Two years after the Flagler County Commission agreed to let Captain’s BBQ at Bing’s Landing build a bigger restaurant in the center of the 7.5-acre public and historic park then reversed course amid a torrent of protest, and almost a year and a half after Captain’s sued the county for breach of contract, Circuit Judge Terence Perkins Thursday will hear and possibly rule on the county’s motion to throw the case out.
Captain’s owners argue that the breach of contract is in black and white. The county’s argument is a curious one: the county is arguing that it did not follow its own rules, so the lease amendment is invalid. That, of course, is one of the argument Hammock opponents to the lease amendment had made, the argument then-County Administrator Craig Coffey and the commission rejected as invalid when they approved the lease amendment, since–or so they argued–Captain’s was the existing lease holder and the amendment was just that, an amendment. In fact, it was a new lease hiding under the guise of an amendment, since it entirely changed the complexion of the park, altered the original lease through the construction of a new building on a new location, with more seats ad new, generous subsidies.
Coffey is long gone, making him an easy scapegoat for the county’s novel legal argument: that the county–the administration and the county commissioners who voted for it–broke the law when the commission approved the amended lease, so the lase is invalid.
It’s not every day that a government calls itself lawless–in its own defense, no less.
“The county did not engage in the ‘highest and best bidder’ process required under [state law],” the county now argues in its audacious motion before Perkins. It is also arguing that the amended lease was never rescinded, as Captain’s argues, so much as “reconsidered.” That means in the county’s view there never was a reversal. The county is parsing words of course: while the word “rescinded” never appeared in the county’s move to reverse course on the amended lease, it was well understood at the time that the amendment as Captain’s had crafted it with Coffey was dead. So was the proposed new building.
But if that may be clear to those who followed the two-year ordeal, it will not appear that way to a judge–and a textual judge at that, with zero patience for legal penumbras and emanations–who is approaching the matter with a blank slate and only the documents and arguments lawyers are submitting to him.
In sum, the county’s argument is two-fold: the amended lease was “illegal and void from its inception.” (Put another way, the county is throwing Coffey under the bus, though it would have to do likewise with current commissioners if its argument is to carry any legitimacy.) So the county couldn’t have either breached it or rescinded it. And even if it were legal, the county hasn’t breached it because the timeline that would have enacted the amendment had not kicked in.
Perkins is a stickler for the letter of the law. If the county commission approved a lease illegally, that’s a problem, but Captain’s has contract law on its side. The way the amended lease was approved, without bidders, may be a problem, but it’s the commissioners’ and the administration’s problem, not that the of the business. In other words, if a government approves a contract or a lease illegally, those who approve it on the government’s side may be liable for breaking the law, but the liability doesn’t extend to the business, which would be in the role of innocent bystander in that case. The business can;t be made to pay for the government’s shoddiness (or shadiness).
The history of the case is all grays.
Captain’s has been leasing its current location at Bing’s since 2011. The terms have been very generous. But it’s also been the only business that’s made a serious go of keeping the restaurant going through the years. It’s popular, in a relatively discreet location, more a complement to the park than its centerpiece. That’s what the lease amendment was proposing to change: te restaurant was to be come a centerpiece.
The County Commission met on Nov. 19, 2018. The lease amendment that was to allow Captain’s to expand–Captain’s would have built the new structure at its own expense–and benefit from two decades of rent well below market value was on the agenda, albeit on its “consent” portion, where county administrators place items they’d rather snuck through without discussion. The item was pulled for commission and public discussion, got plenty of it from both, and the commission approved the lease amendment, 3-2. It was a huge victory for Captain’s owners Mike Goodman and Chris Herrera.
It was also short-lived. The Hammock community had already been mobilizing against the lease amendment. It started weekly protests. Much of the anger was the result of the county’s clumsy strategy: then-Administrator Craig Coffey had preferred a more secretive approach to a more communal one, springing the lease agreement on the commission at the last minute instead of working with Hammock residents toward an acceptable compromise. The strategy left Captain’s owners looking like they’d tricked residents, when in fact they’d simply sought as good a deal as they could get–and Coffey gave it to them without prior input from commissioners or the community.
