City of Miami and Watson Island resort and marina developer score court victory against project opponents

In a setback that was anticipated by court rulings in previous similar cases, a group of Venetian Island homeowners trying to block the development of a megayacht marina and resort on publicly owned Watson Island lost their appeal of a lawsuit filed against the city of Miami.

On Tuesday, the Third District Court of Appeal upheld an earlier lower court ruling that the plaintiffs did not have standing to sue the city because they could not demonstrate how they had suffered injuries as a result of the development deal between Flagstone Property Group and the city. Flagstone intervened in the lawsuit as a party with the city.

Previous lawsuits aimed at stopping the Miami Skyrise observation tower and an $18 million marina and restaurant project at the Coconut Grove Marina were tossed for the same reason. In the Watson Island lawsuit, plaintiffs Stephen Herbits, Philip Glatstein, and five others — who have filed several complaints in connection with Flagstone’s project over the last 15 years — accused the city of failing to turn over public records, including new appraisals for the development site.

Alan Dimond, a Greenberg Traurig shareholder who represents Flagstone, said his client is pleased with the appeals court decision. “The company looks forward to getting the project up and creating something our community will be very proud of,” Dimond told The Real Deal. “After more than a decade of fighting this project, the objectors should be getting the idea that it is going to be built, it is going to be successful and this constant litigation is not productive for anyone.”

However, Sam Dubbin, the lawyer representing the plaintiffs, said the fight is far from over, especially if Miami voters pass an amendment to the city charter on Nov. 8 that would automatically grant residents standing to sue the city over violations of Miami’s Citizens Bill of Rights. If it passes, Herbits and company can refile their lawsuit.

“The appeals court provided a road map to challenge the final lease agreements,” Dubbin told TRD. “That makes voter approval of the amendment all the more important because it will empower residents to enforce the charter against the city and developer wrongdoing.”

In 2001, Flagstone won a city bid and a referendum to build its $1 billion project, which includes a megayacht marina called Island Gardens Deep Harbour Marina, that opened earlier this year and two hotels and a 221,000-square-foot mall that are supposed to break ground in 2017. In 2013, the city and Flagstone renegotiated the lease terms with the company, paying a minimum annual base rent of $2 million. Company representatives also say the project will generate more than $5 million in revenue sharing and parking surcharge income to the city.