Grove Key Marina/Scotty’s Landing

Miami stuck with $1.35 million property tax bill in Coconut Grove, vows to appeal

The owner of popular Scotty’s Landing in Coconut Grove is off the hook for $1.35 million in back property taxes — but the city of Miami is now stuck with the bill, a judge ruled Friday.

Miami-Dade Circuit Judge Peter R. Lopez ruled after a hearing Friday that the city owes the money because its lease agreement with Scotty’s Landing — which operates on city-owned, water-front property — did not address taxes, thereby meaning Wessel did not have to pay them.

Lopez determined the city was liable for the back taxes to the county, but only for the five years between 2007 and 2011 because of the statute of limitations.

City Attorney Julie Bru said she plans to appeal the decision unless her bosses tell her otherwise.

“I don’t believe the statutory scheme the legislature has enacted provides for a mechanism that allows the county to treat the city as a taxpayer,” Bru said.

The city must now pony up $1.35 million in back taxes for the piece of Coconut Grove property adjacent to City Hall that it has leased out for decades, but which no one has paid taxes on since 1995.

The tangled web of who — if anyone — owed back taxes on the Grove Key Marina property began in July when county tax collector Fernando Casamayor wrote Scotty’s Landing owner Scott Wessel demanding taxes dating back to 1996, when he took over and assumed the lease for Grove Key Marina. Casamayor threatened to take away Scotty’s occupational license if Wessel didn’t pay.

Wessel sued to block the order. Casamayor then filed a counter suit, later amended to say the city of Miami might owe the money and leaving it for a judge to decide.

Friday, after a 90-minute hearing, Judge Lopez blamed the city for not addressing the issue in the lease and ordered it to pay the back taxes.

When the original lease with Grove Key Marina was signed in 1976, state law exempted for-profit businesses on municipal properties from paying property taxes. The original owner never paid, and neither did Wessel after he inherited the lease from neighboring Grove Key Marina in 1996. He had purchased Scotty’s Landing and re-christened the waterfront hideaway a few years earlier.

Grove Key Marina, a spit of land between Scotty’s and Miami City Hall, is a dock, boat storage and fueling facility.

Norman Segall, Wessel’s attorney, said he never doubted which way the judge would lean.

“The city loses the [property tax] exemption when property is used for non-governmental purposes,” he said.

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