City sues Ocean Hwy & Port Authority

A Fernandina Observer Report
October 29, 2020

Alleges Breach of Contract Seeks Enforcement of “Payments in Lieu of Taxes”

The dispute between the City and the Ocean Highway and Port Authority (OHPA) over an alleged commitment to pay the City $50,000 per year ratcheted up with the City filing suit in Circuit Court on October 27, 2020.

The City contends, that as a result of Resolutions it adopted in 1986 and 1989, and related agreements, that the OHPA was obligated to pay an annual fee of $50,000 beginning July 1, 1989, as a payment in lieu of taxes (PILOT). The obligation, maintains the City, was integral to the development of port facilities located on property within the City.

The City alleges the PILOT obligation has no expiration date, or any term or limitation. The OHPA made annual payments every year from 1993 through and including 2018.

The City cites the following provision of its 1989 Resolution in support of the claim that the OHPA has a continuing obligation to make PILOT payments:

“In the absence of ad valorem taxes being due and payable by the [OHPA] shall pay to the City an annual fee of $50,000, due and payable on July 1, of each year, beginning July 1, 1989. Such payment shall be used, $25,000 toward a capital acquisition or development for downtown parking and $25,000 for development of a community civic center, for each of the first five years. Said annual amount shall be renegotiated every year, but shall never be less than $50,000 per year.”

Before July 1, 2019, the OHPA asserted that the PILOT understanding is invalid and unenforceable pursuant to Florida statute and/or was limited to a thirty (30) year term and has expired. The OHPA has made no subsequent payment to the City.

Mediation efforts to resolve the dispute were unsuccessful.

It is expected the OHPA will answer the City’s Complaint within twenty (20) days after it has been served on the Authority.

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