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05-07-85SpMtg MAY 7, 1985 A Special Meeting of the City Council of the City of Delray Beach, Florida, was called to order by Mayor Doak S. Campbell in the Council Chambers at City Hall at 7:00 P.M., Tuesday, May 7, 1985. Roll call showed: Present - Council Member Malcolm T. Bird Council Member Marie Horenburger Council Member Arthur Jackel Council Member Jimmy Weatherspoon Mayor Doak S. Campbell Absent - None Also present were - City Manager James L. Pennington, and City Attorney Herbert W.A. Thiele. Mayor Campbell called the meeting to order and announced that this meeting has been called for the purpose of (1) Consideration of extension of or revocation of temporary certificate of occupancy and for further instructions to the administration and City Attorney's Office relative to continuation of non-conforming use status of Marina Delray. 1. The City Attorney reported that this is a continuation of Council's review and essentially a hearing concerning the continuation of the non-conforming use status and temporary certificate of occupancy with regard to Marina Delray. About five or six weeks ago Council received documents and a lengthy memorandum setting forth the arguments, both pro and con, concerning the non-conforming use status and dealing essentially with a time period involved in 1982 and 1983. At that time Council decided to continue further consideration of the issue until this evening, and in the interim, Marina Delray's representatives were requested to do what was necessary in the Federal Bankruptcy Court in Tampa to obtain, if at all, a court order to get from the Department of Revenue the sales tax records for that subject business for the years in question; also any other documentation the Marina Delray may have. The temporary c.o. currently is set to expire tomorrow unless Council, by some action, may extend it further or convert it into a permanent c.o. The City Attorney advised since the last meeting the follow- ing information has been distributed to Council and also additional information which the City Attorney's Office has received: As to the sales tax information, they have not received anything of that nature; Brian Brody, attorney on behalf of the Marina Delray, informed him that their Tampa bankruptcy attorneys had petitioned the court recently for those records, but that no hearing has yet been held and no order has yet been ordered by the court. Additional documents of going to the merits of the case concerning the 1983 gap period have been submitted and distributed to Council; those documents are submitted for the pur- poses of trying to address those two ends of the gap period, being January 1983 and July 1983, and include restaurant receipts, payroll records and vendor receipts. The City Attorney stated their argument will be that those documents show that they commenced operation on July 22nd at the latest and that the Marina Delray terminated operation on January 21st of that year, so that the operation commenced in July exactly on the 180th day and that their use did not lapse in the 1983 time period. He reported his office has some testimony from witnesses, (residents in the general vicinity), but they have those in the nature of affidavits, both pro and con, as to whether or not the site was open during that time period, all of the time or part of the time. The City Attorney advised that as been discussed Marina Delray has raised the question of estoppel, in that it is now three years hence and that there have been a number of operators and/or owners in the interim; their argument is that even if the 1982 time period was a lapse the City ought not now be able to revoke their c.o. on the basis that the City was not timely in enforcing it and/or that the information, if known, should have been at other periods of times and not against these different owners and operators. As to the two time periods, the City's arguments to the contrary are that there is no documentary evidence that they were open sufficiently in 1982 so as to not create the gap period; also, the only two utility billings for the period do not indicate the function and the City has resident testimony to the effect that they were closed for an extended period of time, at least through Halloween of the 1982 period. The City Attorney advised that at some juncture when Council has discussed this and heard from the representatives of Marina Delray, there are two or three routes he would like Council to come back and defer to the Attorney's Office because of the bankruptcy court situa- tion, so that Council's consensus can be directed with regard to further steps to take. Brian Brody, attorney for Berkley Multi Units that is the parent company of Marina Delray, advised that several months ago Marina Delray attempted to get the necessary documentation from the Department of Revenue and was successful in getting partial documentation. He was told by the attorneys in Tampa