10-009137DRI Ginn-La Marina, Lllp, Ltd, Northshore Hammock Ltd, Lllp, And Northshore Ocean Hammock Investment, Ltd, Lllp vs. Flagler County Status: Closed Recommended Order on Wednesday, April 6, 2011.

Summary: NOPC partially denied because revisions not consistent with comprehensive plan and LDRs and applicants had no vested right to develop land dedicated to golf course usage.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GIN N - LA MARINA, LLLP, LTD, )

NORTHSHORE HAMMOCK LTD, LLLP, )

AND NORTHSHORE OCEAN HAMMOCK )

INVESTMENT, LTD, LLLP, )

)

Petitioner s, )

)

vs. ) Case No . 10 - 9137DRI

)

FLAGLER COUNTY, )

)

Respondent , )

)

and )

)

OCEAN HAMMOCK PROPERTY OWNERS )

ASSOCIATION, INC., THE HAMMOCK )

BEACH CLUB CONDOMINIUM )

ASSOCIATION, INC., MICHAEL M. )

HEWSON, AND ADMIRAL )

CORPORATION, )

)

Intervenors. )

______________________________ )

RECOMMENDED ORDER

Pursuant to notice, this matter was heard before the

Division of Administrative Hearings (DOAH) by its assigned

Administrative L aw Judge, D. R. Alexander , on December 15 - 17,

20 10, in Bunnell, Florida.

APPEARANCES

For Petitioner s: Scott A. Glass , Esquire

James F. Johnston, Esquire

Shutts & Bowen, LLP

300 South Orange Avenue

Suite 1000

Orlando , Florida 32801 - 3373

For Respondent : Wayne E. Flowers, Esquire

Lewis, Longman & Walker, P.A.

245 Riverside Avenue, Suite 150

Jacksonville, Florida 32202 - 4924

Isabelle C. Lopez, Esquire

Quintairos, Prieto, Wood & Boyer, P.A.

One Independent Drive, Suite 1650

Jacksonville, Florida 32202 - 5019

Albert J. Hadeed, Esquire

Flagler County Attorney

1769 East Moody Boulevard

Suite 303

Bunnell, Florid a 32110 - 5992

For Intervenor s: Michael D. Chiumento, III, Esquire

( Ocean Hammock, Chiumento & Guntharp, P.A.

et al.) 145 City Place, Suite 301

P alm Coast, Florida 32164 - 2481

For Intervenor: Ellen Avery - Smith, Esquire

(Adm iral) Rogers Towers, P.A.

100 Whetstone Place

St. Augustine, Florida 3208 6 - 5775

STATEMENT OF THE ISSUE S

The issue s are : (1) what are the correct procedures and

substan tive criteria to be applied in reviewing Petitioners'

proposed "local" changes to the Hammock Dunes Development of

Regional Impact (DRI) Development Order (DO); (2) does

Petitioners' application satisfy the applicable criteria for

approval; and (3) do Peti tioners or Respondent, Flagler County

(County), have the legal ability or obligation through the

Notice of Proposed Change (NOPC) to the DO to change certain

obligations of Intervenor, Admiral Corporation (Admiral),

contained in the DO and in separate agre ements related to the

performance of certain DO obligations.

PRELIMINARY STATEMENT

Petitioners submitted a NOPC application to the County in

2009 , later twice revised , seeking to amend the ir DO by

extending for three years the DRI build - out date authorized by

s ection 380.06(19), Florida Statutes ; reducing the number of

approved dwelling units in the DRI; creating a new residential

Cluster 35 within the DRI boundaries and reallocat ing

previously - approved, but un - built, dwelling units from other

Clusters to n ew Cluster 35 ; agreeing to a further PUD - like

review process before development permits are issued; and

realigning a roadway at its own expense. The amended NOPC was

considered by the County at a hearing on April 5, 2010. On

April 23, 2010, the County is sued its written decision,

Resolution No. 2010 - 22. That decision determined that the

requested changes did not constitute a substantial deviation of

the DO; determined that the revisions were consistent with the

County's Comprehensive Plan (Plan); recogni zed the legislative

extension of time that extended the expiration date of the DO to

February 28, 2012; approved the request to reduce the total

number of approved residential dwelling units from 4,400 to

3,800; but denied the request to create a new Clust er 35 with a

transfer of 541 residential units to that Cluster on the ground

this was inconsistent with certain provisions in its Land

Development Code (LDC) .

On May 26, 2010, Petitioners timely filed a Notice of

Appeal and Petition for Appeal with the Flo rida Land and Water

Adjudicatory Commission (Commission). The matter was referred

by the Commission to DOAH on September 21, 2010, with a request

that an administrative law judge conduct a formal hearing. By

Order dated October 1, 2010, Admiral, Ocean Ha mmock Property

Owners Association, Inc. (Ocean Hammock), The Hammock Beach Club

Condominium Association, Inc. ( Hammock Beach), and Michael M.

Hewson (Hewson) were authorized to intervene as parties .

By agreement of the parties, a final hearing was schedu led

on December 15 - 17, 2010, in Bunnell, Florida. A p re - h earing

s tipulation (stipulation) was filed by the parties on

December 10, 2010. At the outset of the hearing, the County's

Motion to Dismiss Petition for Appeal, Intervenors' Request for

Judicia l Notice, and Intervenors' Motion for Leave to Call

Additional Witnesses were withdrawn. Petitioners presented the

testimony of Daniel Baker, a professional engineer and Regional

Vice - President of Reynolds Development & Management Group and

accepted as an expert; Adam Mengel, County Planning and Zoning

Director and accepted as an expert; and Kenneth B. Metcalf, a

certified land use planner with Greenb e rg Traurig, P.A., and

accepted as an expert. Also, they offered Petitioners ' Exhibits

1 - 1 5, 17, and 18 , w hich were received in evidence. The County

presented the testimony of David J. Tillis, Senior Project

Manager of Planning at WilsonMiller Stantec and accepted as an

expert; James E . Gardner, Jr., County Appraiser and accepted as

an expert ; and Anne Wilson , a realtor and scenic highway planner

and accepted as an expert. Also, it offered County (Respondent)

