be embarking on a single-minded mission to go with a single provider when it is not in the city’s and the taxpayers’ best interests to do so.”

In its lawsuit, Premier Parks alleges the Schlitterbahn deal mirrors another controversial Fort Lauderdale project involving Recreational Design & Construction that led to an 2013 investigation by the Broward County Office of the Inspector General. Investigators concluded that the city officials violated state law and engaged in misconduct when it awarded Recreational Design & Construction a $32 million contract to build an aquatic complex at the Fort Lauderdale Swimming Hall of Fame.

“The facts revealed by the [inspector general’s] investigation are strikingly similar to the lack of due diligence and failure to comply with the charter that led to the city’s approval of the lease” with Schlitterbahn, the complaint alleges.

Fort Lauderdale city commissioners dismissed Premier Parks objections based on the city attorney’s legal opinion that Fort Lauderdale representatives acted properly in negotiating solely with Schlitterbahn, according to a Sun-Sentinel article. The amendment approved by the city commission gives Schlitterbahn until July of next year to back out of the deal without penalty, raising the possibility the water park may not get built if the company decides to abandon its plans.