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Treasure Island must pay the losses of the company that once issued short-term leases at the Land's End condos.
By KATHY SAUNDERS
© St. Petersburg Times, published May 27, 2001
TREASURE ISLAND -- It's possible the city will have to raise taxes to pay off $3-million in damages arising from a 1988 zoning decision.
The Florida Supreme Court ruled Thursday that Treasure Island is liable for Provident Management Corp.'s losses since the city stopped Provident from issuing short-term leases at the Land's End condominiums.
City Manager Chuck Coward said the losses should be covered by the Florida League of Cities insurance pool -- but that may be the next legal battle.
The league helped defend the city in court but has maintained its right not to pay any judgment. If insurance doesn't cover the loss, the city has several options, Coward said.
It could raise property taxes, which generate about 34 percent of the city's general operating fund of $5-million. The city's total annual budget is $13.7-million.
Treasure Island has a balance of about $1-million of unappropriated money in that operating budget that could be used toward paying damages.
But more likely, Coward said, the city would borrow the money from itself. There is about $10-million in the Causeway Bridge fund.
All told, the city and the league have spent $660,000 defending the 1988 action by a previous commission.
Mayor Leon Atkinson was installing a fence to keep goats and chickens out of the garden at his weekend home near Floral City when he received city attorney James Denhardt's call.
"I can't out-guess the people that did this in the beginning," Atkinson said. "I don't know how I would have felt if I had been on board at that time. I wish they (the court) had ruled in our favor, but I don't think I'm going to try to look up past officials and beat them up."
The city has 15 days to file a motion for a rehearing with the court.
Second, Coward said he wants to know if there are any issues "to see about reducing damages."
Provident president Brenton Howie remembers the day he got the letter from fire Chief Charlie Fant to cease renting units at the complex at 7500 Bayshore Drive. Because Provident was issuing short-term leases, the city insisted that Land's End was being operated as a motel, against residential zoning codes in that neighborhood.
"It was exactly 13 years ago -- May 25, 1988," Howie said. Provident continued the leasing until a judge ordered the company in 1991 to close the rental business at Land's End.
In 1994, judges ruled that Provident's business was legal and awarded $1.77-million in damages. That amount has grown by 12 percent each year.
"I have personally attended every hearing over the years," Howie said. "We were basically put out of business because of that injunction."
Attorneys for the city argued all the way to the state Supreme Court that since Treasure Island didn't secure a bond to cover potential losses, it was liable only for $100,000 -- the state cap on a city's liability in negligence cases.
The city claimed it had the protection of sovereign immunity because the zoning decision was an operational mistake rather than a governmental decision. The 2nd District Court of Appeal agreed that the case was like any other tort with the same kind of damages that would occur if a city dump truck had crashed into the rental office.
But Provident's lawyers, Steven Brannock and Karl Brandes of Tampa's Holland & Knight, said the city couldn't use its sovereign immunity shield to protect itself from a greater liability because Treasure Island originally told the court that it was good for the money.
On Thursday, the Florida Supreme Court decided in favor of Provident.
In Brannock's words, the court told the city, "If you are going to use power (over property owners' rights), you're going to have to be responsible, you're going to have to use that power wisely. The court said, "You're like any other citizen.' "
Brannock said he does not believe the city has any recourse at this point.
"It's unfortunate it came to this," he said. "We would have settled this for much, much less a long time ago."
The city's attorneys say that's not true.
"I don't think they were ever really interested in settlement," said Douglas Berry, a Tampa lawyer hired by the Florida League of Cities municipal insurance pool. "That opportunity never presented itself."
And, from a practical standpoint, the city had been winning the case. Three rulings from the 2nd District Court of Appeal favored Treasure Island.
In its ruling Thursday, the Supreme Court said, "the reason governmental entities are not required to post a bond before the granting of a temporary injunction is because governmental entities are presumed to be financially responsible." If a bond had been posted, the city would have been liable only for the amount of the bond.
Attorneys for Provident said they were still calculating the final damages last week.
"Basically we want to take this very slow," said Howie. "It's been too long of a battle to start counting our money."