Flagler County and City Near Deal to Avoid Annexation Lawsuit But for Last-Minute Conservation Demand on Developer

Flagler County government and the city of Flagler Beach have resolved four of five differences that had the county on the brink of suing the city over the city’s annexations of Summertown and Veranda Bay, two large planned developments on either side of John Anderson Highway. 

The resolutions were attained in a 70-minute negotiating session between the two sides Friday at the Government Services Building, making further steps toward litigation very unlikely. The two sides’ elected boards must ratify the agreement later this month. 

Three of the issues concerned maintenance and traffic issues on John Anderson Highway. All three were resolved with, among other solutions, an $830,000 pledge by the developer to defray the costs of impacts on John Anderson. Flagler Beach’s assurance that it would provide utility services to the new development was the fourth. 

 “We feel that this issue is satisfied,” Petito said of that and the three other issues, wrapping them up within minutes of the meeting’s beginning. (A full audio recording of the meeting is at the foot of the article.)

Not so the fifth issue. 

As framed at that meeting–or rather reframed from the way the county had discussed it publicly  previously–the hangup was a surprise to everyone in the room but county officials. 

The county is hoping to buy 153 acres of the 545-acre tract that forms the Summertown portion of the development. The developer has agreed to sell. The county needs state grants, under the Florida Forever program, to help finance the purchase. That process has started. The county and the developer have agreed to a two-year window. That should have resolved the issue. 

But the county is making a new demand on Ken Belshe, the representative of SunBelt Land Management, the parent company of Summertown and Veranda Bay. Failing a successful land conservation deal, the county wants assurances that the 153 acres will still have “certain protections,” County Attorney Michael Rodriguez said. 

“The densities would remain the same,” Rodriguez said. Summertown as currently planned would consist of 1,640 housing units and 840,000 square feet of commercial space. “Your calculations of the overall number of units would then take into consideration that area to remain in a preservation state in order to be consistent with your floodplain protection provisions.”

If the sale goes through, “it’s a moot point,” Rodriguez said. If not, the county was going to propose a conservation easement on those 153 acres, and “interim protections” meanwhile. A conservation easement means the land would remain in Belshe’s hands, but he would not have the rights to develop it. There was no mention of compensating him for it. 

Belshe was stunned by what he was hearing. It was all news to him. 

The gap was not minor. It is unlikely to derail an agreement on the other issues, because the county and Flagler Beach are not at odds on the fifth issue, as it turns out. But it creates a new complication. 

“We negotiated this in a room, and most of you guys were in there, and this was not an issue,” Belshe told the negotiators. He was referring to a previous, private meeting with the county that resolved the four other issues, and led to the $830,000 pledge. “The conditions about the John Anderson highway and the contribution to all that was supposed to put all the issues to bed. This was not one of those. And so I don’t know where this is coming from, to be honest with you.”

In seven years of public appearances and negotiations, Belshe had always spoken affably and congenially. The more he spoke on Friday, the more his voice rose. 

“I entered into the will-sell letter agreement, which is what Andy Dance asked for. It’s exactly what he asked for,” Belshe said, referring to the commissioner largely instrumental in securing a proposed deal for the 153 acres. The handshake was at a meeting with county officials. “He looked at me across the table. He shook my hand. He said, ‘We have an agreement. That’s what I wanted. The will-sell letter,’ and that’s exactly what we did. I’m on record in many public hearings where I said, Yes, we’re a willing seller of this property, and I’d rather sell it to you than develop it, but I can’t give it to you. That’s crazy. And so where’s all this coming from all of a sudden? We had an agreement.”

Belshe added: “What you’re suggesting, what you’re suggesting is an outright taking of our property. That’s what it is.” 

Michael Chiumento, the land-use attorney who represents Belshe, was also in the room. He stood up, approached the negotiating table, and calmly said: “As I’ve gotten older, I’ve learned a word that is very easy to say that gets to the heart of the problem, and the answer is: No. Michael,” he said, addressing Michael Rodriguez, the county attorney, “your proposal is No from the developer. So I wanted to get that out there so that you guys could then sit and brainstorm with solutions. Because it’s no.”

Chiumento said it was clear that between the previous meeting with Dance and Belshe and Friday’s negotiating session, there’d been back-channel conversations with other commissioners     “about why they were dissatisfied with the prior deal, and now this is your idea. Well, there may be other ways to get to yes, but this is a hard no, and the only way to get to a yes is to work in good faith with us, as we have done with you for two and a half years on this.” 

Rodriguez himself was clear about that direction: “I’ve been given direction for some type of assurance in the event the deal falls through.” He did not say where the direction came from, or from whom. It certainly was not in an open meeting, and therefore not by a public consensus of the commission. 

“What if we get down the road two years and you got three Kim Carneys on the board, then what happens?” Belshe said, referring to the commissioner he suspects has had a particularly large hand in steering the county toward confrontation with the city, and to the points the room was discussing Friday. “This is this is not the real world.”

Flagler Beach City Attorney Drew Smith saw a way out of the conflict. “Spitballing,” as he put it, he seized on an idea Belshe had hinted at: should the land purchase fail, the county and Belshe could arbitrate a deal through three appraisers, setting a value on the conservation easement. That would lock in the process the county commission is looking for, should it become necessary, Smith said. 

“How is it different for me, I can’t develop a property if there’s an easement. It’s the exact same thing,” Belshe said. 

But he would be compensated for the land. “It is really just appraisers doing their jobs, and then the arbitration, which is one and done. So it shouldn’t take long,” Smith said. 

The city and the county agreed that nothing stopped the county from negotiating bilaterally with Belshe ahead of the Feb. 23 meeting, when the county administration hopes to bring an agreement to the County Commission that could potentially resolve all the issues, the fifth one included, and stop the litigation clock. 

“We started with five. We’ve resolved four,” Smith said. “So I think if we stop where we are now, we’re all leaving the room with one conflict remaining to present to our boards. If the county is made happy by efforts outside of what the city can offer at this point, between now and [the next] meeting, then wonderful. We can deal with that. But I don’t know that where we are at this moment, we can put together the agreement that says everything is resolved, because I’m hearing a conflict remaining on the preservation area.”

FlaglerLive audio of the full meeting (click here for downloadable link):