who are the attorneys for debtors and possession (there are 12 corporate entities that are in the Chapter 11 reorganization) that application, in the form of a motion, has been made in the Bankruptcy Court; however, because of the docket crowding they have not had a chance to go before the judge. The judge can direct the Department of Revenue to give them the information; however, the Depart- ment of Revenue does not have to respond, because they were not the owners of record. Mr. Brody stated he felt that in a short period of time they should have a hearing date. The documentation that has been given within the past few weeks to the City Attorney shows the receipts in chronological order, not only for the period of January 21 and 22 but for the period July 21, 22 and 23. The time period, as they have counted out, comes to 178 days. They feel they have gone to whatever lengths they could to get all the information to the City Attorney to prove their case. Mr. Brody stated they just want to run a restaurant and on that basis they have tried not to take an adversarial position with Council. Upon question, Mr. Brody advised that he asked today to be sent a copy of all the pleadings that were filed with the court and expects to have that information within the next few days. Mayor Campbell advised that as he sees it there are three courses of action that Council can take: (1) grant the permanent c.o. based upon the information given; (2) refuse to extend the temporary c.o. or (3) assuming that, in fact, Marina Delray has taken some action before the Bankruptcy Court is again extended for a limited period of time for absolute proof of what has been indicated as far as a pending motion. Mr. Jackel stated he has said before that the City has ordinances to protect our citizens against undue noise and illegal parking and wonders how many of these complaints were directed to City management who has control over these things. He advised that if this restaurant has broken our ordinance by not obeying the non-conforming use then the c.o. should be discontinued; however, if that has not been demonstrated and they have been operating within the 180 day period, Council has no right to put them out of business. He advised he did not believe the City would want a multi-million dollar lawsuit against them, especially one which they may lose. Mr. Jackel moved to extend the temporary c.o. for another 90 days which would given them sufficient time to obtain any documents which are available, effective immediately. Motion FAILED for lack of a second. Mr. Jackel moved that a permanent c.o. be given to the Marina Delray, effective immediately. Motion FAILED for lack of a second. - 2 - 5/7/85 Mr. Bird stated he concurred with some of Mr. Jackel's comments. However, his question is how long do we reward dilatory tac- tics? Council has given several months of time for these pieces of documentation to be provided or some evidence that they had been re- quested to be provided. He believed the citizenry, as well as Council, is entitled to know when this comes to an end. Mrs. Horenburger stated she has a problem with the au- thenticity of some of the documentation. She also did not believe Council has addressed the real issue, which is the non-conforming uses and their life in the community. Mr. Weatherspoon commented that he also concurs with Mr. Jackel's remarks and feels that tonight Council should decide to either reject the c.o., which he would be opposed to, or grant them the c.o. rather than continuing to waste taxpayers' dollars. Mayor Campbell stated he has a concern that we are taking a very important move with regard to a business that has been operating for some time. It is certainly not the objective of Council to inflict a hardship against anyone nor is it to fly in the face of what we believe to be the clearcut rights of individuals to operate a ligitimate business in this community. However, Council does have a responsibil- ity, ultimately, to the community and that is to enforce the ordinances. He stated the City has a position that it feels is right in the light of the absence of concrete evidence and he is sure the applicant has a position which he feels is right; the proper forum when you cannot agree has been the judicial system. The quicker we can get a judicial opinion the quicker we will all rest in peace. It may very well be that if we are wrong we may need to address our in-house management procedures and possibly look at some revisions to the Code. He stated he would be in favor of going to the courts as soon as possible and therefore not granting the extension at this time, if that's what it takes to get to a court; therefore, the City Attorney can take it upon himself in rep- resenting the City to get to the court of competent jurisdiction to get a determination. During that process he would not be in favor of an enforcement action of actually closing their doors at this time; he believed we could move very quickly in the