Exhibits 1 - 3, 4A and B, and 5 - 16 , which were received in

evidence. Intervenors Ocean Hammock, Hammock Beach, and Hewson

presented the testimony of Hews on , a resident of Ocean Hammock;

Robert DeVore , the original developer of the DRI; Linda Loomis

Shelley, an attorney with Fowler White, P.A., and accepted as an

expert; and Steven R. Davis, an architect and accepted as an

expert. Also, they offered Interv enors ' Exhibits 1 - 1 0, 12, and

1 3, which were received in evidence. Admiral presented no

witnesses but offered Admiral Exhibits 1 - 5, 6A - D, 7 , and 11,

which were received in evidence. 1 Finally, t he parties offered

Joint Exhibits 1 - 12, which were received i n evidence.

The Transcript of the hearing ( five volumes) was filed on

January 19 , 201 1 . At the request of the County , Ocean Hammock,

Beach Club, and Hewson , the time for filing p roposed f indings of

f act and c onclusions of l aw w as extended to March 7, 2 0 11 .

Also, the parties were authorized to file submissions that did

not exceed 50 pages . Separate filings were timely made by

Petitioners, the County, Admiral, and the other Intervenors . On

March 8, 2011, the County filed a Motion for Leave to File

Amend ed Proposed Recommended Order on the ground its original

filing (totaling 49 pages) inadvertently omitted portions of the

conclusions of law . While the Motion was initially agreed to by

Petitioners on the assumption the amended filing would not

exceed 50 pages, the new filing on March 8, 2011, totaled 57

pages, which exceeded the established page limitation. This

triggered an objection by Petitioners. The objection is

overruled.

FINDINGS OF FACT

A. The Parties

1. Petitioners are the current owners and developers of

certain real property within the Hammock Dunes DRI in the

County. They are some of many developers of real property

within that DRI.

2. The County is a political subdivision of the State and

the unit of local government responsible for is suing DOs for

projects that are required to undergo DRI review within its

geographic limits, including amendments to DOs of previously

approved DRIs. Such reviews must be in conformity with the

requirements of section 380.06.

3. Admiral is the original d eveloper of the DRI but no

longer owns any property or entitlements in the DRI. Its

interest in the proceeding is based on long - standing obligations

to provide certain infrastructure, d escribed below, that run

with the land until the expiration of the DRI , and whether the

County can extend those obligations without its consent by

extending the expiration date of the DRI.

4. Ocean Hammock is an incorporated property owners

association comprised of approximately 1,500 unit owners within

the DRI.

5. Ham mock Beach is an incorporated condominium

association comp osed of approximately 184 condominium unit

owners within the DRI.

6. Hewson is an individual and an owner and resident of

property within the DRI.

B . History Preceding the Application

7 . On Ma rch 30, 1984, t he County approved the original

Hammock Dunes DRI by County Resolution 84 - 7 . Th e resolution

showed Admiral as the developer . Admiral is a wholly - owned

subsidiary of ITT Community Development Corporation (ITTCDC).

The DO covered 2,258 acre s and entitled Admiral to construct a

maximum of 6,670 dwelling units and related commercial,

institutional, recreational, and other uses in 42 separate

geographical areas known as "Clusters" covering 893 acres. The

property is adjacent to the Atlantic Oc ean , with approximately

five miles of pristine beach bordering the DRI . Beginning in

1985 or 1986, development of the DRI began and now includes

three subdivisions or phases: Hammock Dunes; Ocean Hammock; and

Hammock Beach. Currently, 33 percent of all single - family homes

authorized for construction in the DRI have actually been

constructed; all platted and permitted condominiums have been

constructed; and all Clusters have been platted. Due to

financial considerations of the ir owners, one or two Cluste rs in

the DRI have no vertical development.

8 . The general and special conditions of development are

contained in a 54 - page document identified as Attachment A to

the DO. See Joint Ex. 1, Attachment A, pp. A - 1 through A - 54.

The original DO included a DR I Master Development Plan,

identified as Exhibits 17.5.1 and 17.5.2 in Attachment A . The

M aster D evelopment P lan is basically a sketch plan that

geographically depicts the uses authorized by the DO. The first

exhibit depict s generally where the 42 reside ntial Clusters and

other uses were to be located. See Attachment A, p. A - 45. The

second exhibit is a Residential Cluster Data Table, which

describe s the type of development for each Cluster and

designated the maximum number of dwelling units that may be

built within each Cluster. See Attachment A, p. A - 46.

9 . The DO rezoned all of the property within the DRI as

Planned Unit Development (PUD) , which is a zoning district in

the County zoning code. Also, section 17.5 of the DO described

the substantive conditions for development relating to density,

residential clusters, allowable building height, building

spacing, and flexibility considerations. Subsect ion 17.5. g.

provide s in part that "any changes [to the project] must first

be approved through the si te development plan review procedures

of Section 17.6."

10 . Section 17.6 prescribe s the PUD review procedures that

apply to submitted development proposals. See Joint Ex. 1, pp.

63 - 68. The i ntroductory language in s ection 17.6 state s that

"[t]his proje ct shall be subject only to the following [PUD]

review provisions which are an elaboration of the review

provisions of Article X." Joint Ex. 1, Attachment A, p. A - 47.

During the PUD review process, s ection 17.6 generally require s a

pre - application confer ence by the applicant and County staff,

the submission of a detailed site development plan which

addresses specific issues set out in subsection 17.6(c), and

approval (platting) of th e site development plan leading to

permitting. Id. Section 17.6 has not been changed or modified

since the original DO was approved.

