Downtown Miami

Residents sue to stop megayacht marina and resort on Miami’s Watson Island

Venetian Islands residents critical of the oft-delayed plan to build a megayacht marina and resort on public land on Watson Island have sued to block the project, claiming the Miami city commission’s recent re-approval was illegal.

The residents, Stephen Herbits and Sharon Kirby Wynne, contend the city renegotiated the 13-year-old deal with developer Flagstone Properties — which has yet to build anything — on terms that violate the city charter and some key conditions in the ballot language voters approved in 2001.

Although the city charter bars consideration of leasing public property at less than full market value, the modified deal city commissioners approved in May kept minimum lease payments for the waterfront site at $2 million a year, the same amount in the original 2001 deal.

But Herbits, who has also sued the city successfully for withholding public records on the deal, uncovered a pair of appraisals of the property, commissioned by the city, that put current market rent for the site at over $7 million a year because of a sharp increase in its value.

The suit, filed by Coral Gables attorney Sam Dubbin originally on Friday and then in a slightly amended version on Monday, argues that the city, which has modified the deal with Flagstone three times since 2010 to rescue the foundering project, was legally obligated to increase the rent accordingly.

An internal email released by the city in August in response to a court order, and included in the suit, appears to show officials knew of the new appraisals, conducted earlier this year, several days before the commission voted in May to approve the latest version of the deal.

But at least three city commissioners said in interviews they were unaware of the new appraisals when they agreed to move forward with the project. The appraisal issue, however, was not raised in a subsequent public hearing on the project.

The suit also contends that the city ignored key conditions in the ballot language that went to voters in 2001. That language, as well as the legally binding proposal by the developers, promised a minimum $2 million a year in rent, but Flagstone has never paid that amount even though it has controlled the land for years.

The plaintiffs also argue that the city is improperly now allowing Flagstone to build the project, which is supposed to include a marina, a hotel, shops, restaurants and public spaces, in phases. The suit says voters were promised an “integrated’’ development — in other words, that the project would be built all at once to ensure all the planned elements are in fact completed.

Flagstone says it has started construction on the marina, citing environmental remediation work now under way at the site, but the firm has not said when the rest of the project would be built.

The residents’ suit asks a judge to throw out the existing contract with Flagstone and require the city to start over with new bids.

Brian May, a lobbyist for Flagstone, said he could not comment in detail because no one at the firm or the city of Miami has seen the lawsuit.

“Based on what you’re telling me, this doesn’t seem to be anything new from Mr. Herbits,’’ May said.

Herbits, a former Seagram Company vice president and a former high-level Pentagon consultant, first sued to stop the project a decade ago without success. At that time, he challenged the legality of the development permit granted by the city.

Along with the lawsuit, Herbits and two other project critics also launched Coalition Against Causeway Chaos to oppose the Watson Island project. Its website, which contains documents and news stories about the deal, suggests the project could choke the MacArthur Causeway with traffic.

Last month,, an independent news organization, reported that Flagstone hired a lobbyist close to Gov. Rick Scott to counter objections to reauthorization of the stalled project by state officials who wanted to pull the plug on it. The story, published in the Miami Herald, said officials dropped their objections and Scott and the Cabinet approved a critical state waiver the developers sought.