Judge nixes Old Town rental transfers

A circuit court judge on Monday said the Key West City Commission violated its comprehensive land-use plan when it created a new housing category for seasonal homeowners to rent to tourists. The change subsequently allowed developer Pritam Singh to transfer rental rights from a former New Town hotel into Old Town residential neighborhoods.

Circuit Court Judge David Audlin quashed a January ruling by the City Commission, acting as the Board of Adjustment, that would have allowed Singh to transfer rental rights from the Hampton Inn on North Roosevelt Boulevard to homes owned by seasonal residents and other properties along Simonton and Petronia streets. The rights became available because the new development, Parrot Key, contains fewer units than the now-demolished hotel.

In creating the “second homes” category, the city argued that homes can be rented to tourists if the owners have not lived in them full-time during the past five years. The judge ruled that illegal, saying, “Housing units for permanent residents does not only mean housing units in which permanent residents have resided in the last five years.”

Audlin wrote: “The Board of Adjustment’s definition of the phrase ‘housing units for permanent residents’ to exclude a finding of the displacement of permanent residents when ‘during the past five years, the unit was licensed as a transient rental unit or the unit was occupied primarily by seasonal residents, tourists, migrant or transitory workers or similar short-term visitors’ is fundamentally inconsistent with the comprehensive plan.”

Lawyers for the city, Singh and the Key West-based environmental group Last Stand pleaded their cases before Audlin on Friday. Last Stand filed a lawsuit in February challenging the Board of Adjustment’s decision. “Last Stand is pleased for the victory of the citizens of Key West,” said Al Sullivan, the group’s board president. Last Stand attorney Eric Dadd added, “The conclusions the judge came up with were nearly directly in line with Last Stand’s arguments.”

Last Stand argued the new category violated the comp plan because the document contains sections designed to protect permanent housing and limit units that can be rented for less than 28 days. The plan prohibits the number of transient rentals from exceeding 25 percent of the city’s total equivalent of single family homes.

A 2005 Planning Department report stated 32 percent of the city’s dwellings already were transient rentals, a figure City Planning Director Gail Kenson cited when she denied Singh’s proposal. He appealed to the Board of Adjustment, which overruled her.

“I think the court’s interpretation was correct and was the same interpretation I had when I voted on the issue,” said Commissioner Bill Verge, who was the only commissioner to vote against the transfer. “Basically, I’m trying to protect my district. District I has become a dumping ground for anything tourist-related, while other districts are protected from it. Although there are businesses located there, people need to remember that District I is primarily residential.”

Last Stand and local residents raised concerns about the potential of developers moving rental rights from redeveloped hotels into historically residential neighborhoods. For years, the city fought with the owners of homes in Truman Annex to prohibit short-term rentals, before finally allowing some transient rentals in the gated neighborhood.

Since the Board of Adjustment ruling, Singh has transferred two rental rights from the hotel, and planned to transfer several others to a neighborhood along Simonton and Greene streets.

Singh’s planner who helped craft the city resolution, Owen Trepanier, did not return telephone messages left Monday evening.

The City Commission is slated to hear an appeal tonight from Betty and John Hettinger, who objected to the transfer of rental rights to their neighbors’ home at 707 Simonton St. Dadd, the Last Stand’s attorney, said he has conferred with the Key West City Attorney’s Office, and thinks the appeal will be postponed until the city decides whether to appeal Audlin’s ruling.

tohara@keysnews.com