Miami-Dade County

Vote looms to declare Flagstone in default of Watson Island lease

Flagstone did finally open the marina, where gleaming yachts are docked by the dozens on any given day. Next to the marina is The Deck at Island Gardens, now closed.
Flagstone did finally open the marina, where gleaming yachts are docked by the dozens on any given day. Next to the marina is The Deck at Island Gardens, now closed.

A showdown is looming between the Miami City Commission and Flagstone Island Gardens that could see the city boot the developer from one of the most valuable pieces of waterfront land in South Florida.

Miami Commissioner Ken Russell on Thursday announced his desire to declare Flagstone in default of its amended 2010 lease for the southwest corner of publicly owned Watson Island. Flagstone has held the property for about 15 years, going back to when the public approved a mega-yacht marina, hotel and shopping complex in 2001.

The developer so far has built only the marina, blaming 9/11, the Great Recession and a legal battle with Venetian Causeway residents for its woes. This month, Flagstone and Miami administrators say the developer met a May 1 deadline to begin upland construction when it began the job of excavating and moving utilities to prepare for foundation work.

But echoing criticisms of that stance, Russell said it seems clear that Flagstone defaulted on its obligations to obtain all material permits and break ground, arguing that a phased permit for the project expired and wasn’t reinstated until May 4. Under its lease, if Flagstone missed its construction deadline, Miami’s government has the ability to cut ties with Flagstone and take back the marina, he said.

“At this point, I have to ask, is Flagstone even relevant anymore to the vision of what our public land on Watson Island could and should be?” Russell asked in a statement distributed to other commissioners. “Is this project — should it ever be built and I’m pretty skeptical about that — what Miami needs and deserves?

Russell had intended to push for a vote Thursday to declare Flagstone in default, but he miscalculated the amount of work the commission would have to do when he set up a last-minute “pocket item” as a discussion to come at or after 5:30 p.m. When the meeting ended around 4 p.m., he was forced to show his hand, at which point some of the other commissioners said they were uncomfortable making a potentially huge decision on such short notice.

In response, Russell said he’d bring an item on the city’s May 25 agenda. He’ll almost certainly have support from Commissioner Frank Carollo, leaving the question of whether one of the city’s other three commissioners will join them.

After the meeting adjourned, Flagstone lobbyist Brian May showed up at City Hall. May bumped into Carollo and asked with a smile if he’d missed anything. A few minutes later, he stepped into the commission chambers and read Russell’s statement.

Asked about his thoughts, May said Flagstone remains in good standing with its lease even as he contends that the city is putting the developer through extra hoops and red tape. He said the city would face exposure north of $100 million if it followed Russell’s proposal.

“I think I’ll keep my powder dry” for another two weeks, May said.

This article has been changed to accurately reflect a quote attributed to Brian May.