11 . The DO also required Admiral to construct certain

specific items of infrastructure associated with the DRI. Among

the requirements were that Admiral construct two additional

lanes on the Intracoastal Waterway bridge, to occur when the

Florida Department of Transportation and County determined that

a Level of Service C was met on the existing two lanes; and that

Admiral four - lane the roads and bridges located on Palm Harbor

Parkway between Clubhouse Drive and Florida Park Drive, to occur

when traffic counts on these road segments exceeded 10,000

average daily trips. See Attachment A, § § 4.1.b and 4.7.

Neither of these prerequisites to construction of these

infrastructure items ha s yet occ urred.

12 . Because DRIs generally take a substantial period of

time to complete, the development plans are subject to periodic

amendment in order to adjust to changing market conditions,

financial conditions, and other variables. Since its approval

in 1984, the DO has been amended f ive times.

13 . The first amendment to the original DO , completed in

July 1995, revised the Master Development Plan in the following

respects: (a) residential acreage was reduced from 893 acres to

888 acres; (b) the maximu m number of dwelling units was reduced

from 6,670 to 4,400; (c) Cluster 1 was split into Clusters 1 and

1(a), resulting in an increas e in the number of Clusters from 42

to 43; and (d) the maximum allowable building height in the

Medium High density categor y was reduced from 20 stories to 12

stories. See Joint Ex . 2. Also, it realigned the spine road,

clarified infrastructure construction obligations, and changed

the geographic location, configuration, and area of Residential

Clusters and other uses, inclu ding the golf course, within the

boundaries of the DRI. Finally, E xhibits 17.5.1 and 17.5.2 were

replaced by E xhibits 3A and 3B to the DO , and the amendment

required the County to approve any successor developer to

Admiral unless ITTCDC guaranteed all app licable DRI

requirements, obligations, and conditions.

14 . The second amendment to the original DO was completed

in March 1998 and generally revised the Master Development Plan

as follows: (a) the number of residential Clusters was reduced

from 43 to 35 (numbered as 1, 1(a), and 2 through 34) together

with changes to location, configuration, and other uses of the

residential Clusters ; and (b) total authorized residential

acreage was increased from 888 acres to 916 acres. See Joint

Ex . 3. Unless or until the pending NOPC is approved, the 1998

Master Development Plan still applies to the DRI. In addition,

the 1998 amendment provided for the conveyance of 33 acres of

beachfront land at the intersection of 16th Road and the beach,

previously intended to be a County park, from the County to the

developer to enable the developer to construct part of a Jack

Nicklaus signature golf course. The golf course was intended to

be a buffer between development in the DRI and the beach. The

developer was still required to construct a smaller public park

on land retained by the County at the 16th Road access to the

beach. Finally, although no revisions to section 17.6 were

made, the amendment added a new section 17.10, which provided

some specific PUD development criter ia for Cluster 34.

15 . On November 24, 1999, ITT Corporation ( then known as

ITT Industries, Inc. ) , the parent corporation of ITTCDC , entered

into a Guaranty Agreement (Agreement) with the County regarding

Admiral's obligations to provide additional infr astructure if

certain transportation thresholds were exceeded. See Admiral

Ex . 1. The Agreement provided in part:

The obligations of th e Guarantor under this

Guarantee Agreement shall be independent,

absolute and unconditional and shall remain

in full fo rce and effect until the earlier

of (i) such time as the Major Obligations

have been performed and discharged . . ., or

(ii) such time as the Development Order,

including all past and/or future amendments

and extensions thereof, shall no longer be

in effec t.

1 6 . The County did not execute the Agreement . However ,

ITT and ITTCDC unilaterally agreed to increase the existing bond

guaranteeing Admiral's DO obligations from $3 million to $10

million in exchange for the County releasing its right to review

and approve any successor developer as provided in the 1995 DO

amendment. This Agreement further provided that the obligations

of the guarantor would remain in effect until the obligations

described therein were performed in compliance with the DO, or

until t he DO and/or any amendments or extensions thereof were no

longer in effect. Id.

1 7 . On December 17, 2001, the DO was again amended. See

Joint Ex . 4. However, that amendment was repealed by the County

on October 7, 2002. See Joint Ex . 5. Besides rep ealing the

2001 amendment, t he 2002 ordinance modified certain requirements

relat ing to public safety and park construction. Neither the

2001 n or 2002 amendments changed the proposed number or location

of dwelling units within the DRI.

18. In 2003, the DO was amended a f ifth time to extend

the build - out date by five years and eleven months, or from

March 28, 2003, to February 28, 2009. See Joint Ex . 6. This

amendment did not affect the permitted number of dwelling units,

residential acreage, or resid ential Clusters, nor were any

revisions made to section 17.5 or 17.6 of the DO regarding the

PUD designation and review procedures. Accordingly, sections

17.5 and 17.6, and Revised Exhibits 3A and 3B, as adopted by the

1998 amendments, remained in effect when Petitioners filed the

NOPC that is the subject of this proceeding.

1 9 . Petitioners' predecessor developer was Lowe Ocean

Hammock, Ltd . (Lowe) . On December 20, 1996, Lowe executed a

Development Order Allocation Agreement with ITTCDC, wherein

those pa rties agreed that no applications would be filed to

amend the DO without the written consent of the other party.

See Admiral Ex . 5 , p. 9 . As one of Lowe's successor developers

in the DRI, Petitioners became subject to this consent

requirement through its inclusion in the deed by which

Petitioners obtained ownership of their interest in the DRI.

See Admiral Ex . 6 A . Admiral contends that the responsibility

for constructing the two additional lanes on Palm Harbor Parkway

still remains with ITTCDC, but that the responsibility for

constructing the two additional lanes on the Intracoastal

Waterway Bridge was assumed by the Dunes Community Development

District (DCDD) , a community development district created in

1985 in the DRI . Neither Petitioners nor the Coun ty is a part y

to the agreements by which ITTCDC or DCDD assumed responsibility

for construction of these two infrastructure projects.

