02-004534 John Abbe, Peter Hein, Fred Klein, And Property Management Of Key West, Inc. vs. Department Of Community Affairs Status: Closed Recommended Order on Monday, August 4, 2003.

Summary: Ordinance restricting transient rentals in Key West consistent with the Principles for Guiding Development of the City of Key West Area of Critical State Concern.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOHN ABBE, PETER HEIN, FRED )

KLEIN, AND PROPERTY )

MANAGEMENT OF KEY WEST, I NC ., )

)

Petitioners, )

)

vs. )

)

DEPARTMENT OF COMMUNITY )

AFFAIRS, )

)

Respondent, ) Case No. 02 - 4534

)

and )

)

CITY OF KEY WEST; TRUMAN )

ANNEX RESIDENTS, INC.; AND )

MARTHA DUPONT, )

)

Intervenors. )

______________________________)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in Key

West, Florida, on March 17 - 18, 2003.

APPEARANCES

For Petitioners: Jeffrey M. Bell

Ritter, Chusid, Bivona & Cohen, LLP

7000 West Palmetto Park Road, Suite 400

Boca Raton, Florida 33433

For Respondent: David L. Jordan

Deputy General Counsel

Department of Community Affairs

2555 Shumard Oak Boulevard, Suite 325

Tallahassee, Florida 32399 - 2100

For Intervenor City of Key West:

David J. Audlin, Jr.

415 Eaton Street

Key West, Florida 33040

For Intervenors Truman Annex Residents, Inc .,

and Martha DuPont:

Lee R. Rohe

Post Office Box 420259

Summerland Key, Florida 33042

STATEMENT OF THE ISSUE

The issue is whether Ordinance 02 - 06, as adopted by the

City of Key West and approved by the Department of Community

Affairs, is consistent with the Principles for Guiding

Development for the City of Key West Area of Critical State

Concern, as provided in Rule 28 - 36.003(1), Florida

Administrative Code.

P RELIMINARY STATEMENT

By Petition for Administrative Hearing dated May 3, 2002,

Petitioners challenged the final order issued by Respondent

Department of Community Affairs approving Key West Ordinance

02 - 06. Key West Ordinance 02 - 06, which is identical to Key West

Ordinance 98 - 31, limits transient rentals in Key West.

Petitioners alleged that Key West Ordinance 02 - 06 is

inconsistent with the following provisions of the Principles for

Guiding Development in the Florida Keys Area of Critical State

Concern: Section 380.0552(7)(a), Florida Statutes ("[t]o

strengthen local government capabilities for managing land use

and development . . ."); Section 380.0552(7)(d), Florida

Statutes ("[t]o ensure the maximum well - being of the Florida

Keys and its citizens thro ugh sound economic development");

Section 380.0552(7)(g), Florida Statutes ("[t]o protect the

historical heritage of the Florida Keys"); Section

380.0552(7)(h), Florida Statutes ("[t]o protect the value,

efficiency, cost - effectiveness, and amortized life o f existing

and proposed major public investments . . ."); Section

380.0552(7)(j), Florida Statutes ("[t]o provide adequate

alternatives for the protection of public safety and welfare in

the event of a natural or manmade disaster . . ."); and Section

380.0 552(7)(l), Florida Statutes ("[t]o protect the public

health, safety, and welfare of the citizens of the Florida Keys

and maintain the Florida Keys as a unique Florida resource").

Petitioners alleged that Key West Ordinance 02 - 06 is

inconsistent with the following provisions of the Principles for

Guiding Development in the City of Key West Area of Critical

State Concern: Rule 28 - 36.003(1)(a), Florida Administrative

Code ("[s]trengthen local government capabilities for managing

land use and development"); Rule 28 - 36.003(1)(e), Florida

Administrative Code ("[p]rotect. . . the historical heritage of

Key West and the Key West Historical Preservation District");

Rule 28 - 36.003(1)(f), Florida Administrative Code

("[p]rotect. . . the value, efficiency, cost - effec tiveness and

amortized life of existing and proposed major public investments

. . ."); and Rule 28 - 36.003(1)(h), Florida Administrative Code

("[p]rotect. . . the public health, safety, welfare and economy

of the City of Key West, and . . . maint[ain] Key W est as a

unique Florida resource").

On December 3, 2002, Intervenor City of Key West filed an

Agreed Motion to Intervene to defend the ordinance. On the same

day, Intervenor Truman Annex Residents, Inc., filed a Motion to

Intervene to defend the ordinan ce. On January 8, 2003,

Intervenor Martha DuPont filed a Motion to Intervene to defend

the ordinance. By orders entered December 11, 2002, and

January 28, 2003, the Administrative Law Judge granted these

requests to intervene.

