Undercover Shoppers May Be Coming to Ocean Drive

Ocean Drive

Susan Askew
Susan Askew

Undercover Shoppers May Be Coming to Ocean Drive:

commission will get recommendation along with sidewalk café ordinance

Miami Beach City Commissioners agreed this week enough is enough when it comes to deceptive business practices on Ocean Drive. The Ocean Drive Association said it’s fed up too. But while everyone was in agreement with the spirit of a draft ordinance to crack down on price gauging and bait and switch tactics, the Commission wasn’t ready to vote on the proposal, referring it to the Finance and Citywide Projects Committee for “tweaking” and to give the business community an opportunity to comment.
At Friday's Committee meeting, Commissioners went a step further, directing the administration to come up with a plan to aggressively enforce regulations against misleading and deceptive business practices at sidewalk cafés which may include undercover shoppers.
The proposed ordinance would tighten the language in the City code with regard to the definition of deceptive business practices. It also creates a fine structure for violating that code and gives the City Manager the ability to suspend, revoke, or deny sidewalk café permits and BTRs, the licenses that allow businesses to operate. While the focus has been on so-called "bad operators" on Ocean Drive, the proposed legislation would apply citywide.
The sticking point was a section that would require businesses to display table tents with a message informing consumers of their rights and how to report deceptive practices.
Ordinance sponsor Commissioner Mark Samuelian said that after the Commission meeting, “I sensed that conceptually there is a lot of strong support but at the same time we want to work collaboratively with our businesses in terms of implementation” acknowledging the “questions about the table tent informing consumers of their rights”.
At today’s Committee meeting, members of the business community unanimously agreed with the direction of the ordinance but all said the language was not consistent with a hospitality message and might scare customers away from the good operators, punishing them for a small minority of bad actors.
Then there was the question of enforcement, a topic everyone felt strongly about.
John Deutzman, one of the founders of the Miami Beach Crime Prevention and Awareness Group said he fully supports the initiative but wanted to attack the problem from all directions. Of the bait and switch tactics, he said, “This is a crime. It’s based in Federal law, truth in advertising. It can be enforced by the feds, enforced by the State … It can be enforced by the Police Department.”
“It’s grand theft. It’s theft by deception,” he said. The acknowledgement that there are good operators “is nice,” he added, “But this is a crime. These people should go to prison. I want to emphasize that … You’ve got about 5 or 6 criminal operations that are organized and they’re doing it intentionally and in violation of Federal, State and local law.”
Ceci Velasco, Executive Director of the Ocean Drive Association said, “We’ve worked on this a long time” referring to the previous Blue Ribbon panel and the Ten Point Plan for Ocean Drive. “We’re at the table. We want to collaborate,” she said. While there are “5 or 6” bad operators, “Keep in mind there’s over 40 restaurants on Ocean Drive.”
Velasco said the Ocean Drive Association wants to work with the City on how to implement the ordinance including the consumer portion of it but that it needed more input from her members and all of the stakeholders citywide. “We are by concept really supportive of this, because like john [Deutzman] said, there are people who do belong in jail for their fraudulent activity.”
Mike Palma, President of the Ocean Drive Association said he believes the ordinance is necessary to address deceptive business practices but added, “I want to make it clear, we’re talking about a minority of people here. So there’s a minority of bad operators and this city has been well aware of these operators for years that have done this and to throw all of us under the bus is not fair.”
While saying he wanted to help make the messaging to consumers right, he said, “I want to make it clear … the enforcement of it is key.”
“No matter what you do, we need undercover shoppers. We need someone to go in there and live the experience and hear what these people are doing and then get ‘em for it,” he said. “The operators are tired of it. The good operators are tired of it. The City’s tired of it. Let’s attack it but if we’re going to do this messaging – I just saw something quickly, ‘know your rights, you need to know your rights’ – that’s not a message for hospitality, to know your rights.”
“This is a bad message to start with,” he said. “I want to make sure we get together and do it right.”
Palma noted the Ocean Drive Association is “fully reorganizing and gunning down and putting together a better organization and our sole purpose is the experience, to improve the experience. I want to work with those operators, give them a chance, but at the same time if they’re not going to follow procedure, we’ve got to do something about it … let’s get aggressive and fix it together,” he said.
To Samuelian, newly elected in November, Palma said, “I appreciate your coming to table right out of the gate. We’re going to get there but let’s get there together” to ensure the right message to customers so they “feel like they’re not in a bad area, more or less, or in a bad situation”.
