Developing the outdated structures of a city’s downtown is a daunting task, one that many developers shy away from, in part because “historic properties” often have a lengthy environmental history. However, anything associated with a downtown has become hip, trendy, and cool, and developing a deteriorated downtown into a mixed-use mecca can realize huge urban renewal and economic benefits. In Hollywood, Florida, efforts to delay environmental proceedings associated with a downtown revitalization project has just drawn sanctions from the court.
In Icon Office Building, LLC, et. al. v. City of Hollywood, et. al., CACE-15-020788. (Fla. 17th Cir. Ct. 2016), Icon Office Building, LLC and Suntrust Parking Lot, LLC were passionate and proven developers that wanted to improve downtown Hollywood by partnering with the City of Hollywood to bring entry-level luxury residential condominiums, create retail space capable of attracting national tenants, and ultimately add a class A office building to the downtown area.
To finalize the deal, developers entered into an agreement with the city, wherein the city conveyed a parcel adjacent to a plat that was already owned by the developers. The city affirmatively represented that the parcel that it was conveying was free from any environmental contaminants. While the city conveyance was underway, the developers built a 14-story class A condominium/mixed-use development, together with a parking garage, on their own parcel with plans for a parking lot and another high-rise on the parcel conveyed by the city.
But when it came time to begin construction on the city’s parcel, the Pollution Prevention Division in Broward County discovered contamination that could take up to 10 years to remedy. It was further discovered that the right of way adjacent to and in front of both parcels was leaking contamination onto both plats. After discovering the contamination, the Pollution Prevention Division required the city to take the necessary actions to remedy the contamination at its sole expense. Next, the developers moved for a temporary injunction to prevent any further pollution.
Prior to the injunction being placed on any court calendar, the city persistently attempted to avoid any hearing and claimed unavailability for the entire month of February 2016. But, understanding the urgency of this matter, the court set a hearing date. When the parties agreed to mediate, the injunction hearing was postponed.
In the week leading up to the scheduled mediation, and nearly one month after the parties agreed to postpone the injunction hearing in favor of mediation, the city notified the developers that they would be cancelling the mediation because the city was unable to obtain authority from their client to do so. The developers responded to the city’s news by filing an emergency motion to compel mediation, sanctions, contempt and attorney fees, reasoning that the city’s agreement to mediate was merely a calculated tactic intended to delay discovery and push off an injunction hearing the city opposed.
Last month, the court found that the city’s position was taken for the purpose of unreasonable delay and entered an order granting the developers $6,620 in lost mediation expenses and reasonable attorney fees, which is likely the least hip, trendy, or cool thing about a downtown revitalization this year.