20 . Petitioners did not obtain Admiral or ITTCDC's written

consent before filing the instant NOPC application. Admiral ,

ITTCDC, and ITT wrote two letters in 2009 and one in 2010

stating their objections to the NOPC and maintaining that such

objections would only be withdrawn if their obligations under

the Agreement and the associated bond were either terminated by

the Cou nty or assumed by a successor developer. The letters

indicated that their obligations expired on February 28, 2009,

or the then - current DRI expiration date. The County considered

the letters of objection but determined that the extension of

the build - out date of the DRI was the result of an act of the

Florida Legislature and therefore out of the County's legal

control. Thus, the County determined that it w ould not consider

those issues in connection with the NOPC application.

2 1 . Sometime after it adopt ed the original DO , the County

amended Article III of its LDC by ad ding and/or amending

section s 3.04.00 through 3.04.04 , which set forth the processes

and substantive criteria for the creation of new PUDs. However,

the 1984 DO was never amended to incorp orate the new section s of

the LDC by reference or to change the DO's PUD provisions to

mirror those of the current LDC.

C . Petitioners' NOPC Application

2 2 . Pursuant to section 380.06(19), on February 27, 2009,

Petitioners filed a sixth amendment to th e DRI DO. T he first

iteration of the current NOPC request ed : (a) recognition of the

three - year build - out date extension authorized by the

Legislature in section 380.06(19)(c); (b) creation of a new

residential Cluster 35 consisting of 34 acres and assign ed a

Medium - High density and designated "Ocean Recreation Hotel" ; and

(c) reallocation of 1,147 approved but un - built dwelling units

from Clusters 21 - 34 into the new Cluster. Cluster 35 would be

located on land designated by the DO as the beach club , port ions

of Cluster 33 , and a part of the Ocean Hammock G olf C ourse. Of

the 34 acres, eight would be located north of 16th Road on land

currently occupied by a 77 - foot high building, commonly known as

the "Lodge," which contains a restaurant, 20 hotel rooms,

offices, a golf pro shop, locker facilities, a swimming pool,

spa facility, parking lot, and landscaping. The remaining 26

acres, south of 16th Road, currently feature a golf driving

range, landscaped areas, buffer, and open space. Sixteenth Road

is a pu blic road that provides access to the beach, public beach

parking, and public restroom facilities. Petitioners initiated

the NOPC because they had dwelling unit entitlements that could

not be used in the Clusters from which the units would be

transferred because the land in the donor Clusters had been

fully platted, developed , and/or sold. As a consequence, no

more dwelling units could be constructed in the donor Clusters.

2 3 . On June 19, 2009, Petitioners submitted the second

iteration of the current NO PC application. In th at iteration,

the size of the proposed new Cluster 35 was reduced from 34 to

24 acres; the number of units to be reallocated to Cluster 35

was reduced from 1,147 to 561 units (including 20 from the

hotel) ; and the total number of dwel ling units in the entire DRI

was proposed to be reduced by 600, from 4,400 to 3,800.

2 4 . After reviewing the amended NOPC, the County staff

recommended approval, with conditions to assure consistency with

the Plan and compatibility with existing develop ment. However,

after Admiral submitted letters of objection, and considerable

public opposition to the proposal surfaced, o n February 11,

2010, a third iteration of the NOPC was submitted to the County.

This iteration proposed the following amendments to the DO:

(a) r ecogni zing the automatic extension of the build - out date

for the DRI authorized by the Legislature in section

380.06(19)(c); (b) amending section 17.5.a. by reducing the

total number of authorized dwelling units within the DRI from

4,400 un its to 3,800 units; (c) modifying Exhibits 3A and 3B to

create a new Cluste r 35 encompassing only 12 acres (rather than

24 acres), and designating the new Cluster as Ocean Recreation

Hotel with a maximum building height of 77 feet , and a

reallocation of 54 1 un - built dwelling units from Clusters 21 - 24,

26, 27, and 29 - 34; ( d ) modifying condition 4.4 to allow the

relocation, if necessary, of 16th Road f a rther south to enlarge

the construction area for the new units, with the realignment

occurring only after Pe titioners applied for building permits

for construction within Cluster 35 ; and (e) agreeing to a public

hearing during the site development stage of the process.

2 5 . The final version of the NOPC was reviewed by the

Northeast Florida Regional Planning Cou ncil and Department of

Community Affairs. Both agencies agreed that the proposal did

not constitute a substantial deviation. The County staff agreed

with this determination and recommended that the NOPC be

approved subject to certain conditions, includin g one that

before a development permit be issued for Cluster 35, the

applicants submit maps, exhibits, and other supporting materials

to show compliance with the LDC. Finally, the staff recommended

that the designated residential acreage in the DRI be inc reased

from 916 acres to 960 acres to accommodate the new Cluster and

to reflect the actual residential acreage (948 acres) that had

previously been approved and developed .

2 6 . On April 5, 2010, the Board of County Commissioners

(Board) held a public hear ing to consider the NOPC. The Board

found the requested changes did not constitute a substantial

deviation and approved that part of the NOPC. It also approved

the reduction in the number of approved dwelling units from

4,400 to 3,800. The Board further found the revisions to be

consistent with the County Plan. However, it denied the

application to the extent that it would have created a new

Cluster 35 and reallocated 541 residential units to that

Cluster. Finally, the Board acknowledged that the Flori da

Legislature had extended the DRI expiration date and concluded

that no formal action was necessary in that regard.

2 7 . The Board's decision was memorialized in Resolution

No. 2010 - 22 , which states in pertinent part that the request to

create a new Clus ter 35 and transfer 541 units from other

Clusters was being denied for two reasons: that it would

adversely affect the orderly development of the County in

contravention of LDC section 3.04.02.F.1.; and that it would

adversely affect the health and safety of residents and workers

in the area and would be detrimental to the use of adjacent

properties and the general neighborhood in contravention of LDC

section 3.04.02.F.2. See Joint Ex. 10. No specific findings of

fact were made as to how Cluster 35 was i nconsistent with these

provisions. This appeal followed. Because this proceeding is

de novo in nature, the County and Intervenors have raised

additional grounds for denying the application . These grounds

were also raised at the local hearing but were no t addressed in

Resolution 2010 - 22.