On February 21, 2003, John J. Behmke filed a Petition to

Intervene to challenge Key West Ordinance 02 - 06 based on the

alleged procedural deficiencies in the adoption process, but not

on substantive inconsistency with any of the Principles for

Guiding Development. On February 23, 2 003, Petitioners filed a

motion to amend their petition to raise the same issues sought

to be raised by Mr. Behmke. By order entered March 11, 2003,

the Administrative Law Judge denied this request to intervene

and the motion to amend the petition. As co rrectly stated in

Petitioners' proposed recommended order, the Administrative Law

Judge refused to allow these procedural challenges to Key West

Ordinance 02 - 06 because the relevant statutes, as discussed

below, do not authorize the Administrative Law Judg e to

entertain a challenge to the ordinance on a procedural basis.

On May 12, 2003, Mr. Behmke filed a Petition to Intervene

for Purposes of Appeal. On May 15, 2003, Intervenor City of Key

West filed its Opposition to John Behmke's Petition to Intervene

for Purposes of Appeal. On May 20, 2003, Mr. Behmke filed a

Reply. Just as the Administrative Law Judge will not be

involved in the determination of the proper time to appeal an

order denying a request to intervene, so he should not be

involved in determ ining, for the appellate court, the identity

of the parties to such an appeal. If the appellate court

determines that Mr. Behmke's appearance would be necessary or

helpful for an adjudication of this matter, the court can grant

him the opportunity to inte rvene at the appellate level. This

ruling seems especially appropriate where, as here, Petitioners

have an opportunity to preserve the same issue for appellate

review.

Key West Ordinance 02 - 06 is identical to Key West Ordinance

98 - 31, which was the subje ct of an earlier proceeding at the

Division of Administrative Hearings involving much the same

parties as are present in this case. In the earlier case, DOAH

Case No. 99 - 0666GM, an Administrative Law Judge entered a

recommended order, and Respondent Depar tment of Community

Affairs entered a final order, which was appealed to the Third

District Court of Appeal. Prior to deciding the appeal, the

Third District decided a related case, Coleman v. City of Key

West , 807 So. 2d 84 (Fla. 3d DCA 2001), and found t hat Key West

Ordinance 98 - 31 was invalid due to the manner of its adoption.

Intervenor Key West consequently adopted Key West Ordinance

02 - 06. In the early stages of the present administrative

proceeding, while still retaining jurisdiction of the case,

R espondent Department of Community Affairs entered an Order,

dated November 12, 2002, applying administrative res judicata to

preclude relitigation of the issues that had been litigated in

DOAH Case No. 99 - 0666GM.

However, by order at the start of the he aring, the

Administrative Law Judge vacated the agency's res judicata

order. Otherwise, the application of res judicata would have

precluded all judicial review of the facts covered by the

ruling, as the appellate court never reviewed the earlier case,

wh ich was mooted after the decision in the case challenging Key

West Ordinance 98 - 31 on procedural grounds. The effect of the

Administrative Law Judge's order vacating the agency's res

judicata order was to allow the parties to offer evidence

without limit ation by the application of any notion of res

judicata .

Also at the start of the hearing, the Administrative Law

Judge entered orders opening up the hearing to all relevant

evidence and incorporating all of the evidence admitted in DOAH

Case No. 99 - 0666 GM. The parties had this evidence present at

the hearing. Lastly, at the start of the hearing, the

Administrative Law Judge denied repeated requests of Petitioners

for a continuance.

At the hearing, Petitioners called five witnesses and

offered into evi dence five exhibits: Petitioners Exhibits A - E.

Intervenor City of Key West called one witness and offered into

evidence four exhibits: City Exhibits A - D. Intervenors Truman

Annex Residents, Inc., and Martha DuPont called three witnesses

and offered int o evidence Intervenors Exhibits A - E. Respondent

called no witnesses and offered into evidence two exhibits: DCA

Exhibits A and B. All exhibits were admitted.

The court reporter filed the transcript on April 16, 2003.

The parties filed their proposed r ecommended orders by May 19,

2003. Respondent Department of Community Affairs filed the

exhibits admitted specifically in this case on June 19 and 24,

2003.

FINDINGS OF FACT

1. All Petitioners, except John Abbe, and all Intervenors

are substantially affect ed persons. After the commencement of

this proceeding, Petitioner John Abbe sold his property and

voluntarily dismissed his claim. The parties agreed that, for

mutual convenience, the style of this case would remain

unchanged, but references to "Petition ers" or the "parties"

below do not include John Abbe.

