City-Port Fuss Takes Another Step Toward Resolution

By Mike Lednovich

The City of Fernandina Beach is done haggling with the Ocean Highway and Port Authority (OHPA) regarding $250,000 it claims is owed in payment in lieu of taxes (PILOT) collections.

City Attorney Tammi Bach said the city’s outside legal firm of Bryant Miller Olive has filed a motion of summary judgment in the 4th Judicial Circuit of Nassau County asking Judge Marianne Lloyd Aho to rule in favor of the city’s claim that OHPA should be forced to pay the $250,000.

In Florida, a motion for summary judgment in circuit court is a legal procedure in which the city is asking the court to rule on its case without going to trial because there are no genuine disputes of material fact, and the city is entitled to the judgment as a matter of law.

The filing is the latest effort by the city to collect $50,000 in yearly OHPA payments the port pays in exchange for city services such as police and fire department coverage. The two parties have been arguing over the payments for nearly five years. Attempts at mediation failed early on and negotiations for a settlement have collapsed.

In its motion for summary judgment, the city cited evidence such as a 1986 preliminary development agreement that the city provided, including OHPA making annual payments to the city in lieu of taxes. But the port balked at agreement and didn’t make payments.

The city’s motion cites a second agreement with OHPA in 1993 stating:

“The contract at issue in this case between the parties resulted from OHPA’s letter to the city dated Oct. 5, 1993, accepting terms offered by the city in the city’s proposal dated Sept. 3, 1993. The agreement provided (among other things) that, beginning on July 1, 1994, OHPA would make annual (PILOT) payments to the city based on the previous year’s tonnage but such annual payment will not be less than $50,000 per year.”

OHPA has an opportunity to respond to the city’s filing, possibly presenting OHPA’s own evidence and arguments to demonstrate that there are genuine issues of material fact in dispute that should be decided at a trial.

But the city maintains in the filing that there are no material facts that OHPA can dispute.

Once all responses are filed, Judge Aho will review the motion, the city’s supporting evidence, and the responses from OHPA before deciding whether to grant or deny the motion for summary judgment. If the motion is granted, the case may be resolved without the need for a trial. If the motion is denied, the case will proceed to trial.

Despite OHPA failing to provide the annual PILOT funds, the city has continued to provide the Port of Fernandina “services without interruption, including providing roads, road maintenance, signage and emergency services such as fire and police protection,” the motion states.

The motion states that in 2019, “OHPA for the first time asserted to the city that the agreement is invalid and unenforceable, or, alternatively, it was limited to a 30-year term and has expired.”

OHPA finds itself in a financial quandary. The district has incurred crushing legal fees of well over $150,000 in defending itself in the PILOT case, as well as a case in which the Nassau County Property Appraiser is seeking property taxes from the port operator.

Also, while OHPA has $100,000 dedicated to the PILOT assessments in an escrow account, the port would have to find the other $150,000 should the city prevail. There are no funds in the OHPA budget to cover that shortfall and the port might have to rely on revenue from the sale of port property adjacent to the port complex.

The next step is for OHPA to file a response to the motion for summary judgment.

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9 days ago

Maybe we need new lawyers?!

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