Miami Beach “declared war” on nightlife, Clevelander alleges in lawsuit

The Clevelander South Beach’s owner is suing the city of Miami Beach, alleging that the rollback of alcohol-serving hours, the removal of noise exemptions, and the closure to vehicular traffic on its street have ruined its multimillion-dollar investment at the Art Deco hotel on Ocean Drive.

The lawsuit comes in response to the rollback of alcohol-serving hours from 5 a.m. to 2 a.m. on Ocean Drive and Collins Avenue south of 16th Street, as well as the removal of noise exemptions between 9th and 11th streets of Ocean Drive. Miami Beach commissioners passed both measures last week, with the alcohol-serving rollback lasting until Dec. 8. The approvals were at the behest of Miami Beach residents who claim their quality of life and their property values have been ruined by the all-night party atmosphere. Three prominent developers, Don Peebles, Jorge Perez, and Barry Sternlicht also spoke in favor of the rollback.

Clevelander Ocean LP’s lawsuit alleges that the city has “declared war” on the nightlife industry with the intent to “destroy the economic viability of this internationally renowned community.”

The suit further states that Miami Beach might need to pay damages to South Beach property owners under the state’s Burt J. Harris Act. “The tremendous financial burden to taxpayers is deeply troubling, but this lawsuit is about the illegality of the city’s conduct, not its poor policy choices,” the suit says.

Miami Beach has yet to be served with the lawsuit, Miami Beach Chief Deputy City Attorney Aleksandr Boksner told The Real Deal via email. But the city “looks forward to evaluating and addressing the allegations of the Complaint once the Plaintiff properly serves the City in compliance with Florida Law,” he said.

Clevelander Ocean LP purchased the Clevelander Hotel at 1020 Ocean Drive for $20.6 million in October 2018, records show. The entity is a subsidiary of the Jesta Group, a Montreal-based company headed by Elliott Aintabi. The hotel was built in 1938.

The lawsuit claims that the Jesta Group relied on its ability to play loud music and serve alcohol until 5 a.m., and even invested millions of dollars to ensure that noise from its live entertainment is blasted eastward toward the Atlantic Ocean.

“Specifically, it is likely that fewer guests will come to the Clevelander because of the restrictions on its operations, and consequently, employees and contractors no longer wish to work with the Clevelander for fear that their livelihoods will be impacted by the city’s conduct,” the suit alleges. “The Clevelander’s goodwill and standing in the community, moreover, will be devastated by any inability to operate as a live entertainment venue, permanently damaging its reputation and business.”

The Clevelander’s suit also alleges that the rollback in hours for alcohol service on Ocean Drive and Collins Avenue amounted to a zoning change, and as such, needed to be approved as an ordinance by a five-of-seven majority in two commission hearings. The rollback in hours was approved as a resolution by a narrow 4-to-3 vote.

Ocean Drive closed to vehicular traffic nine months ago to encourage people to walk or bike during the height of the pandemic. The Clevelander suit alleges that the closure instead created a perfect environment for a Covid-19 super-spreader event during Spring Break, since most people wandered around without masks. The suit alleges that the closure caused “irreparable harm… because of the likelihood that potential guests and patrons are avoiding coming to the Clevelander as a result of the closure of Ocean Drive.”

David Wallack, owner of Mango’s Tropical Café on Ocean Drive, said he agrees with the Clevelander’s points, especially concerning vehicular access. “The city also stripped away almost all of the parking on and around Ocean Drive and, in addition, curtailed even delivery trucks with limited access and severe fines,” Wallack said via text.

Miami Beach Mayor Dan Gelber said the city has a right to regulate South Beach’s nightlife, and that most bars in the United States close earlier than 5 a.m. “There is an intense amount of disorder in [that] area,” Gelber told TRD. “The city has a right to control that, including by trying to tame the nightlife a little bit. It is not unreasonable.”

Gelber has campaigned for a phasing out of South Beach’s mixed-use entertainment district to be replaced with an Art Deco Cultural District that would promote Miami Beach as a cultural destination. The mayor has also stated in public meetings that he is also open to encouraging more residential and office development in South Beach to replace the high concentration of bars and clubs.

The current 5 a.m. closing time “really discourages mixed-use in the area,” Gelber said, adding, “We really would like it to be a work-live-play area, rather than an entertainment-only area.”

Miami Beach residents will likely be asked to vote in November if the city should permanently roll back alcohol serving hours in that part of the city.