2. At all material times, each Petitioner owned or managed

for rental residential real property in the City of Key West (as

an area, Key West). Each Petitioner rented these properties for

tourists for t erms of less than 30 days or one calendar month.

None of these properties was the primary residence of any

Petitioner who is a natural person.

3. Petitioners have transient occupational licenses issued

by the State of Florida and Monroe County. Petition ers Hein and

Klein do not have occupational licenses from Intervenor City of

Key West (as a municipality, City) for transient rentals, but

five of the 30 properties managed by Petitioner Property

Management of Key West, Inc. are properly licensed with City

transient occupational licenses.

4. Intervenor Martha DuPont (DuPont) owns a residence in

the Truman Annex development in Key West. Members of Intervenor

Truman Annex Residents, Inc., (TAR) also own residences in the

Truman Annex. Properties adjacent to the Truman Annex are

devoted to transient rentals, and DuPont and TAR's members have

been disturbed in the enjoyment of their residences by transient

renters occupying the properties that they have rented.

5. On February 20, 2002, the City adopted Key West

Ordinance 02 - 06. Ordinance 02 - 06 amends Section 5 - 21.2 of the

City land development regulations by amending the definition of

"Transient Living Accommodations" and adds a new regulation

governing transient living accommodations in residential

dwellings.

6. The amendment to the definition of "Transient Living

Accommodations" adds that advertising or holding out a property

as available for rent to transients satisfies the definition,

even if no rental occurs, and that "a short - term rental use of

or within a s ingle family dwelling, a two family dwelling or a

multi - family dwelling . . . shall be deemed a transient living

accommodation."

7. The new land use regulation is Section 2 - 7.21, which is

entitled, "Transient Living Accommodations in Residential

Dwellings -- Regulations." Section 2 - 7.21 accomplishes the

restrictions to which Petitioner object and provides, in part:

A. Intent.

These regulations apply only to the

transient use of residential dwellings. In

1986, the City enacted former zoning code

Section 35. 24(44) which provided the

following definition of a transient living

accommodation: "Commercially operated

housing principally available to short - term

visitors for less than twenty - eight (28)

days." (This definition shall hereinafter

be referred to as th e "Former Transient

Definition.") Some property owners and

developers interpreted the Former Transient

Definition to mean that an owner could rent

his or her residential dwelling for less

than half the year without the dwelling

losing its residential stat us, and therefore

without the need for a City - issued transient

license (so long as State of Florida

licensing requirements were met). This

interpretation went unchallenged by the

City. Three categories of transient use of

residential dwellings resulted: (1) some

owners obtained a residential license

allowing unrestricted transient use; (2)

some owners followed the Former Transient

Definition and, accordingly, rented their

properties less than half the year; and (3)

some owners put their residences to a

t ransient use without City or State license

and without regard to existing regulations.

In addition, many residential dwelling

owners never put their properties to a

transient use and they no longer have the

opportunity to do so under the City's

current Ra te of Growth Ordinance.

The City Commission finds that short - term or

transient rentals affect the character and

stability of a residential neighborhood.

The home and its intrinsic influences are

the foundation of good citizenship; although

short - term ten ants no doubt are good

citizens generally, they do not ordinarily

contribute to activities that strengthen a

community.

Therefore, the City of Key West intends by

these regulations to establish a uniform

definition of transient living

accommodations, and to halt the use of

residences for transient purposes in order

to preserve the residential character of

neighborhoods. The City has provided only a

brief phase - out period in recognition that

in many instances investment expectations

have already been met e ither through rental

income or rising market value.

* * *

8. Key West is a designated area of critical state concern

(ACSC). Therefore, on February 22, 2002, the City submitted

Ordinance 02 - 06 to Respondent, which is legally obligated to

review proposed land development regulations in ACSC.

9. By Final Order issued April 2, 2002, Respondent found

that Ordinance 02 - 06 is consistent with the Principles for

Guiding Development of the City of Key West Area of Critical

State Concern, as set forth in Rule 28 - 36.003(1), Florida

Administrative Code (Principles). (All references to Rules are

to the Florida Administrative Code.) Specifically, Respondent

found that Ordinance 02 - 06 is consistent with all of the

Principles an d "promotes and furthers" Principles a and h.

10. The Principles, which were adopted by the

Administration Commission on February 28, 1984, consist of the

following objectives:

(a) Strengthen local government

capabilities for managing land use and

develop ment.