hands of the City Attorney. The City Attorney suggested a motion to cancel the temporary c.o. effective 12:01 P.M., this coming Friday, May 10, 1985; as of that time the temporary c.o. will be declared null and void and revoked on the basis that the premises are in violation of Chapter 30 of the Zoning Code of the City of Delray Beach. In regard to continuation of non- conforming uses, that non-conforming use status has lapsed and that the City Attorney's Office be directed to take the appropriate measures thereafter to enforce the revocation of the temporary c.o. in the ap- propriate judicial form. Mrs. Horenburger so moved, seconded by Mr. Bird. Mr. Brody stated he would have to advise his client that if the temporary c.o. is not continued or revoked as of a certain time that Marina Delray would be in violation of the law if they continue to operate at the moment that the temporary c.o. is revoked. It would be his recommendation to Marina Delray and the corporations that run Marina Delray that they should cease business so as not to be in violation of the law. That is where the adversarial position would obviously come in as to lost revenues, hurting of reservations on the part of the hotel and moneys which would have to be returned. He reiterated that they have tried to submit all the documentation that they have and all they want to do is run a nice restaurant. - 3 - 5/7/85 Paul Alfieri, representative of the former owner and op- erator and also a representative of Southeast Bank which holds the first mortgage on the property, stated they have obtained the necessary in- formation to show clearly and convincingly that the property was open during the 1983 period. Secondly, Southeast Bank has a major stake in the resolution of this property, having a million dollar first mortgage. If Council should rule that the temporary c.o. be denied the bank would certainly suffer tremendous damage due to the impairment of the security for their mortgage. The property is virtually worthless if it cannot operate as a hotel and restaurant. They would have to join in any litigation that would follow pursuant to the ultimate decision of Coun- cil. Mayor Campbell advised that they are not trying to inflict any unfair harm; they are not undertaking to close Marina Delray's doors. In the lack of that cooperation to move expeditiously to a court in order to get a declaration of whose side was right here, they have left Council no alternative but to proceed and ask our City Attorney. Discussion followed. Mr. Alfieri added that if Council were to deny the c.o. he believed that Booi Services, Inc., would be in violation of its hotel/restaurant and liquor licenses immediately. The City Attorney suggested, as an alternative motion, that Council direct the City Attorney's Office to extend the c.o. in- definitely until such time as there has been an initial trial court determination at the initial level as to whether or not the non- conforming use has lapsed and that his office be directed to seek declaratory relief in the nature of a declaratory judgment if available; failing that, they would then endeavor to sue for injunctive relief if we were declared to be in lack of standing to bring such an action. Upon question, the City Attorney advised that his thinking at the moment is that suit could be filed within a week in the Fifteenth Judicial Circuit Court. He stated he did not believe the court would very readily grant us emergency hearings on the issue; Council is prob- ably looking at a three to five week trial on the merits of the case and most of the judges right now are looking at seven to ten months lag time to get non-jury trials in some of the divisions. At best, he believed a trial date would be in December of this year. Upon question by Mr. Jackel as to whether Marina Delray's attorneys in Tampa could get the necessary documentation which was requested some time ago if given a 90 day extension of time, Mr. Brody advised that he believed very shortly the judge will rule that the Department of Revenue should turn over whatever documentation they have. He does not know what documentation they have or whether the Department of Revenue will fight it, since the information they are requesting happened at a time frame when they did not own the property. Mr. Bird asked Mr. Brody if he knew in what form the informa- tion was requested, i.e., all of the tax records for a prolonged period of time or a simple question of whether there is evidence that sales tax was collected for the month of January 1983 and remitted to the State. Mr. Brody stated they asked the Department of Revenue for all informa- tion since 1981 regarding Marina Delray; they refused. They asked for information since they have been the owner and they gave them that. They asked for information from the time period of 1983 when Mr. Graham owned the property; they refused and they had to get Mr. Graham to ask for that. The motion as was filed in Tampa asked for information for 