Miami and Scotty’s Landing at odds over $400,000 in fuel fees

Miami administrators say Scotty’s Landing owner Scott Wessel owes the city more than $400,000 in fuel fees, the latest chapter in a lengthy, soap-opera-like bidding process for valuable waterfront property that has now become a testy issue in a mayor’s race still eight months away.

The city wants Wessel, who has spent much of the past year fighting the Miami-Dade tax collector over a $2.5 million bill, to put the $400,000 in escrow if he wants to continue bidding to operate the Coconut Grove restaurant, marina and fuel station he has run since 1986. The 35-year lease ended in the fall.

On Thursday, city commissioners are set to vote on whether or not to unleash the city attorney to “take any and all actions” necessary to collect the contested fuel fee. Two weeks ago, concerned that politics were overtaking policy, commissioners voted to defer the item.

Wessel has so far refused to put the money in escrow. He’s questioning an amendment added to the bidding process only two weeks ago by Miami Mayor Tomas Regalado that says that if a bidder owes the city money, the contested amount must be placed in escrow. The city’s administration can amend the bidding process while it’s ongoing, though some experts believe it could be an opening for a court challenge down the road. “We’re saying we don’t owe’’ the money, Wessel said. “The timing on it is funny. The process we’re going through is funny.”

Wessel, who has operated Scotty’s Landing and the adjacent marina for 27 years, was not questioned about the amount he pays the city in fuel fees in previous audits. He took over the fuel station from marina-giant Merrill Stevens 23 years ago. Just two days before the initial bidding process for the waterfront jewel began last summer, the city released the audit that found Wessel should be paying the greater of 3 cents per gallon or 10 percent of each month’s fuel sales, as the original agreement indicated.

Wessel had been paying 3 cents for every gallon of gasoline sold, the price he said the city had been accepting all along.

“The timing of it makes the issue itself have an odor about it,” said Wessel’s attorney, Norman Segall.

Commissioners Francis Suarez and Michelle Spence-Jones questioned the timing of the audit and Regalado’s amendment when the issue surfaced two weeks ago.

Regalado calls collecting the overdue bill simply “good government,” though he admits the bidding process has become “a political tug-of-war” between himself and Suarez, his main opponent for the mayoral slot in November.

Suarez said the mayor’s move to amend the bid midstream, though legal, “leaves a bad taste in my mouth.” He also argues that what should be a simple bidding process based on policy now “seems hyper political.”

Meanwhile, what was once a warm relationship between Suarez, a first-time office holder, and Regalado, a seasoned pol, has become at best frosty – especially since Suarez announced he would challenge the incumbent in the November race. From the start, the bidding process for the waterfront property has been a sordid mess.

Last June, a group called David One LLC, composed of Flannigan’s restaurant owner Jimmy Flannigan and Monty’s South Beach owner Matt Johnson, won the initial bid process proposing a new state-of-the-art Tiki-hut structure and $720,000 a year to the city in rent.

That lasted all of three weeks, when the city discovered that David One LLC’s marina operator had overstated his experience. The city then considered accepting Wessel’s second-place bid, until seemingly out of nowhere records began surfacing that Wessel had not paid property taxes since 1976. City bidding rules specifically state that a bid is disqualified if there are outstanding tax issues.

Exasperated, City Manager Johnny Martinez scrapped the entire process, and announced new bids would be considered.

Soon after, County Tax Collector Fernando Casamayor claimed Scotty’s owed $2.5 million in back taxes and threatened to revoke Wessel’s business license. In order to enter the upcoming bidding process, Wessel counter-sued, arguing that when the original lease was drawn up, state law exempted businesses on municipal land from paying taxes. That court fight continues.

In January, Miami once again entertained bids for the sought-after bayfront property, located between City Hall and the Chart House restaurant. Now, accusations of political skulduggery are flying.

“It just seems very convenient that the amendment is now in the [bidding rules] when it could have happened any time,” said Suarez. “And why didn’t the administration do the audit in 2009 or 2010? It seems like this whole thing is orchestrated.”

Countered Regalado: “It’s not political, it’s just good government.”

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