In its filing with the Eleventh Judicial Circuit Court, the Clevelander said, “The City has declared war on South Beach’s famed Entertainment District. Sweeping aside decades of a fabled history that has brought immense talents to South Beach, along with huge financial resources and many millions of visitors, the City has launched a series of regulatory attacks with the avowed purpose of destroying the economic viability of this internationally renowned community.”
“It is within the power of every city commission and city council to set policy for its city. However, no city has the right to violate the law, ignore due process, trample on vested property rights or take similar steps in order to execute that policy,” the Clevelander said in a statement to the press upon filing the suit.
Frustrated after numerous panels on Ocean Drive, a Ten Point Plan, and various legislative actions have failed to tame what he calls the “anything goes” behavior in the Entertainment District, Mayor Dan Gelber proposed a 12 Point Plan in early April that he has been pushing with Commissioners. The repeal of the noise exemption and roll back of alcohol hours from 5 am to 2 am are two key parts of the plan that passed this month.
The permanent closure of Ocean Drive has been suggested previously and the City decided to give it a try during the pandemic providing residents a wider area to walk and bike and expansion space for sidewalk cafés to comply with social distance guidelines. It was partially reopened in July but then closed again. Funding for a permanent pedestrianization was part of the GO Bond passed by voters in 2018.
The Clevelander says the continued closure of the street now is a holdover from the City’s COVID emergency measures and flies in the face of Governor Ron DeSantis’ Executive Order which “eliminates and supersedes any existing emergency order or ordinance.” Absent emergency measures, they say, the City does not have the right to impose a permanent closure as Ocean Drive is under the jurisdiction of Miami-Dade County which has not approved permanently closing the street, something that requires careful analysis.
“Guests arriving at the Clevelander, which often include tourists saddled with luggage during inclement weather, require direct access to the Clevelander’s entrance as they are unable to travel long distances along the crowded South Beach area,” the suit states. “Because of the design of the Clevelander, any reduced vehicular access to Ocean Drive severely curtails its ability to welcome guests and discourages potential guests that might otherwise patronize the Hotel.”
“While other institutions have been granted partial relief from the closure of Ocean Drive through the City permitting them to operate valet stations on cross streets, no such option has been given to the Clevelander,” according to the filing.
Alcohol Rollback
The Clevelander claims it has vested rights within its Conditional Use Permit (CUP) and other licenses and certificates which give the business the right to serve alcohol until 5 am. The filing states the Clevelander should be grandfathered in should the rollback hold up. That said, the Clevelander is also taking issue with the 4-3 vote.After Mayor Dan Gelber could not convince swing vote Commissioner Micky Steinberg to go with a permanent 2 am last call, he opted for her proposal to test the earlier time until voters have a chance to have their say in November. The vote was 4-3 in favor of the pilot, unanimous with regard to holding another referendum on the hours.
The Clevelander says in its court filing that the vote required a 5/7 majority because it is a zoning ordinance and that the City’s own attorneys opined to that effect when a previous rollback was considered.
Noise Exemption Repeal
“Entertainment,” including “live musicians, disc jockeys, dancers, stilt walkers, light shows, and other performances,” the lawsuit states “is a critical driver of the Clevelander’s business.”The noise exemption had allowed entertainment venues located on Ocean Drive from 9th to 11th Streets including the Clevelander, Mango’s, Palace, and Ocean’s Ten, to have live music and entertainment above background levels for eastward facing noise. Directly to the east is Lummus Park and the ocean and the businesses have argued noise going that direction does not impact any residential buildings.
The repeal, according to the Clevelander is not “related to any legitimate need of the public’s health, safety, or welfare and is part of a regulatory scheme aimed at eliminating the Entertainment District and harming the Clevelander.”
“Repeal of the eastbound sound exemption is a violation of the Clevelander’s vested rights in its CUP which has permitted it to have live entertainment above ambient levels for approximately 25 years,” the suit states.
“Realistically and inevitably, it is not possible to operate a live entertainment venue on Ocean Drive, as explicitly permitted by the Clevelander’s CUP, without the eastbound sound exemption. Live entertainment cannot survive at the volumes permitted by the City Code. Based on sound tests, it is impossible to exercise the Clevelander’s rights under its CUP with the eastbound sound exemption eliminated,” according to the filing.
The noise exemption, it says, “has been critical to the Clevelander’s identity and success as a magnet for tourists and other guests.”