D. The P rocedures for Reviewing the NOPC

2 8 . Petitioners contend that the Board's review of a NOPC

involves only two steps: (a) a determination as to whether the

revisions constitute a substantial deviation requiring further

review and analysis; and (b) a determination as to whether the

revisions are consistent with the local comprehensive plan. If

the revisions do not require a substantial deviation analysis,

and they are consistent and compatible with the local pla n, the

NOPC would be approved, and any future development would then be

controlled by the PUD review process contained in the DO. They

also assert that it is inappropriate to have a PUD review

concurrent with the NOPC review, as the Board did here ; instea d,

they argue that the PUD review process should occur at the site

development plan stage .

29. The process described by Petitioners would normally

apply were this not a unique NOPC requesting substantial

revisions to the DO (but not regional impact implic ations) in

the sense that it request s creation of a new Cluster where no

residential development had been previously permitted, and the

proposed residential development w ill occur in an area

specifically prohibited for development by the DO. R equests to

r edistribut e uses on property subject to PUD zoning, or to amend

the sketch plan for an approved PUD zoning , are normally treated

by the County as a rezoning of the PUD , even if, as here, the

property has previously been assigned PUD zoning . The LDC

labels this process as a "reclassification" of the property ,

which triggers the consideration of other LDC criteria. See

§ 3.04.02, LDC. When this occurs, a change to the PUD must go

through the same type of process that the original adoption of

the PUD wen t through, which is a rezoning process. Th is

pro cedure contemplates that a simultaneous NOPC/PUD review takes

place, and the County is authorized to take into account the

general issues of public health, safety, and welfare described

in sections 3.04.02.F .1. and 2. , as well as any other sections

in the article that may apply. The evidence shows that this

procedure is used by many local governments throughout the

State, including the County, and was specifically used by the

County in 1998 when the last sub stantial changes to the Master

Development Plan w ere requested by predecessor developers.

While conflicting testimony was submitted on this issue, t he

more persuasive evidence supports a finding that these

procedures and substantive criteria are the most logical and

reasonable interpretation of the County's LDC and the DO , and

they should be used in reviewing the NOPC.

E. Does the NOPC Satisfy Applicable Criteria?

3 0 . Consistent with above - described procedure, in

determining whether the NOPC may be app roved, the following

process should be followed. First, it is necessary to determine

whether the revisions are a substantial deviation, as defined by

section 380.06(19), creating further regional impacts that

require additional review and analysis. Secon d, it is necessary

to determine whether the proposed revisions are consistent with

the County's Plan, as required by section 163.3194(1)(a). The

record below does not disclose the specific Plan provisions

reviewed by the County for consistency or compatib ility .

However , County Planner Mengel indicated that prior to the

Board's decision, he made "a very cursory review" that relied

largely upon rep resentations by the applicants and concluded, as

did the Board in its Resolution , that the revisions are

consis tent with the Plan. In addition, four policies in the

Future Land Use Element (FLUE) of the Plan relating to

compatibility were addressed by Petitioners during the DOAH

evidentiary hearing: policies 13.1, 13.2, 13.3, and 13.5.

Also, objective 3 and poli cies 3 - 3 and 3 - 6 of the Recreation and

Open Space Element of the Plan were addressed by the County.

The next consideration is whether the NOPC revisions comply with

applicable LDC criteria since a simultaneous DRI/PUD review is

being made . Finally, Petit ioners are vested only as to what was

approved in the 1984 DO, as later amended. Therefore, it is

necessary to determine whether the revisions being sought are

vested development rights .

a. Substantial Deviation

3 1 . The parties have stipulated, and Res olution 2010 - 22

acknowledges, that the NOPC does not constitute a substantial

deviation from the DO requiring further review and analysis.

b. Co nsistency with the Comprehensive Plan

3 2 . Section 163.3194(1)(a) requires that all development

orders be consi stent with the local government's adopted

comprehensive plan.

3 3 . Resolution 2010 - 22 states that the NOPC is consistent

with the County Plan. See Joint Ex. 10. At hearing, e vidence

regarding FLUE Policies 13.1, 13.2, 13.3, and 13.5 was offered

by Pet itioners' expert, Kenneth B. Metcalf . Although

compatibility is not defined in the Plan, h e opined that the

FLUE, and especially the foregoing policies , are the Plan

provisions that focus on compatibility, and that to the extent

these provisions are appli cable to the proposed changes, the

NOPC revisions are not inconsistent with these provisions or the

FLUE . This testimony was undisputed.

3 4 . Highway A1A is a north - south route that runs along the

western boundary of the DRI. It has received a scenic highway

designation by both the State and federal governments and is

more commonly known as the A1A Scenic Highway (Scenic Highway).

It includes not only A1A, but also the public roads that run

from A1A through the DRI to the beach, including 16th Road an d

the park at its terminus at the beach next to proposed Cluster

35. The 16th Road park is superior to the other beachfront

parks in the County. Also, 16th Road serves as the entryway to

the beach from A1A and is the beach access road most heavily

used b y residents of the communities surrounding the DRI. The

County has expended more planning attention and funding to the

16th Road entryway to the beach than any other beach access road

in the County. To obtain state and federal designation of the

roadway as a scenic highway, the County was required to complete

a scenic highway corridor management plan to ensure its

protection. Also, the County has adopted protective measures

regarding the Scenic Highway as part of the Recreation and Open

Space Element of the Plan.