1982 and 1983. Mr. Bird stated that specific to Council's question is only one month. Mr. Brody stated he would go back to the attorneys in Tampa and ask them to merely have the judge sign an order asking the Depart- ment of Revenue for a yes or no answer as to whether or not there was sales tax during that period. - 4 - 5/7/85 Mayor Campbell stated he would be in favor of the City Attorney undertaking to get the City before a court as soon as possible and would be in favor of directing the City Attorney to extend the c.o. indefinitely but also, as soon as possible, filing a declaratory action so that we can get this matter resolved. He suggested that as part of the City Attorney's declaratory action he undertake a motion to compel discovery or get from the Department of Revenue the answer to Mr. Bird's question since the applicant has failed to do so. Mr. Jackel so moved, seconded by Mr. Weatherspoon. Following discussion, the City Attorney stated the sub- stitute motion by Council Member Jackel would be that the City At- torney's Office and the Administration are directed to extend the tem- porary certificate of occupancy at the subject premises of the Marina Delray Hotel, Restaurant and Bar until such time as a final judgment is entered by an appropriate judicial forum declaring the rights of the parties in regard to the nonconforming use issue; that the City At- torney's Office is directed to commence litigation in the appropriate forum, most likely Circuit Court, to file a declaratory judgment and/or injunctive relief action to endeavor to go forward and have a judicial resolution of the issues. Mayor Campbell stated he didn't know if Council would want to extend the temporary c.o. to a final resolution; he would want to remain the power of the Council to follow the lawsuit very closely and if it is not to our advantage that we can reopen the situation that we are not going to be bound to say they sit there and wait a year on a final judgment. If it looks adverse to our interests or if the ap- plicant is not cooperating or if the court system seems to totally frustrate our efforts, we may want to revisit it. So, he would like to make it indefinite at this point. The City Attorney advised the modification would be then that at the latest it would run until the judgment against the Marina Delray, subject to revocation in the intervening period of time by the City Council. Mr. Jackel accepted the substitute motion, amended his motion and Mr. Weatherspoon amended his second, accepting the clarifica- tion. Upon roll call Council voted as follows: Mr. Bird - Yes; Mrs. Horenburger - No; Mr. Jackel - Yes; Mr. Weatherspoon - No; Mayor Campbell - Yes. Said motion passed with a 3 to 2 vote. Before roll call the following discussion was had: Mrs. Horenburger advised she is still very much opposed to granting a temporary c.o. indefinitely or at all tonight; based on the evidence we have, the non-conforming use was abandoned and her vote will reflect this. Mr. Weatherspoon stated he felt based on the information we have received that Council should be able to make that decision without pushing it off to the Court system. Mayor Campbell advised that what we are seeing is the major- ity of Council is disagreeing with the minority in that the majority, basically, would like to close the Marina Delray; they do feel that it is something that is not desirable in that area. He certainly does not want to get the City embroiled in some very costly litigation and ad- verse consequences; he just wants to move on and proceed with getting a determination of that answer and seeing if we cannot uphold what the community wants. By this motion, we are going to keep a very tight leash on the situation. He stated if we are frustrated in that en- deavor, if we feel that is is inappropriate and not getting us anywhere, if the judges are going to be unduly dilatory, then we can come back and revisit that issue and take whatever steps might be appropriate to remedy the situation. - 5 - 5/7/85 Upon question by Mr. Jackel, Mayor Campbell stated that if the Marina Delray has been in operation during the period of controversy as the Department of Revenue could indicate, the whole matter would be dropped. At this point the roll was called to the motion. Mayor Campbell declared the meeting adjourned at 8:15 P.M. ' ~ City ~lerk '" ATTEST: MAYOR The undersigned is the City Clerk of the City of Delray Beach and that the information provided herein is the minutes of the meeting of said City Council of May 7, 1985, which minutes were formally approved and adopted by the City Council on ~_ ~.~ /FfJ: ~ City Clerk NOTE TO READER: If the minutes that you have received are not completed as indicated above, then this means that these are not the official minutes of City Council. They will become the official minutes only after they have been reviewed and approved which may involve some amendments, additions, or deletions to the minutes as set forth above. - 6 - 5/7/85