The Flagler County Commission today decisively rejected a proposed mediation agreement between the county and Captain’s BBQ that would have settled the lawsuit Captain’s filed against the county a little over a year ago, once the commission rescinded approval of a new lease with the restaurant.
The proposal was almost bizarrely generous to Captain’s, providing for continued low rent for two decades (until 2041), giving Captain’s a right to use a pavilion in the park on six holidays, without applying for the use as any other user would have to, and committing the county to carry out vast repairs upfront and all repairs and maintenance on the building, inside or outside, through the life of the lease.
The agreement was in essence more generous than the disputed lease agreement but for one difference. The 2018 lease would have permitted Captain’s to build a larger restaurant in the center of the park, at Captain’s expense. That lease drew staunch opposition from Hammock residents and others, forcing commissioners to backtrack and rescind their approval. Commissioners were willing to make some concessions, such as repair the existing structure and provide for some maintenance in the future. But they were not willing to turn Captain’s into a welfare account on taxpayers’ dime.
“I’m absolutely in favor of declaring an impasse on this mediation. There’s a number of things here that are very concerning to me and that I could not accept. The rent is not even close to market rate,” Commissioner Donald O’Brien said, using the most forceful terms against the agreement. “I can’t accept any control whatsoever of the pavilion for not even one day, it should be first come first served for the public. I’m real uncomfortable with renewal options that take us out to 2041. As I said when I voted no against this thing from the start, I’d be perfectly happy if this lease expired in 2026 as it currently stands, and then we either rebid the whole process out again, or do away with the facility as it is.”
The board could have approved the agreement, or directed its attorney to continue mediating–or declare impasse. Commissioners declared impasse. That means Captain’s lawsuit against the county will proceed, though that won’t affect Captain’s continued operations as a restaurant at Bing’s.
Commission Chairman Dave Sullivan said the only option he’d consider was impasse. Commissioner Greg Hansen agreed, and moved not to accept the mediation proposal.
Impasse means the mediation is over. “The consequence of that decision is then, that the litigation will renew.” The county has filed a motion to dismiss challenging the legal argument Captain’s is advancing. (The county also has a nuisance case previously settled in which the county is invoking an indemnity provision.)
When the proposal was initially submitted to commissioners, Captain’s was asking for 18 weeks plus six national holidays when it would have first right of refusal on the use of the pavilion. At the beginning of today’s meeting, that had been reduced to just the six holidays. But it wasn’t nearly enough.
Jane Gentile-Youd, a former commission candidate and one of three members of the public to speak, said the county can recover attorneys’ fees should it win its case. She called the proposal “the biggest piece of garbage I have ever seen,” though she has routinely applied similar hyperbole to a long list of county projects or issues over the years. “Let them live out the lease or go to hell,” she added.
A Palm Coast resident wondered why residents pay market rents and a business would not. “I’m just baffled how the first agreement being proposed ended up being better than the second proposal being proposed,” the resident said. Flagler Beach City Commissioner Rick Belhumeur, addressing the commission, called it “absurd” that the lease drawn out to 2041 without profit sharing with the county. He said Flagler Beach’s lease with the Funky Pelican includes such a profit-sharing provision.
The new lease terms would have begun in 2026, leaving in place the original 2011 lease, which commands less than $1,000 a month rent.
Commissioner Joe Mullins appeared more interested in ending litigation, saying the county had spent a ear and a half on it already at great cost (at one point he asked Al Hadeed, the county attorney, how much he’d be making per hour in the private sector. Hadeed seemed taken aback by the question, but said $450 to $500 an hour. Hadeed makes a fifth to a quarter of that.)
Mullins then returned to the issue a few moments later.
“Mr. Hadeed, we do face possible litigation, so whatever we decide up here, because that lease was signed so fast, we still face possible litigation–”
“We are in litigation right now,” Hadeed said.
“Well, an actual suit, it will go to that court, and they will make a decision that we have no control over, correct? And we’ll be forced to follow it,” Mullins continued. (The county has been facing “an actual suit” since June 2018: that’s why the mediation step, which is required in all civil suits.)
“Well, the route of this case will likely be through a jury trial,” Hadeed said, instructing Mullins on the basics of the judicial system, “then the jury will render its verdict and the court will act in accordance with the law, then that judgment will come down, either party can then appeal, but ultimately the court–the court system is going to decide who has what, who owes what, what the attorneys’ fees are, etcetera. Does that answer your question?”
“Yeah, I just want to say based on that, and business,” Mullins said, referring to his own experience as a landlord, “we have had some lawsuits like this where we have had to have tenants that we did not want to have, and it went very south like this, and we were forced to pay very sizable–either pay a very sizable judgment or we had to have them as a tenant, so I do want the public to understand that even though we’re doing this up here, which I totally support the conditions that we are faced, with what commissioner O’Brien said, but we are faced with that.”
O’Brien then clarified, addressing Mullins directly: “For me there are just too many negatives here, we took our best shot at the mediation,” O’Brien said, “and if this is the end result of it at this point, as I’ve already stated, I’m making my comments and my recommendation with the full understanding that we’re going ahead to possible jury trial, and if that’s the way it is and we can’t get a better draft mediation settlement than what we have now, then that’s what needs to happen in my mind.”
The vote to reject the proposed agreement was unanimous. That does not preclude a different kind of settlement: Captain’s could conceivably have been testing the commission’s limits with the proposal, and now may itself settle for something less ambitious. Jury trials on these matters are rare. But absent that settlement, the county’s slow-burn case with Captain’s BBQ continues.