3 5 . The County and Intervenors contend that the NOPC is

inconsistent with objective 3 and policies 3 - 3 and 3 - 6 of the

Recreation and Open Space Element of the Plan. Objective 3

requires the County to preserve and enhance "[t]he natural,

recre ational, archeological, scenic, historical and cultural

resources of the A1A Scenic Highway." Policy 3 - 3 requires the

County to "support the River and Sea Scenic Highway Corridor

Management Plan," while policy 3 - 6 requires the County to

"improve recreatio nal facilities without adversely impacting

natural resources along the Scenic Corridor."

3 6 . The management plan for the Scenic Highway emphasizes

"context sensitive design" for development occurring within the

corridor. This means that whatever is bui lt around the corridor

should fit in or blend with the location where it is proposed.

The mass and scale of development that is authorized under the

NOPC will dwarf the 16th Road park and marginalize the public

beach access. Also, those persons occupying the new dwelling

units in Cluster 35 (up to 561 units) will be concentrated

directly at the intersection of the beach and the park. These

impacts, whether collectively or singularly, would change the

pristine, rural character of the beachfront and park a t 16th

Road, which continues to exist despite the development in the

DRI to date. Therefore, the revisions conflict with the

corridor management plan and are inconsistent with the

requirement in policy 3 - 3 that the County support that plan.

3 7 . Policy 3 - 6 requires that the County "improve

recreational facilities without adversely impacting natural

resources along the Scenic Corridor." When the DRI was

originally approved in 1984, there were 20 dune cuts distributed

across the five miles of beach border ing the DRI, which provided

direct access to the beach. The DO required all but four to be

restored, i.e. , filled and stabilized, with each remaining dune

cut providing access to one of the four public parks on the

beach. One of the remaining dune cuts i s at the 16th Road park,

which is adjacent to proposed Cluster 35. Besides the adverse

impacts caused by the mass and scale of development adjacent to

that public park, the NOPC allows Petitioners to relocate 16th

Road and the 16th Road park facilities fu rther south. The dune

cut at 16th Road would have to be abandoned as an access point

to the beach. This would require the construction of a dune

walkover, relocation of restroom facilities, and relocating

public parking further from the beach. Collectiv ely, the

impacts to natural resources and recreational facilities

conflict with objective 3, which requires the County to preserve

the natural and recreational resources of the Scenic Highway.

The revisions also contravene policy 3 - 6, which requires the

C ounty to improve recreational facilities without adversely

affecting natural resources along the Scenic Corridor.

3 8 . F or the reasons stated above, the NOPC is inconsistent

with objective 3 and policies 3 - 3 and 3 - 6 of the Recreation and

Open Space Eleme nt of the Plan and in these respects is

inconsistent with the County Plan.

c. Land Development Regulations

39 . Sections 3.04.02.F.1. and 2. require that in order to

approve a PUD reclassification application such as the one

submitted by Petitioners the following criteria must be met:

1. The proposed PUD does not affect adversely the

orderly development of Flagler County and complies

with the comprehensive plan adopted by the Flagler

County Board of County Commissioners.

2. The proposed PUD will not a ffect adversely the

health and safety of residents or workers in the area

and will not be detrimental to the use of adjacent

properties or the general neighborhood.

4 0 . In making the following findings regarding the impact

of the NOPC on residents, adjac ent properties, and the general

neighborhood, the undersigned has relied upon the testimony

presented to the Board and evidence submitted at the DOAH

hearing. See Joint Ex. 9.

41. The proposed new development is immediately adjacent

to the beach and a pu blic park, and it will eliminate the

intended buffer between other DRI development and the ocean for

which the golf course now serves . While the DRI is not fully

built out, it is 26 years old and is substantially developed and

platted. At this stage of d evelopment in the DRI, the residents

of the area and the County have the right to rely on the

stability of the Master Development Plan. Substantial changes

to the Master Development Plan such as those proposed here will

likely cause adverse impacts to res idents owning property in the

DRI and to the community as a whole. The present Lodge

building, while 77 feet high, is configured with its narrowest

end facing the beach, minimizing any visual impact to the public

using the beach and unit owners looking ou t to the ocean. This

building orientation also minimizes shadowing of the beach

adjacent to the site. The Lodge building blends into the area

where it is located and by appearance is no more intensive than

a single - family beachfront home found in other p arts of the

County.

42 . By contrast, the scale and intensity of development

permitted by the NOPC will obstruct or eliminate ocean views of

property owners, principally in Cluster 33 behind the golf

course where several condominium buildings are now locat ed. The

evidence shows that these unit owners with an obstructed view

can also expect a substantial loss (around 45 percent) in value

of their properties.

43. Likewise, the relocation of the existing access to the

public beach and relocation of the pub lic park will adversely

impact the public since they will no longer have the ease of

access to the beach and use of facilities the current park and

beach access provide.

44. Finally, the rural character of the beach area would

be lost, and the new devel opment would not be compatible with

the adjacent residential areas. While Petitioners suggest that

Cluster 35 will be compatible with adjacent areas because the

land uses (residential) are the same, compatibility is better

defined as whether two land uses can co - exist over time without

one having an adverse effect on the other. Given the mass and

scale of development that can occur in the buffer area (golf

course) between the ocean and the other DRI development, the new

Cluster will have an adverse effect on adjacent Clusters. As

such, the NOPC will not be compatible with adjacent land uses.

45. Collectively, these considerations support a finding

that the proposed development will adversely affect the orderly

development of the County, and it will be detrimental to the use

of adjacent properties and the general neighborhood.

d. Compliance with Section 14.5 and the Golf Course Plat

4 6 . The County and Intervenors contend that the

reallocation of 561 residential dwelling units to the new

Cluster 35 wi th an assign ment of the "Ocean Recreation Hotel"

community type is not a land use permitted by section 14.5 of

the DO, th is conflict s with the plat and deed restrictions

recorded to enforce its terms , and section 14.5 must be amended

before the NOPC can be approved . The essence of the argument is

that Petitioners have no vested right to develop that portion of

the DRI in th is manner. Section 14.5 provides that :

Land identified for golf course usage on the

Master Development Plan map . . . shall be

deed an d plat restricted to ensure that the

usage of this land is limited to golf

courses (including associated or appropriate

golf club facilities), open space, parks or,

if approved by the County Commission, other

appropriate recreational usages. . . .

