In a significant victory for county government, the owners of the derelict Old Dixie motel have 10 days to provide the Flagler County Clerk of Court a $250,000 deposit they have owed county government for three years as part of an agreement on the rehabilitation of the motel, Circuit Judge Chris France ruled in an order issued today.
The decision follows May 29 hearing before France where the county asked the court for a partial summary judgment on a case the county filed in 2021 against the then-owners of the motel. New owners acquired the property that May, pledging to the county that they would pay off all nuisance and Health Department fines, clean up the property and begin rebuilding it into a viable Hotel Henry, as they called it.
Part of the deal hinged on the owners, an opaque partnership with a Manhattan address, issuing a $250,000 deposit to the county. The county would use the money in case the owners reneged on their pledges–either to demolish the building or to secure the property. The owners, through their lawyer and through a Greg Kong, a local Realtor whom they’ve employed as their point man, have argued that the county’s conditions and timetables were impossible to meet.
The same argument was presented to France, who was dubious: it had been three years. The judge did not see why the partners were not willing to put up the $250,000, especially since they did not appear to be short of money. They have bought numerous and expensive properties surrounding the hotel. When France asked the owners’ attorney whether there was any intention to provide the $250,000, the attorney said, flatly, no. The owners likely lost their case then and there.
“The Defendant is a seasoned commercial investor who stood on an equal footing with the County to negotiate the contract at issue herein,” France’s order reads. “The Defendant was at all times unhindered and able to conduct its due diligence investigating the responsibilities and actions needed to fulfill each prospective term of the prospective contract. The Defendant was at all times an arm’s length purchaser free to walk away without any repercussions. As of then, they had no dog in the hunt. They were not involved in any of the litigation or enforcement actions in process by the County— those were the Co-Defendants Zulali(s),” the previous owners of the property. “If they were, some of the Defendant’s arguments as to the contract being illusory, unconscionable, or impossible may be debatable.”
Those characterizations of the deal had been part of the owners’ arguments to the court as their attorney claimed they did not have to meet the terms of the 2021 contract.
France did not agree. The owners “entered into their agreement and the Defendant refused to fulfill its end of its part of the bargain. The contract is in no way illusory or unconscionable,” he ruled, especially since the terms of the contract had been clear.
The motel at 2251 S Old Dixie Highway has been decaying for a decade and a half. The county declared the property a nuisance a few years ago, when it was collecting graffiti, vandals and errant acts of desperation. The new owners cleaned up the ground of its most obvious debris and fenced in the property, but have yet to give the county building plans for the new hotel.
A few months ago the county issued a demolition order. The owners contested it before a magistrate earlier this month and won a delay: the demolition would be too drastic a move at this point, the magistrate ruled, finding enough room for the owners to try again. But the permission is not open-ended: the magistrate invited the county to renew its case for demolition at a later date, if nothing changes. That demolition order was not part of today’s court ruling, except as a peripheral fact the owners’ attorney mentioned to France during the hearing.
“We’re ver pleased with the judicial outcome. We do believe the judge’s order is correct, and we will proceed accordingly,” County Attorney Al Hadeed said this afternoon. Assistant County Attorney Sean Moylan had handled the case, though the summary judgment motion was argued for the county by Abraham McKinnon.
“It is not a surprise from the standpoint of the law and the facts that we were able to establish through the factual discovery process,” Hadeed said. “The value of the court’s opinion is that the judge fully understood the context of the dispute and the relationship of this development group to the long saga that is the Old Dixe Motel. He understood that they were sophisticated investors, they had the opportunity to not do the deal, they did the deal knowingly in exchange for our forbearance on pending cases that we had filed, specifically the public nuisance cases. The judge did not make reference, explicitly anyway, to the additional property that they purchased in the immediate vicinity of the hotel, which clearly suggests to the casual observer that they could afford the deposit. So there was a bit of an incongruity” between the owners’ implicit claim of poverty and the facts on the literal ground.
There is a continuing incongruity between the lack of noticeable work on the property and the more noticeable, and expensive, counteractions in court and before a local magistrate.
If the owners don’t pay in 10 calendar days–not 10 working days–“we will petition the court to take action to compel the payment, to impose sanctions,” Hadeed said. “We have some discretion on how to apply those funds, including to offset the cost of demolition.”
Celia Pugliese says
Justice served.
