The city of Miami remains on the hook for more than $1 million in property taxes, after the Third District Court of Appeal upheld a ruling last week that nearly two decades of unpaid bills levied on a bayfront site in Coconut Grove should have been paid by the city and not its private tenants.
The court, agreeing with a 2013 circuit court, said the city must pay $1.4 million in outstanding taxes and fees owed for the parcel directly north of historic Miami City Hall. The ruling isn’t yet final as the city, county tax collector and Scott Wessel, owner of Grove Key Marina and Scotty’s Landing, still have time to file for a rehearing.
Norman Segall, attorney for Wessel, who was denied attorney’s fees, said his client may push the issue, considering the court wrote that the tax collector tried to “extort” money from him when it was clear the city owed the property taxes.
“We are strongly considering asking the court to rehear that aspect of the case,” Segall said.
Should that happen, it would further delay finality on an ordeal that dates back to 1996, when the county began sending the city tax bills for the property on the grounds that it was being used for private business. The city forwarded the bills to its tenants, which refused to pay and sent them back, according to the court’s ruling.
That’s what happened every year until the summer of 2012, when the county tax collector learned that taxes on the property had never been paid. He threatened to revoke the occupational licenses and corporate charters of Wessel’s businesses unless they paid more than $2 million.
The fight drew plenty of attention because Wessel’s lease had recently expired and the city was seeking bids for new tenants, with Wessel among the bidders. Wessel sued the tax collector, who counter-sued and placed a third-party claim against the City of Miami, which argued that Wessel owed the taxes.
Two years ago, Circuit Judge Peter Lopez ruled in Wessel’s favor and ordered the city to pay back-taxes due from 2007 to 2011. Lopez said the statute of limitations had run out for the previous years’ tax bills. He also denied Wessel’s demands for attorney’s fees.
On May 27 the Third DCA affirmed Lopez’s decision, saying that the city’s lease with Grove Key Marina contained no tax pass-through provision. City Attorney Victoria Méndez did not respond to a request for comment by deadline.
For now, Wessel continues to operate his businesses. The city has selected a new tenant with plans of redeveloping the site, but legal challenges have held up that project and kept Grove Bay Investment Group from taking over the site.
However, the city did get some good news last week on that front from the appellate court, which in a separate case dismissed a lawsuit over that deal. Eddy Garcia, a Grove Bay partner, did not return calls seeking comment.