A lawsuit filed recently against the City of Hollywood could determine how developers and municipalities handle Florida’s Live Local Act, a controversial law meant to spur more affordable housing.

New York-based developers Condra Property Group sued the city Jan. 10 after it denied the group’s request to build a 17-story mixed-use project, with affordable housing units, restaurants and a parking garage, under the Live Local Act. If approved, the property would be the second tallest building north of Hollywood Boulevard after the Margaritaville Hollywood Beach Resort.

Condra says its proposal was designed in accordance to the Live Local Act, a 2023 law which offers tax breaks to developers to build supersize projects with apartments dedicated to affordable housing. Under the law, developers can override local building controls, like zoning, density and height limits, so long as their projects deliver a certain amount of affordable housing units. While the proposed Condra building would be eight inches shorter than Margaritaville, the City of Hollywood denied the request, claiming that Margaritaville cannot be used as a height benchmark because the resort was built under special circumstances.

“The denial was based on the applicant’s interpretation of the legislation, specifically regarding the applicability of height requirements to the site. The City did receive the suit and is reviewing accordingly,” city spokesperson Joann Hussey said in a statement to the Herald.

The lawsuit has greater implications beyond Hollywood, said Keith Poliakoff, an attorney representing Condra. This is the first time a Live Local Act-related lawsuit involving height restrictions has been filed.

“There are numerous developers who are waiting in the wings, waiting to confirm that the court is going to support Live Local and agree with the position of the developer here that the height of the Margaritaville is the benchmark that the city has set itself and that it can be matched by others,” Poliakoff said. “To get a project to the point where we’re at cost over a million dollars, so there are a lot of developers who are waiting to see the outcome here before making that same expenditure.”

Considered to be a “historic” piece of housing legislation meant to help ease the housing crisis for low-income Floridians, the Live Local Act led to disputes between developers, residents and local governments within its first year. Outraged local officials complained of losing control over planning. Reports showed that the law allowed developers to avoid paying millions in local taxes without providing much affordable housing. And communities argued that the law’s definition of “affordable” is far-fetched and out of touch.

A similar height issue unfolded in Miami Beach when the owners of the iconic Clevelander Hotel and Bar announced in September 2023 they wanted to replace the property with a 30-story tower, with 40% of units under the higher range of what the law considers to be “affordable.” The mayor called it “worst idea ever.” The owners amended the proposal to 18 stories.

But this new lawsuit may give developers the upper hand if the court rules in Condra’s favor.

Will this suit change Hollywood’s skyline?

A towering structure that dwarfs the quaint, squat retro hotels of Hollywood, Margaritaville was opened in 2015 after it was built on city-owned land under a 99-year lease. The buildings surrounding Margaritaville and what would be Condra’s project are zoned to be maximum five stories tall, according to the Hollywood Zoning Map.

The developers own 11 buildings between Oklahoma and Nebraska streets between Ocean Drive and the Broadwalk. Initially, the plan was to build luxury hotels, but backlash from residents squashed that idea, Mark Drachman, one of the Condra co-owners, told the Herald last year. The Live Local Act encouraged the developers to change course.

Condra proposed a 17-story mixed-use development with 282 residential units, including 114 units set aside for affordable housing. The project would include three buildings: a 183-foot mixed-use residential tower, a 6-story parking structure and 2-story commercial beach club. According to the lawsuit complaint, the finished product would be valued at $80,000,000. Condra has spent $1 million in fees hiring architects and other professionals to design the project to be in accordance with the Live Local Act, the complaint says.

In June 17, 2024, the developers submitted for the project’s final approval, according to the complaint. The lawsuit alleges that the city hired a law firm to lobby state lawmakers to change the language of the law, specifically when it comes to height matching.

“Instead, the City continued to delay final approval, while working unsuccessfully behind the scenes to change state law,” the lawsuit says.

The Live Local Act says that a municipality may not restrict the height of a proposed development below the highest currently allowed height for a commercial or residential development within one mile of the proposed development. But the law also says that existing buildings that have “received any bonus, variance or other special exception for height” cannot be used as a height benchmark for proposed Live Local Act developments.

On Aug. 24, 2024 the city denied the developers’ request, arguing that Margaritaville is located within a “specialized zone” that allows the City Commission to determine building height “on a case-by-case basis”

The lawsuit argues that the city misinterpreted the law and that Margaritaville was built “without receiving any bonus, variance, or special exception from the City.”

“The city will do everything in its power to prevent height on the ocean,” Poliakoff said. “Although they failed at the Florida Legislature level, they are forcing the developer to take this to court to tell the city, ‘What’s good for you has to be good for everyone.’ If you’re approving the height of the Margaritaville hotel, you have to approve it for others.”

Hollywood Mayor Josh Levy has been ready for this fight since last summer, when he told the Herald that the law clearly prevents developers from using Margaritaville as a height standard and that he was prepared to prove it in court, if necessary.

“We have no doubt that the courts would agree with the plain meaning of the law and our code and uphold Hollywood’s height limits for Hollywood Beach,” he said.

Article Link: Developer’s plans for high-rise on Hollywood Beach were rejected. Now they are suing
Author: Amanda Rosa