Skibum says
These defendants have been jerking the county around for way too long, taking advantage not only of laws that make it extremely difficult to condemn and demolish abandoned, decrepit property, but also thumbing their noses at the county’s attorneys and even being so brazen as to openly admit they never had any intention to put up the #250,000 they promised to pay the county three years ago. Well, it is about time a judge slammed down the gavel on these con artists. The only thing that the Old Dixie Hotel needs to make it look a lot better is a bulldozer with a full tank of diesel fuel and one operator in the driver’s seat.
Jane Gentile-Youd says
Wow for now.Gotta’ catch my breath .( Will share my 11
years of efforts frustration and anger tomorrow)
Just rejoicing..with caution. Nighty night .I am happy with Judge France .
About time says
Fantastic! The county got it right this time!
Erod says
What exactly was that ?
NJ says
This would be a Great h for Tunnel 2 Towers to build apartments for Flagler County Homeless Veterans. Rep Mike Waltz and Greg Hansen, Flagler County Commissioner (Both Veterans) should HELP find Homes for Homeless Veterans!
c says
Good Stuff!
Pierre, I am looking forward to a follow-up on the 30th, please :)
Careful what you wish for says
“Part of the deal hinged on the owners, an opaque partnership with a Manhattan address, issuing a $250,000 deposit to the county. The county would use the money in case the owners reneged on their pledges–either to demolish the building or to secure the property” Flaglerlive .
So the judge ordered the owners to place the 250 k deposit with the Court. This doesn’t mean the county can demolish the building. In a previous court ruling the county lost its bid to demolish the hotel, so now what ? If the owners renege on their agreements to rehab the hotel all it means is they loose the money. The owners appear to have a lot of money considering their reported real estate purchases and I’m sure a crafty tax attorney can work that to their advantage.
So I ask what did we win ? Hope the owners are not a the vindictive type that old hotel could be renovated to accommodate a lot of different uses i.e. homeless shelter, drug rehab, migrant & refugee settlements.
There was no victory here.
TRC Meeting says
It certainly puts them in the hot seat. They will need to pay up and move forward or lose the money to demolish or secure the dwelling. They were not prepared for this mornings TRC-Technical Review Committee meeting and have been given until June 28st to give the information the county needs to be put on the July 18th TRC meeting.
They still do not have an easement for water. I dont understand why they allowed to be put on todays TRC meeting when they clearly were not prepared as usual.
One More Time says
It certainly is better than the judge not making them deposit 250K! The county won and also sent a message finally to the developer that their time has run out and they need to decide if they are going to build Hotel Henry or not.
Jane Gentile Youd says
D E M O L I T I O N is the answer!!!!!!!!!!!!!!!!!!!!
‘On the record’ former Flagler County Interim Administrator Jerry Cameron, as of 3 days ago, said he is still willing to personally drive the bulldozer – yep he’ll tell you himself. Bulldozer just took on a new meaning. The Manhattan Mob who owns the POS have submitted ‘secret’ plans to our illustrious lying Planning Director which were not made available until ‘after the item was heard by’ the semi-secret Technical Review Committee.
And so it does not end because without any public notice, without any access to the new ‘plans’ ,the Manhattan Mob presented ( I was born in Manhattan) the (then still secret to us ‘)plans’ to the board, NO PUBLIC NOTICE REQUIRED ‘CAUSE NOT PUBLIC HEARING SAYS ADAM’…..
And that’s just today. D E M O L I T I O N is the only sensible, viable solution. Just ask the Sheriff, the Health Department, Code Enforcement and us whose neighborhood remains degraded value wise.
I sound like a broken record and I am one- I know but once again: Fire Hadeed Fire Mengel demote Heidi back to General Services or give her walking papers also.
Bobby says
What took the County three years to finally demand payment that has been owed from the get go? Poor job County wake up and do your jobs in a timely manner.
About time says
If it was not for Jane Youd it still probably would not have happened. The county needed to be right on top of these guys and they were not.
dave says
SO they put up the $250k, and the building still stands. This is a joke by the court to help these building owners. How about, $250k and the building has to come down in 30 days or its $250k per month the building stands.
Jane Gentile Youd says
dave
They have 8 days more to put up the $250 3 yesrs past due. Time to get the shovels out
Billy says
It’ll be a good place for storage sheds or strip malls. That’s all this city is anymore.