(b) Protection of tidal mangroves and

associated shoreline and marine resources

and wildlife;

(c) Minimize the adverse impacts of

development of the quality of water in and

around the City of Key West and throughout

the Florida Keys;

(d) Protectio n of scenic resources of the

City of Key West and promotion of the

management of unique, tropical vegetation;

(e) Protection of the historical heritage

of Key West and the Key West Historical

Preservation District;

(f) Protection of the value, efficiency ,

cost - effectiveness and amortized life of

existing and proposed major public

investments,

including:

1. The Florida Keys Aqueduct and water

supply facilities,

2. Sewage collection and disposal

facilities,

3. Solid waste collection and disposal

facilities,

4. Key West Naval Air Station,

5. The maintenance and expansion of

transportation facilities, and

6. Other utilities, as appropriate;

(g) Minimize the adverse impacts of

proposed public investments on the natural

and environmental resources of the City of

Key West; and

(h) Protection of the public health,

safety, welfare and economy of the City of

Key West and the maintenance of Key West as

a unique Florida Resource.

11. Unlike the other Principles, Principle a derives its

importance from the remedial process implicit in the ACSC rules.

Pursuant to Rule 28 - 36.001(3), the necessity of the ACSC

designation is obviated, if the City implements the Principles

through the adoption and enforcement of a compliant

comprehensive plan and land development regulations.

12. The City's comprehensive plan prohibits transient

rentals in the following districts: Coastal Low Density

Residential Development, the Single Family Residential

Development, Medium Density Residential Development, High

Density R esidential Development, Mixed Use Residential/Office,

Limited Commercial Development, Historic High Density

Residential Development, Historic Medium Density Residential

Development, Historic Residential/Office, Conservation,

Military, Public Services, and Historic Residential/Office (as

to residential properties not already licensed for transient use

prior to the effective date of the comprehensive plan).

13. The City's comprehensive plan allows transient rentals

in the following districts: Salt Pond Commercia l Tourist,

General Commercial Development, and Historic Commercial Tourist.

14. The City's comprehensive plan defers the land - use

decision concerning transient rentals to the land development

regulations in the following districts: Mixed Use Planned

Redevelop ment and Development and Historic Planned Redevelopment

and Development (Truman Annex is the only area bearing this

designation).

15. The City's comprehensive plan allows and prohibits

transient rentals in different parts of the following districts:

Historic Residential Commercial Core (allowed in subdistricts 1

and 3, but prohibited in subdistrict 2) and Historic

Neighborhood Commercial (allowed in subdistricts 1 and 3, but

prohibited in subdistrict 2).

16. Ordinance 02 - 06 is consistent with Principle a because

the ordinance implements plan designations that prohibit

transient rentals and executes plan designations that defer the

land - use decision regarding transient rentals to the land

development regulations.

17. Petitioner's contentions to the contrary are

unpersu asive. Provisions of the City's comprehensive plan

stress the importance of tourism, but the City's decision to

restrict transient rentals does not necessarily conflict with

the presentation of Key West as an appealing tourist

destination. The record doe s not suggest that the loss of

rental homes, many located in established residential

neighborhoods, would diminish Key West's tourist appeal.

18. Analysis of Principle a does not require the

resolution of such longstanding disputes between the parties,

such as whether the prohibition of transient rentals

accomplished by Ordinance 02 - 06 maintains and enhances Key

West's charm and tourist appeal, as ordinance proponents

contend, or substantially reduces the inventory of rental

properties for a particular segment of the tourist market, as

ordinance opponents contend. As is more apparent in the

discussion below of Principle h, the relevant inquiry is that of

consistency, which encompasses a broader range of permissible

land use regulations relative to the Principle s -- not promotion,

which, unwisely used by Respondent in its final order,

encompasses a narrower range of permissible land use regulations

relative to the Principles.

19. Ordinance 02 - 06 is consistent with the City's

comprehensive plan's restrictions on trans ient rentals and

identifies those districts for which the plan defers to the

regulations with respect to land use regulation. Therefore, the

passage of Ordinance 02 - 06 clearly demonstrates the City's

emerging capability for managing land use and developme nt.

20. As is relevant to this case, Principle h is to protect

the welfare and economy and maintain Key West's role as a unique

Florida resource. By implication, Petitioners contend that the

Principles require the City not to restrict the availability of

tran sient rentals in Key West. Resisting Petitioners' claims,

Respondent, the City, and Intervenors contend that the

Principles require the City to restrict the availability of

transient rentals in Key West.

21. Principle h illustrates the problem with Responde nt's

finding that Ordinance 02 - 06 "promotes and furthers" a

Principle, when only consistency is required. The concept of

consistency contemplates a range of permissible planning

solutions, some of which may even be contradictory. The concept

of promotion is less amenable to contradictory planning

solutions, such as, in this case, the restriction or extension

of transient rentals.

