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Miami scraps proposals for Scotty’s Landing site in Coconut Grove

After weeks of mudslinging and a scolding from city commissioners, Miami administrators on Friday tossed all of the proposals submitted by vendors interested in running a marina and restaurant on prime city-owned property in Coconut Grove.

Among the tidbits that surfaced during the dogfight: Scotty’s Landing, the beloved burger-and-fish joint fighting to stay on the property, hasn’t paid property taxes in more than three decades.

The city is seeking a new operator to replace Grove Key Marina, which runs also Scotty’s Landing. The marina’s 35-year lease expired at the end of June.

Five groups pitched their plans. Last month, a city-appointed selection team expressed its preference for a proposal from a company called David One, which pitched an expanded marina, public park and tiki-hut-style restaurant on the property. The proposal from Scott Wessel, the current marina and restaurant operator, came in second place.

City officials sought to move quickly. Because the property is on the waterfront, any changes to the lease must be approved by public referendum, and there is a July deadline for submitting questions for the November ballot.

City Manager Johnny Martinez had accepted the recommendation to move forward with David One, and even included it on the agenda for Thursday’s commission meeting. But he pulled the item late Wednesday, and sent out a note rejecting all proposals Friday afternoon.

He did not state a reason, but Mayor Tomás Regalado cited “irregularities’’ in the bidding process.

Earlier this month, City Hall insiders and Coconut Grove gadflies were buzzing about how the city was handling the project. Community activist Harry Gottlieb complained that no Coconut Grove residents or waterfront developers had been tapped to sit on the selection panel. Attorney Michelle Niemeyer alleged the process had not been conducted in the sunshine.

There were also concerns that the selection panel might not have scrutinized the bidders closely enough. The David One proposal, for example, was called into question by competitors after allegations surfaced that the team’s marina operator, Norman Wartman, had overstated his experience and failed to disclose a lawsuit.

Wartman called the allegations nonsensical. He said he has operated a marina on Key Largo since 1990, and that a lawsuit he is currently involved in has nothing to do with the bid for Scotty’s Landing.

“Whoever came in second or third is using whatever technicality they have to upset the apple cart,” Wartman told The Miami Herald.

Wessel came under scrutiny after records circulated showing he has never paid taxes on the Coconut Grove property since starting there, in 1976. City bidding rules automatically disqualify from consideration candidates with outstanding tax issues.

Wessel’s attorney Norman Segall claims the lease was executed at a time when state law contained real estate tax exemptions for municipally owned property. He pointed to a 1996 legal opinion from City Attorney Julie O. Bru saying the marina’s failure to pay property taxes did not constitute a default on the lease. Neither the city nor the county pursued Scotty’s for the taxes.

But other legal opinions and court cases contradict Bru’s opinion.

“Some lawyers say Scotty’s should have paid. Some say the city should have paid,” Regalado said. “It’s complicated, but I think the taxes are definitely an issue that should be discussed.”

Regalado noted that Scotty’s is currently on a month-to-month contract with the city that requires the business to pay property taxes.

At Thursday’s commission meeting, commissioners had sharp words for City Hall staffers. Commissioner Frank Carollo said he was “disgusted” by what he considered a lack of diligence throughout the process.

Said Chairman Francis Suarez: “I have serious misgivings about the way this was handled from beginning to end.”

Martinez apologized. “Could the process have been better? Absolutely. We rushed it” to meet the ballot deadline, he said from the dais.

In the end, the city manager decided to scrap the proposals and start from the beginning. He also tossed the lone bid to operate a fine dining restaurant on a nearby parcel.

Wessel said he was disappointed, but still determined.

“We intend to seek a new lease so Scotty’s will continue to be Scotty’s,” he wrote in a statement to The Miami Herald.

Stephen Temes, the principal of the David One group, said he, too, intends to submit another proposal.

There won’t be time to solicit new bids before the ballot is set for the November election, so Scotty’s Landing will be allowed to continue operating for at least another year, Regalado said.

The mayor noted big public projects like this don’t come around often.

“But when they do, and there is such a great property, everybody goes crazy,” he said.