Appelrouth Amendment: All Claims Supporting Special Exemption Checked False

by Arnaud and Naja Girard

Last Tuesday the City Commission rewrote the law so that five property owners in the Key West Historic Residential/Office (HRO) zoning district became expressly exempted from the HRO no “new transient lodging” restriction.

The commissioners decided that the law was unfair to those five property owners. They would not be able to rebuild their “nonconforming” businesses after destruction by a hurricane.

But if the law is unfair, why change it for only five properties at the corner of Appelrouth Lane and Whitehead Street? What about the other 200 or so property owners in Key West’s HRO district?

This is the new HRO language:

Sec. 122-926. – Intent. “Notwithstanding the Appelrouth Business Corridor, Tthe HRO district shall not accommodate new transient lodging or guesthouses…”

And the following is what is now permitted “as-of-right” for the lucky ones in the so-called “Applerouth Business Corridor.”

Sec. 122-927. – Uses permitted. “… (11) Hotels, motels, and transient lodging within the Appelrouth Business Corridor.“

Let’s fact check the claims that were made in support of the special exemption.

Claim #1: “Trouble Being Able to Build Back”

Commissioner Clayton Lopez claimed property owners would not be able to rebuild nonconforming businesses if they were destroyed by a hurricane.

“I’m also concerned about the small businesses that are having trouble being able to build back.” [Commissioner Clayton Lopez, City Hall, August 7, 2018]

Yet Article 2 of the city’s zoning law clearly provides all Key West property owners the right to rebuild and continue nonconforming uses. A property owner may not, however, expand a nonconforming use when rebuilding.

Sec. 122-27. – Intent. “The intent of this article is to permit a nonconforming use and a noncomplying structure or building to be continued, to be reconstructed or replaced, or to be repaired or maintained under certain conditions, but not to encourage their expansion.”

So, the not being able to “rebuild” claim checks as false.

Claim #2: Hurricane Irma Recovery

Commissioner Kaufman claims,

“This request was made to assist the businesses in this area in the wake of the recovery from Irma and did not see any harm in it.” [Sam Kaufman, Facebook, August 9]

However, the original application was filed in January of 2016. Irma didn’t hit the Keys until September 10, 2017.

Aside from roof damage from a fallen tree at 2 Cents restaurant, there is no visible hurricane damage to those five properties around Appelrouth Lane.

The City may have been trying to help, but there’s much more to this story than compassion for hurricane victims.

Claim #3: “Only 4 long-term residential units”

Planning Director, Patrick Wright, claimed there are only 4 long-term residential units among the five properties. One at 2-Cents restaurant and three in Planning Board member Michael Browning’s building at 402 Appelrouth Lane.

This claim is highly questionable.

When we went down to Appelrouth Lane we were intrigued by the building at 517 Whitehead Street, one of the five properties.

According to Wright this building is already functioning as a guesthouse and doesn’t house permanent residents. Yet we couldn’t find any way to rent short-term at this address.

City records show 10 units at 517 Whitehead.

Keys Energy records show there are 6 electric meters in use.

With spalling cement, AC window units, and a fleet of conch cruisers in the alley, 517 Whitehead has all the telltale signs of Key West workforce housing.

Claim #4: “Merely Recognizing Longstanding Nonconforming Uses”

City Commissioners were told they were merely being asked to recognize long-standing nonconforming uses on these properties.

“This amendment is to recognize it’s a small pocket of mixed-use properties that are basically centered around Appelrouth Lane, that are currently nonconforming.” [Laurie Tompson, Trepanier & Associates, August 7, 2018 City Commission meeting]

But were all five properties involved in nonconforming transient rentals?

According to City records, 409 Appelrouth Lane and 413 Appelrouth Lane are indeed operating as guesthouses.

However, 416 Appelrouth is a restaurant and one long-term residence.

517 Whitehead certainly looks like it’s a long-term residential apartment building.

533 Whitehead is a retail store and a scooter rental shop.

402 Appelrouth Lane is a mix of permitted uses: offices and long-term residences; it was formerly a boarding house.

With this amendment any property inside the “Appelrouth Business Corridor” can now engage in transient rentals.

Commissioner Romero appeared confused about the issue.

Romero: “You’re not going to be empowering additional actual units?”

Wright: “Right. Right. There would be no net increase.”

But the law speaks for itself: Each of the properties in the new “Appelrouth Business Corridor” may now – “as of right” – develop into “hotels, motels, and transient lodging.” (Section 122-927: “… (11) Hotels, motels, and transient lodging within the Appelrouth Business Corridor.”)

All these property owners will need are transient rental licenses and an adequate number of BPAS (building allocations).

The claim that the city is merely recognizing longstanding nonconforming uses checks as false.

Claim #5: “No net loss of long-term housing”

The Planning Director told commissioners,

“There would be no net increase or displacement of permanent residential housing as I’ve stated before this Commission many times. This will just follow our transient transfer ordinance.”

The official theory is that property owners are only able to transform existing long-term housing into transient housing by swapping their long-term housing use with a property owner that will stop renting to transients and begin renting to permanent residents somewhere else in the City. This is why officials claim there would be “no net loss” of permanent residential units.

In fact, in a previous investigation of transient license transfers, we found that the City created a back-door system that allows transient rentals to metastasize and replace permanent housing.

It’s a simple trick: Properties with multiple transient licenses regroup their guestrooms under one license and transfer the freed-up licenses to their new guesthouse project (or sell them). In these scenarios there are no transient units being returned to permanent housing.

Why are there so many transient licenses floating around? Because in 2012, in the middle of a declared “housing crisis,” this City Commission legalized illegal transient rentals active in April of 2010. (Operating an Illegal transient rental is a criminal offense under city code.)

So “no net loss of long-term residential units” for the city? We’ll call this claim very unlikely.

Claim #6: “Former Planning Director Was Not Opposed”

Finally, Wright claimed that his predecessor, Thaddeus Cohen, was not opposed to relaxing the transient lodging prohibition for these five properties.

The analysis put forth by Mr. Cohen, as Planning Director, of the initial 2016 application for a zoning change, declared that special treatment of just 5 property owners in the HRO district would create a bad precedent and was therefore not in the interests of orderly planning.

“The HRO zoning district has a number of existing nonconforming uses throughout the district as a whole. Allowing for this block to amend its zoning and the expansion of the HRCC-1 district could set a precedent for other areas in the HRO that contain existing nonconforming uses to do the same…”

Questions:
So how could so much misinformation find its way into a city commission meeting?

When commissioners sit in their “quasi-judicial” capacity they are in effect acting as judges; all participants, included city staff, are under oath and testify under penalty of perjury. When the commission sits in its legislative capacity however no one takes the oath.

City Attorney, Shawn Smith, hinted:

“Given it’s site specific and it affects such a few number of properties, I would tend to think you would use it in a quasi-judicial vein.” [Shawn Smith, City Hall, August 7, 2018]

Mayor Craig Cates however conducted the meeting as a legislative session; no oath to “tell the whole truth” was administered.

Just before midnight, with almost no discussion, the City’s “favor machine” was quickly turned on for about 10 minutes, bringing a potential financial windfall of millions of dollars to the five chosen ones.

Guesthouses and hotels have sold recently in the Key West area for between $500,000 and a million dollars per room.

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