Joint Ex. 1, Attachment A, p. A - 36. This provision in the DO

has never been amended.

4 7 . Because the final configuration of the two proposed

golf courses (Hammock Dunes Course and Ocean Hammock Course) was

not known at the time, section 14.5 further provided that:

Applicant at the time of platting shall

identify the specific acreage for golf

course use. The plat shall show the

boundaries and configurations for golf

course use. The plat shall show the

boundaries and configuration of the golf

courses. The pla t and all deeds of land

within the area so identified as golf course

usage on the plat shall contain restrictions

limiting the usage of the property platted

to golf courses (including appropriate

associated golf club facilities), open

space, parks or, if a pproved by the County

Commission, other appropriate recreational

or governmental usages.

4 8 . As noted earlier, the 1998 NOPC amendment granted the

developer's request for the County to convey back to the

developer 33 acres of property originally designat ed for the

16th Road public park. In exchange, the developer conveyed two

parcels within the DRI to the County, one of which expanded the

size of an oceanfront park on Malacompra Road , while maintaining

a smaller oceanfront park, with improvements, at 16t h Road. The

exchange was made so that the developer could increase the

amount of oceanfront acreage available to the developer for the

design and construction of the Ocean Hammock Golf Course and

golf clubhouse. A s noted above, one of the primary purpose s of

the exchange was that the golf course would serve as a buffer

between the other development and the ocean.

4 9 . C onsistent with the intent of section 14.5, Lowe, one

of the successor developers to Admiral, submitted the Plat for

the Ocean Hammock Gol f Course, which was approved by the C ounty

on November 1, 2001. On December 10, 2001, the County and Lowe

executed a Plat Addendum covering the land described in the golf

course plat. See Respondent Exhibit 10. Section 6 of the

Addendum states that:

The parcels shown hereon will be perpetually

used as golf course land, lake, clubhouse,

appropriate associated golf course

facilities, open space, parks, dune

preservation or such other appropriate

recreational or governmental usages approved

by the Board of County Commissioners.

(Emphasis added)

50 . When read in conjunction with the recorded Plat, Plat

Addendum, and deed restrictions running with the golf course

assumed by Petitioners when they obtained ownership of the golf

course in 2006, s ection 14.5 st rictly limits the uses allowable

on the lands within the Ocean Hammock Golf Course Plat to a golf

course, associated golf course facilities, open space, or upon

approval by the Board, other appropriate recreational uses. The

most reasonable interpretation of those documents, as further

explained by testimony at hearing, is that Petitioners' proposal

to reallocate up to 561 dwelling units to the proposed Cluster

35 within the golf course land and assign the "Ocean Recreation

Hotel" community type to that Cl uster, is not a use permitted by

section 14.5.

51 . Petitioners contend, however, that d espite their

inclusion in the golf course plat, the various uses occurring on

the Lodge property ( e.g. , a 20 - unit lodge, swimming pool,

parking lot, and landscaping) were never intended to be limited

to use by golfers, and that other development can be approved by

the County on land not devoted exclusively to the golf course.

However, the County has always interpreted section 14.5, the

Plat, and the Plat Addendum to m ean that the golf course land

will remain a golf course in perpetuity and cannot be developed

for residential purposes. Notwithstanding contrary evidence

presented by Petitioners, the County's interpretation of those

documents has been credited as being t he most persuasive. Given

these considerations, Petitioners have no vested right under the

current DO to develop the 12 acres for residential purposes and

must request an amendment to section 14.5 in order to authorize

another form of development. F or th is reason, the NOPC should

be denied.

F . The Legislature Extension of the DRI Expiration Date

52 . Section 380.06(19)(c), adopted in 2007, provides that

the expiration dates for DRIs under active development on

July 1, 2007, were extended for three years, regardless of any

prior extension. Based on this provision, by operation of law,

the expiration date for the instant DRI, February 28, 2009, was

extended by three years to February 28, 2012.

53 . Section 14 of c hapter 2009 - 96, Laws of Florida,

extended t he expiration date of DRIs then having an expiration

date of September 1, 2008, through January 1, 2012, by two

additional years. Similarly, section 46 of c hapter 2010 - 147,

Laws of Florida, also extended the expiration date for DRIs then

having an expirat ion date of September 1, 2008, through

January 1, 2012, again by two additional years. The extensions

for DRIs provided in those provisions do not apply to the

instant DRI, because the expiration date for the instant DRI

does not fall within the September 1, 2008, through January 1,

2012, time period. Thus, the expiration date for the instant

DRI is February 28, 2012.

5 4. Although Admiral did not consent to Petitioners filing

the NOPC request, the mutual obligations of Petitioners and

Admiral created und er the various contracts associated with

Admiral's guaranty, and their impact on Petitioners' ability to

file the application , are matters to be resolved in the

appropriate circuit court.

G . Equitable Estoppel

55 . Intervenors claim their members relied on a marketing

video that asserted, among other things, that no more oceanfront

condominiums would be built within Hammock Beach, and that

Petitioners are equitably estopped from developing any buildings

on proposed Cluster 35. A review of the standard co ndominium

purchase contracts used in the DRI shows, however, that the

purchasers clearly acknowledged that they could not, and did

not, rely on oral representations or representations contained

in marketing materials.

H . Other Issues

5 6 . All other iss ues raised by the parties have been

considered and are either rejected or found to be matters that

need not be addressed in order to resolve this dispute.

CONCLUSIONS OF LAW

5 7 . The parties have stipulated to the facts necessary to

establish that Admiral and Intervenors have standing to

participate as parties in this proceeding .