Lack of due process for warnings
The Clevelander also objects to immediate penalties that increase in severity, ranging from monetary fines to revocations of licenses, “without any opportunity to contest the warning that subjects it to such consequences.”Citing a noise warning issued on January 2 during a time when the neighboring Palace had one of its shows taking place, the Clevelander claims it was given a warning for playing a song that was not on its playlist that night. According to the lawsuit, the Clevelander was “informed the warning was unappealable and not subject to any other form of challenge” which it says is a breach of its due process rights and “it now remains one violation away from having penalties imposed because the City refused to allow it to challenge an erroneous prior warning.”
Balancing the City’s rights with the Clevelander’s
At a Special Sets hearing Friday before Eleventh Circuit Court Judge Beatrice Butchko to set a schedule for an injunction hearing, Butchko cited her responsibility to weigh the balance between the City’s ability to regulate its affairs with the Clevelander’s rights to operate its business.Butchko, a Miami Beach resident since 1989, said, “I think the City is trying to adjust to what’s going on down there [in the Entertainment District]… The question is going to be, a balancing test, whether or not the City can impose whatever it is that they’re trying to do and a business owner’s right in the United States to have a business and profit from it.”
While the City’s outside attorney Jamie Cole of Weiss Serota Helfman Cole & Bierman LP said the City has not been formally served the initial complaint, had only received the filing for the temporary injunction the night before, and was not prepared to argue the case, there were a few points made in response to the Clevelander’s claims that give some indication of the City’s arguments.
Cole said it was “very clear” the alcohol rollback ordinance was part of the business regulations portion of the City Code and not within the Land Development Code, therefore the 4/7 vote was sufficient.
At one point, he noted the Clevelander’s CUP did not have vested rights with regard to noise as it contains a provision that “they will specifically abide by the Code and any amendment thereto.”
The judge, however, raised the issue of equitable estoppel included in the Clevelander’s motion for an injunction, noting the Clevelander had been operating “without any objection from the City” for more than two decades with regard to the noise exemption and alcohol service hours.
In the Clevelander’s motion for an injunction, it cited a description of estoppel in one court ruling: “Stripped of the legal jargon which lawyers and judges have obfuscated it with, the theory of estoppel amounts to nothing more than an application of the rules of fair play. One party will not be permitted to invite another onto a welcome mat and then be permitted to snatch the mat away to the detriment of the party induced or permitted to stand thereon.”
Butchko noted she will need to “consider whether or not it’s relevant as to what the Clevelander has been allowed to do historically… Is that relevant? Is it relevant the Clevelander has been allowed to maintain alcohol sales to 5 am and now the City wants to change that policy? … Is there an estoppel? Do they have the right to make that change?” Her decision “is going to be driven by law and precedent of other cities,” she said.
Clevelander attorney Kendall Coffey of Coffey Burlington PL pressed the urgency of an injunction saying the City’s actions will cause employees to go elsewhere to work and customers to move to establishments on nearby Washington Avenue that are allowed to remain open until 5 am.
In the injunction motion, the Clevelander said it has 150 employees that work on an hourly wage, many of whom “may no longer wish to work at the Clevelander because the City’s regulatory attacks threaten the Clevelander’s business, on which they rely for their income.”
“Second, the threats to the Clevelander’s business posed by the City’s conduct prevent the Clevelander from establishing new relationships with replacement staff members as the Clevelander has become viewed as an unstable workplace in constant risk of being regulated out of business.”
“This is not a fundamental challenge to whether the City can protect itself, for example [on] Memorial Day Weekend,” Coffey told Judge Butchko at the hearing. “It’s a question of balancing regulations with the vested rights of a long-time property owner.”
When Coffey replied to Butchko’s question about when the alcohol rollback would take effect, she expressed surprise. “Tomorrow? Oh boy.”
Acknowledging she could not rule on an injunction without a hearing, she asked the two sides, “[O]n a voluntary basis, is there any way that you all can agree to stay the ordinance until such time that we have an opportunity to litigate these issues because it will significantly impact the businesses?”
Cole responded that the City Commission voted and “It’s been enacted… I’m not sure there’s any mechanism for that to happen.”
Noting the “very complicated issues” involved, Cole asked for a hearing at the end of June.
Butchko said, “I have to balance the City’s alleged or purported rights to manage versus this business that we could be causing irreparable harm to if their employees all leave and go somewhere else.”
“Two weeks would be great, three weeks somewhat acceptable but after that it’s difficult, I think,” she said. “It could cause severe damage to the business if they are in the right – which I am not saying they are or they are not.”
She set a date of Monday, June 7 for the injunction hearing. “I know how important this is for everyone,” she said.
Photo courtesy the Clevelander
