Hotel Developers to Get Settlement With City

The Fernandina Beach City Commission will vote Tuesday to approve a $445,000 settlement to the developers of the Courtyard by Marriott and Springhill Suites, who sued the city claiming the city collected "unreasonable" fees on the project.

According to the city commission agenda, Main Beach Sojourn and Compass Group will be refunded the money plus interest from the hotel project at 2700 Atlantic Avenue.

The developers filed a lawsuit in December 2022, claiming the city's Building Department had levied fees that were “unreasonable.” The lawsuit also claimed that money collected from the project intended as fire marshal fees did not go to the correct city account, but instead was deposited into the city’s General Fund.

According to the city summary of the settlement, "Finally, the City Commission wishes to settle the lawsuit styled Main Beach Sojourn, LLLP et al. v. City of Fernandina Beach, Case No.: 2022-CA-414 in the Fourth Judicial Circuit Court in and for Nassau County to avoid further litigation costs, and refund building permit fees in the amount of $444,780.82 which includes simple interest at the fixed rate of 5% from May 11, 2021 (date of issuance of Certificate of Occupancy) through December 1, 2023."

The summary states, "Staff also recommends transferring a total of $445,000.00 from the Building Fund Reserve account, to the Building Fund account, to refund disputed building permit fees. This refund of building permit fees is not to be paid from the General Fund taxpayer dollars."

The city will also refund $69,000 it overcharged in non-utility impact fees paid by Compass Group, Inc. because the hotel, once completed, included less square footage than the original building plans had indicated.

In its filing of the lawsuit against the city, the developers said the city of Fernandina Beach collection of impact fees totaling $450,889, were “not roughly proportionate to impacts” of the project. “The city did not conduct sufficient analysis to establish that the fees were roughly proportionate to the impact of new construction to municipal facilities …”