Commissioner John Alemán, an alternate Committee member sitting in for Commissioner Micky Steinberg said, “I agree with the diagnosis but not the prescription” and echoed concerns about the table tents which, saying the message they convey would be inconsistent with the experience at most of the restaurants in the City.
“I agree we need to hit the price gauging and bait and switch head on,” she said. “The truth is we know exactly who the 4-5-6 bad operators are … rather than implement this kind of a solution that’s going to be ongoing – it’s going to be forever – I would rather take that money and let’s go do some serious undercover and let’s go revoke some BTRs … because I’m telling you, we go revoke 2-3-4 BTRs, this isn’t gonna happen anymore.”
“It’s a horrible problem that’s really hurting our brand but the remedy I don’t agree with,” she said. “Let’s go get some BTRs. Honestly, let’s go. Come back to us with a funding consideration for some serious undercover. Gather the evidence and let’s go revoke some BTRs.”
Commissioner Ricky Arriola who created the Ten Point Plan for Ocean Drive said, “We all agree that this is a blight on our city and that tourists and residents are getting scammed. Our goal is fix the problem of the chronic fraud that’s happening.” But, he said, “There already is legislation on the books to do this … I don’t understand why we can’t fix this problem. It’s only, call it a half-dozen bad operators. Target them. Do undercover. Have video cameras and just put ‘em out of business or get them to comply.”
“I spent over a year on the Ten Point Plan and this is one of the things we were targeting and it’s still not fixed,” he said. “I don’t know what is so hard. Whether it’s secret shoppers or having code ride their butts, these bad operators, until they’re out of business or they’re compliant … Just go fix the problem.”
Samuelian moved to separate the consumer notification piece from the ordinance in order to get it back to Commission in February for a vote on the remainder of it. “I don’t want the discussion on the table tents to slow us down,” he said. Letting that move separately allows “the careful consideration that it deserves”.
Alemán noted current City code which requires pricing on menus and State law which prohibits price gauging and bait and switch activities saying she wanted to clarify why this ordinance was necessary.
City attorney Raul Aguila responded that City Manager Jimmy Morales “did not feel there was express language giving him the teeth to enforce a suspension or a revocation of a sidewalk café for failure to comply” and that was one purpose of the ordinance.
From a legal perspective, he said, the ordinance would fill loopholes that Code Enforcement said it needed to enforce the law. Aleks Boksner, Chief Deputy City Attorney, said, “While we create laws, we find there are people that do whatever they do to find loopholes.”
With regard to the fines and penalties, Arriola said, “I don’t know whether the fine schedules are aggressive enough in terms of amounts. There are five or six steps you have to go through before you yank a BTR. If that’s what City Staff is saying is needed then great. But I don’t know if that fine schedule is going to work. It seems to me to be a little lenient.”
Under the proposed ordinance, violations would incur fines and penalties, and the potential denial of future permits. Specifically:
  • First violation: $500 fine.
  • Second violation within the preceding 12 months: $750 fine.
  • Third violation within the preceding 12 months: Suspension of the sidewalk café permit for one weekend (Saturday and Sunday) and $1,000 fine.
  • Fourth violation within the preceding 12 months: Revocation of the sidewalk café permit for the remaining portion of the permit year and $1,250. 
  • Operators with more than four violations within a permit year will be prohibited from applying for and obtaining a sidewalk café permit for a period of two years.
  • In addition, “the city manager shall also be authorized to commence proceedings to revoke the sidewalk café operator's business tax receipt."  
The Finance Committee voted to recommend the ordinance favorably to the Commission minus the table tent requirement and forwarded a resolution to direct the administration to aggressively enforce the existing code immediately with secret shoppers and anything else that is needed with regard to price gauging and bait and switch practices. First reading will be February 14th.
Palma then let the Committee know that the Ocean Drive Association is in process of rewriting its code of conduct and he is hoping to work with the City Manager and City Attorney to require businesses on Ocean Drive be in “good standing” with the Association in order to obtain a sidewalk café permit. “That code of conduct has things like no 2 for 1s, no 50% off, all these things that you have to abide by. If they’re not in good standing with the Board, through the legislative process they should not be able to get a permit.”
“I’m hoping by 2019 we can establish that,” he said. “With more teeth on our end, we can help you guys clean this up.”
At the Commission meeting, Mayor Dan Gelber said he expects to announce the members of his new Blue Ribbon Panel on Ocean Drive next week with working committees focused on art and culture, traffic and safety, and business practices.

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