5 8 . This is a de novo proceeding regarding Petitioners'

NOPC application, not an appellate review of the action taken by

the Board. Transgulf Pipeline Co. v. Gadsden Cnty . , 438 S o. 2d

876, 879 (Fla. 1st DCA 1983). However, the record of the

proceeding below was received in evidence and has been

considered by the undersigned in making a decision.

5 9 . As the party challenging the DO, Petitioners have the

burden of proving that the NOPC should be approved. See , e.g. ,

Young v. Dep't of Community Affairs , 625 So. 2d 831, 835 (Fla.

1993). Specifically, Petitioners must show by a preponderance

of the evidence that the proposed revisions to the DO are not a

substantial deviation causin g additional regional impacts and

requiring further review; and that the revisions are consistent

with the applicable provisions of the Plan and LDC and are not

incompatible with surrounding development. Finally, Petitioners

are only vested with what was approved in the original DO and

previously approved modifications and have no development rights

beyond what is approved in those documents. Bay Point Club,

Inc. v. Bay Cnty . , 890 So. 2d 256, 259 (Fla. 1st DCA 2004).

60 . For the reasons previously foun d, the process and

criteria used by the County are reasonable and appropriate and

should be used in reviewing the NOPC.

61 . The evidence supports a conclusion that the NOPC is

not a substantial deviation, as defined by section 380.06(19).

62 . For the r easons previously found, the evidence

supports a conclusion that the NOPC revisions are not consistent

with objective 3 and policies 3 - 3 and 3 - 6 of the Recreation and

Open Space Element of the Plan. Therefore, the NOPC does not

satisfy the requirement in section 163.3194(1)(a) that the DO is

consistent with the local comprehensive plan.

63. For the reasons previously found, the evidence

supports a conclusion that the NOPC does not satisfy relevant

portions of the LDC.

64 . For the reasons previously foun d, the evidence

supports a conclusion that Petitioners have no vested right,

either in the original DO, or subsequent amendments, to place up

to 5 61 dwelling units on land now subject to restrictions that

limit the usage of the property to golf courses and other uses

associated with golf club facilities, open space, parks, or

recreational facilities if approved by the Board. Absent the

amendment of section 14.5 of the DO, th e proposed uses and

development are barred by that provision.

6 5. Finally, t he ext ension of the DO expiration date until

February 28, 2012, is the result of a legislative act. Whether

Admiral's obligations under the DO are extended to the new

expiration date is a matter that should be resolved in the

appropriate circuit court.

RECOMM ENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Florida Land and Water Adjudicatory

Commission en ter a final order determining that the NOPC is not

a substantial deviation; extending the expiration of the DO to

February 28, 2012, by virtue of legislative action in 2007;

approving the reduction in residential units from 4,400 to

3,800; determining that the proposed revisions in the NOPC to

create a new Cluster 35 and transfer 5 6 1 dwelling units to that

Clus ter are inconsistent with one objective and two policies of

the County Comprehensive Plan ; determining that the new Master

Development Plan (which creates a new Cluster 35 and transfer s

541 units) is inconsistent with criteria in LDC sections

03.02.04.F.1. and 2.; and determining that Petitioners have no

vested right to c onstruct up to 561 dwelling units on 12 acres

of land located in t he Ocean Hammock Golf Course that is now

platted and restricted in perpetuity for golf course purposes

only.

DONE AND ENTER ED this 6th day of April , 2011 , in

Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3 060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 6th day of April , 2011 .

ENDNOTE

1/ The exhibits offered by Admiral did not correlate in all

respects with the exhibi t numbers used in the parties'

stipulation or the exhibit list in the Admiral exhibit binder.

For ease of reference, Admiral Exhibits 1 - 5 correlate to the

exhibits under tabs 1 - 5 in its exhibit binder; Admiral Exhibits

6A - 6D are special warranty deeds not listed in the exhibit

binder; the exhibit found under tab 6 in the exhibit binder has

been renumbered Admiral Exhibit 7; and the exhibit found under

tab 8 in the exhibit binder has been renumbered as Admiral

Exhibit 11.

COPIES FURNISHED:

Jerry McDanie l, Director

Florida Land and Water

Adjudicatory Commission

Office of the Governor

The Capitol, Room 1802

Tallahassee, Florida 32399 - 1001

Barbara Leighty, Clerk

Transportation and Economic

Development Policy Unit

The Capitol, Room 1801

Tallahassee, Fl orida 32399 - 0001

Charles Mippi, Jr. , General Counsel

Office of the Governor

The Capitol, Room 20 9

Tallahassee, Florida 32399 - 0001

Carly A. Hermanson , Esquire

Office of the Governor

The Capitol, Room 209

Tallahassee, Florida 32399 - 0001

Deborah A. Kearney , General Counsel

Department of Community Affairs

2555 Shumard Oak Boulevard

Tallahassee, Florida 32399 - 2100

Scott A. Glass , Esquire

Shutts & Bowen, LLP

300 South Orange Avenue, Suite 1000

Orlando, Florida 323 01 - 3373

Wayne E. Flowers, Esquire

Le wis, Longman & Walker, P.A.

245 Riverside Avenue , Suite 150

Jacksonville, Florida 32202 - 4924

Isabelle C. Lopez, Esquire

Quintaros, Prieto, Wood & Boyer, P.A.

One Independent Drive, Suite 1650

Jacksonville, Florida 32202 - 5019

Albert J. Hadeed, Esquire

Flagler County Attorney

1769 East Moody Boulevard, Suite 303

Bunnell, Florida 32110 - 5992

Ellen Avery - Smith, Esquire

Rogers Towers, P.A.

100 Whetstone Place, Suite 100

St. Augustine, Florida 3208 6 - 5775

Michael D. Chiumento, III, Esquire

Chiumento & Gun tharp, P.A.

145 City Place, Suite 301

Palm Coast, Florida 32164 - 2481

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days of the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

render a final order in this matter.