22. The protection of the public welfare or economy and

maintenance of Key West as a unique Florida resource are

concepts that will accommodate a considerably wider range of

planning decisions than will the protection of mangroves and

water quality. On this record, the City could, consistent with

these salutary exhortations imbedded in Principle h, restrict or

extend transient rental s. Respondent's finding that Ordinance

02 - 06 promotes Principle h is an unfortunate departure from the

statutory standard of consistency because the erroneous

corollary of this finding is that Principle h impliedly

discourages, if not prohibits, a later o rdinance extending the

availability of transient rentals.

23. Principles requiring the protection of natural and

historic resources and governing infrastructure are sufficiently

demanding, and the range of responsive planning solutions

sufficiently narrow, tha t a specific planning strategy may be

mandated or prohibited, even though the standard is only

consistency. However, the treatment of transient rentals does

not impact these Principles in any meaningful way, so the range

of planning solutions available to the City is not significantly

restricted.

24. In preempting the rights and responsibilities

traditionally accorded local governments in Florida, the

Administration Commission explicitly limited itself to matters

involving natural and historic resources and infrastructure.

Rule 28 - 36.004(1) states: "The [Principles] are oriented

towards [sic] protection of natural and historic resources and

public investments of regional and State importance."

25. Obviously, Rule 28 - 36.004(1) omits any mention of the

subjects o f Principles a and h, which are the two Principles

that Respondent found were promoted by Ordinance 02 - 06. Among

all the Principles, these two have the broadest application,

because they are not limited to natural and historic resources

and infrastructure , but impose the least restrictions upon the

City, because they are not limited to natural and historic

resources and infrastructure.

26. Respondent cites these two Principles in defense of

Ordinance 02 - 06, not because Respondent has a weak case, but

because a transient rental ordinance has little, if anything, to

do with the Principles and their purposes. However annoying the

presence of transient rentals may be to some residents or costly

the absence of transient rentals may be to some landowners and

rental agents, the status of transient rentals immediately prior

to this ordinance or immediately after it has no significant

impact upon Key West's status as an ACSC.

27. The record does not support a claim that the presence

or absence of transient rentals forms a distinctive historical

feature in Key West, has any bearing on the natural resources of

Key West, or ultimately involves the public welfare or economy

of Key West in any measurable way. Thus, Ordinance 02 - 06 is

consistent with Principle h, just as would be an ordinance

repealing Ordinance 02 - 06 and restoring transient rentals to

their status just prior to the adoption of Ordinance 02 - 06.

28. For similar reasons, Ordinance 02 - 06 is consistent

with the remaining Principles.

CONCLUSIONS OF LAW

29. The Division of Administrative Hearings has

jurisdiction over the subject matter. Section 120.57(1),

Florida Statutes. (All references to Sections are to Florida

Statutes.)

30. Pursuant to Section 120.57(1), the parties have proved

that their "substantial interests" are det ermined by the agency

action in this case concerning Ordinance 02 - 06. Thus, all

parties have standing.

31. Section 380.05(6) provides that Respondent has the

burden of proving that the subject land development regulations

are "consistent" with the Principles.

32. To the very limited extent that Ordinance 02 - 06 has a

material bearing on any of the Principles, it is consistent with

these Principles.

RECOMMENDATION

It is

RECOMMENDED that the Department of Community Affairs enter

a final order finding Ordinance 02 - 06 consistent with the

Principles for Guiding Development in the City of Key West, as

set forth in Rule 28 - 36.003(1), Florida Administrative Code.

DONE AND ENTERED this 4th day of August, 2003, in

Tallahassee, Leon County, Florida.

S

___________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 4th day of August, 2003.

COPIES FURNISHED :

David J. Audlin, Jr.

415 Eaton Street

Key West, Florida 33040

Jeffrey M. Bell

Ritter, Chusid, Bivona and Cohen, LLP

7000 West Palmetto Park Road, Suite 400

Boca Raton, Florida 33433

Timothy E. Dennis

Department of Community Affairs

2555 Shumard Oak Boulevard

Tallahassee, Flo rida 32399 - 2100

Lee R. Rohe

Post Office Box 420259

Summerland Key, Florida 33042

Colleen M. Castillo, Secretary

Department of Community Affairs

2555 Shumard Oak Boulevard, Suite 100

Tallahassee, Florida 32399 - 2100

David L. Jordan, Deputy General Coun sel

Department of Community Affairs

2555 Shumard Oak Boulevard, Suite 325

Tallahassee, Florida 32399 - 2100