Miami-Dade County

Flagstone lawsuit could pit city of Miami against itself

The northwest corner of Watson Island, where Flagstone Island Gardens is fighting to build a resort and retail center. The developer has already built a marina.
The northwest corner of Watson Island, where Flagstone Island Gardens is fighting to build a resort and retail center. The developer has already built a marina. Emily Michot / Miami Herald

When Miami Commissioners voted last month to disregard city administrators’ recommendations and punt developer Flagstone Island Gardens from Watson Island, two things were clear: the contractual dispute was destined for court, and the legal fight was bound to be complicated.

But the $120 million case appears to be so tangled that two separate firms will have to represent commissioners and the city administration — raising the potential that the city could end up at odds with itself during litigation, with taxpayers footing both legal bills.

With City Attorney Victoria Méndez declaring a conflict, commissioners agreed Thursday to hire Becker & Poliakoff to represent their administration, and Dorta Law to represent the city as a whole. They voted 4-0 in favor of hiring both firms, but only after questioning why their staff would need separate representation.

“They should just state the facts and their justification for whatever they’ve done,” Commissioner Frank Carollo said.

This is a big deal and we’re making sure everybody has the assistance they need in order to get through this.

City Attorney Victoria Méndez

“In this case, the administration has a slightly different perspective in regard to this deal. They’ll need assistance … at depositions and hearings with what they can say and not say, things of that nature,” said Méndez, noting that the dual counsels were recommended by the Florida Bar. “This is a big deal and we’re making sure everybody has the assistance they need in order to get through this.”

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Miami City Attorney Victoria Mendez Miami Herald

Mendez stressed that the city will not war with itself in court, or undercut its own efforts, as some worried Thursday. But Miami’s defense of an eight-count complaint brought by Flagstone is already creating divisions.

Commissioner Ken Russell, who pushed last month to declare Flagstone in default of its master agreement to develop a $1 billion resort approved in 2001 by voters on city-owned Watson Island, criticized Méndez’s office for her handling so far of Flagstone’s lawsuit.

With Flagstone pushing a motion for an emergency preliminary injunction Wednesday, attorney Gonzalo Dorta was forced to represent the city during a hearing the morning after he was hired and on a day he was already in court defending another case, Russell said sourly.

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Miami Commissioner Ken Russell Miami Herald

Russell also criticized Dorta’s introduction of a motion to compel arbitration, noting that commissioners roundly rejected suggestions last month that they try to mediate their differences with Flagstone rather than declare the developer in default, boot it from Watson Island and take over its mega-yacht marina. He argued that the master agreement cited by the city in its default notice doesn’t even allow for arbitration.

“I want to talk to my attorney before he goes in to fight this injunction,” Russell said. “He’s busy with other litigation. He’s taking this case at lunch.”

Méndez fired back, saying that an evidentiary hearing next week is far more substantive than what took place Wednesday.

“Really what’s happened thus far is not even a drop in the bucket,” she said. “You’ll have plenty of time to address the A-game you want with your attorneys as soon as we fully bring them on board.”

She also asserted that taking a case to arbitration instead of declaring a developer in default is very different from seeking arbitration after such a declaration.

“You don’t have a law degree, and these are the nuances you fail to see.”

Mendez told Russell she’d consider also hiring an attorney he recommended, Laura Besvinick, in order to ease his concerns.

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