As commissioners began to feel the political fallout, they realized the lease agreement was a mistake. They unanimously voted to reverse on the lease agreement in early December 2018. Weeks later Coffey was forced out. With Captain’s owners as willing partners, the county began negotiating alternate locations in the park. But even that approach failed, with Captain’s hardening its position just as the county did.
In June 2019, Captain’s sued the county. In what started as what Coffey thought was a checkers game and turned into a chess game since, the lawsuit might have been Captain’s latest tactical move, though once the county is in litigation, it reflects County Attorney Al Hadeed’s approach: it’s all in. But he’s not the county’s litigator. Dale Scott of Orlando is.
Mediation between the two sides appeared to make some headway. But just like the previous history of relations between the two sides, appearances of cooperation did not live up to the substance of the mediated agreement. The restaurant’s settlement offer seemed more like another demand. The restaurant was willing to stay in its current location, but it wanted preferential use of a popular pavilion at Bing’s on big chunks of the calendar–all major holidays plus 18 weeks. The proposal gave Captain’s even more rent subsidies than the original lease. (See the full proposal here.)
Even after Captain’s dropped its demand for 18 weeks of preferential use of the pavilion, commissioners rejected the proposal. The case was heading to court.
Then Heidi Petito, the acting deputy administrator, had an informal conversation. (Petito had also been Coffey’s point person in late 2018, when it was developed, so she’s likely the most familiar person with the history and details of the Captain’s saga, going back to 2011.)
According to County Administrator Jerry Cameron, “they just bumped into each other.” He did not say where. He did not say how. Given the county’s ongoing litigation, it’s usually standard operating procedure to ensure that no such informal bumps take place. But an “informal conversation” took place. Petito did not summarize it to the commissioners, who could not solicit her analysis directly. Cameron played go-between, saying that Goodman allegedly felt that “possibly this board would have been favorable had Captain’s done two things, and that was to not put preferential treatment with regard to the pavilion into the agreement, and secondly, that in the last lease period, that we would go to market rate. And Mr. Goodman said well, we’d be happy to entertain that if you would put it in writing.”
Cameron told commissioners of the Petito-Cameron conversation in mid-October.
The 2011 lease called for $500 a month rent, with increases of $40 a month at each annual anniversary, making today’s rent about $860 a month. (See the 2011 lease here.) The proposed agreement allows four four five-year renewals of the lease, with rent rising to $1,750 a month in 2031, $2,500 five years later, and $3,500 by 2041. The proposal makes no provisions for inflation, no 3 percent a year adjustments. Cameron wasn’t clear when that market rate would kick in. At one point he said it would be “in the last lease period.” That would mean it would kick in starting in 2041. But then he said it would be “in the third five-year extension,” and said that would be in “10 years,” when in fact the third five-year extension begins in 2036–in 16 years, not 10. (Cameron’s grasp of facts is not always commanding.) The lease periods are clearly outlined in the proposed agreement.
Either way, the market rate kicking in would be a very long time from now, when all the current principals will have long moved on (Goodman would be 84 by 2036).
Commissioners were cool to Goodman’s latest proposal. “There are other items in that mediation that I had concerns about,” Sullivan said. “But it’s a step forward, that’s movement forward, but I think it needs to be looked at.” But he also noted the court hearing ahead.
“I see no reason at this point given what Mr. Cameron has said from my position to do anything but let it proceed forward as we agreed to, to court,” Sullivan said. Cameron suggested a “shade” or closed-door meeting. Commissioners may hold such meetings for few reasons, among them discussion of pending litigation, so as not to give away their strategy.
“Perhaps if you did it in a shade and you had that approval in your pocket it might be useful in negotiating during those legal proceedings,” Cameron said, giving away the county’s strategy. That’s what commissioners agreed to, holding that meeting last week. Because litigation is pending, they’re not supposed to discuss the meeting’s substance. But that’s irrelevant as far as Thursday’s motion before Perkins is concerned: the judge is hearing just that motion–assuming Captain’s and the county don’t settle beforehand. That, too, remains a possibility, though the settlement agreement would have to go before commissioners, in a public meeting.