Item R09BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: November 17, 2010
Bulk Item: Yes No X
AGENDA ITEM WORDING:
Division: County Attorney
Department: County Attorney
Staff Contact Person: Cynthia L. Hall x 3174
Discussion and direction regarding whether to seek an opinion from the Florida Attorney General
regarding the use of tourist development taxes for the proposed Truman Waterfront project.
ITEM BACKGROUND: On September 15, 2009, the City of Key West, in its capacity as the Naval
Properties Local Redevelopment Authority, accepted a proposal for development of the Truman
Waterfront area from the Meisel & Spottswood Marina Management Company, LLC ("Meisel
Spottswood"). On page 27, the proposal stated that the project would be financed either by (a) the
City's issuance of a 20-year revenue bond in the amount of $34MM, supported by a pledge of the
entirety of the City's share (approximately 50%) of the fourth -penny tourist development tax (added by
the BOCC via ordinance 004-2009 in March 2009) as a pledge for issuance of the bond, or (b) by
Meisel Spottswood obtaining a traditional bank loan. On or about July 16, 2010, in response to a
memo issued by an Assistant County Attorney raising questions about the use of tourist development
taxes for the project (Attachment A), the City forwarded a letter to the County Administrator
(addressed to the County Administrator and County Attorney) asking the County to seek an Attorney
General opinion using a letter and legal memo prepared by Meisel Spottswood's legal counsel.
(Attachment B.) After the BOCC took no official action at its August 18, 2010 meeting, on October
18, 2010 the City sent a letter to the Attorney General requesting the opinion. (Attachment C.) On
October 29, 2010, the Attorney General's office stated that it would not issue an opinion to the City
inasmuch as the County is the entity that levies, collects, and distributes the bed tax revenues.
PREVIOUS RELEVANT BOCC ACTION: On August 18, 2010, the BOCC discussed the request
for Attorney General opinion from the City of Key West. (Minutes -- Attachment D .)
CONTRACT/AGREEMENT CHANGES: Not applicable.
STAFF RECOMMENDATIONS:
TOTAL COST: $0 BUDGETED: Yes X No
COST TO COUNTY: $0 SOURCE OF FUNDS:
REVENUE PRODUCING: Yes No X AMOUNT PER MONTH Year _
APPROVED BY: County Atty X OMB/Purchasing _ Risk Management
DOCUMENTATION: Included X To Follow Not Required
DISPOSITION: AGENDA ITEM #
Attachment A
MEMORANDUM
Office of the Monroe County Attorney
TO: Suzanne A. Hutton, County Attorney
FROM: Cynthia L. Hall, Assistant County Attorney 0
DATE: May 17, 2010
SUBJECT: Proposed Truman Waterfront Marina Project and the Use of Tourist Development
Taxes As A Pledge for Revenue Bonds for the Project
The City of Key West has recently accepted the proposal, pursuant to RFP, from Meisel
& Spottswood Marina Management Company, LLC ("MSM"), entitled "Marina and Upland
Development Opportunity for the Truman Waterfront" ("Proposal'l. This memo addresses a
number of issues with respect to the use of tourist development tax revenue as a pledge for
issuance of revenue bonds to pay for development and operating costs for the project.
The MSMProposaf
The Proposal calls for MSM to design, develop, and operate a project beginning on the
north at a proposed bridge; over Admiral's Cut, then running south behind Truman Annex, and
wrapping around to the Outer Mole. (Proposal, p. 11.) MSM would be hired by the City
pursuant to a Management Agreement. (Proposal, pp. 51-77.)
Running from north to south, the project would include the following elements: a new
"Harry S Truman Waterfront Park" behind the Truman Annex; marina and marina building with
restaurant; "family waterfront park", and an "ellipsetevent grounds" between the end of Southard
St. (where the County used to have overflow parking, near the Eco-Discovery Center) and the
Outer Mole. (Proposal, p. 11.) Phase I of the project would consist of the Harry S Truman
Waterfront Park and the marina. (Proposal, p. 90.) Phase H of the project would consist of the
waterfront family park and ellipse event grounds. (Proposal, p. 91.)
"Development" costs for the project total $13.2MM for Phase I and $6.2MM for Phase II.
(Proposal, pp. 90-91.) Development costs include engineering, planning, legal, architectural, and
Project management fees and appear to include construction costs.
1 The details mentioned herein are taken from the Proposal submitted by MSM to the City of Key West
and a Power Point presentation made by MSM to the City.
2 According to an article in the Key West Citizen on April 27, 2010, Admiral's Cut (the canal) and the
Westin Key West Resort & Marina are currently owned by the Walsh family, and there is no bridge over
Admiral's Cut currently linking Truman Waterfront (owned by the City) with the property owned by the
Walsh family, but Key West City Commissioner Mark Rossi has proposed taking Admiral's Cut by
eminent domain.
The Proposal provides that the project will be financed in one of two ways:
(1) by the C�'s issuance of a 20-year revenue bond in the amount of $34MM,
supported by a pledge of the entirety of the City's share (approximately 50%) of the
latest, 4 h-penny tourist development tax added by the Board of County Commissioners
via Ordinance 004-2009 in March 2009;3 or
(2) a traditional, 20-year bank loan. (Proposal, p. 27.)
Income from the project is defined in the Proposal to include slip revenue, fuel sales and
restaurant rental ("Gross Operating Revenue) plus $2.7MM annually in bed taxes. Expenses
are defined to include operating expenses including payroll and maintenance; management fee
equal to 5% of monthly Gross Operating Revenue; "incentive management fee";° debt service
assuming 4.5% interest; and principal required to repay the bond or loans Net cash flow to the
City (including bed tax income) including debt service but not including repayment of the
principal of the bond (or loan) ranges from $1.391MM in Year 1 (2012) to $3.123MM in Year
20 (2031). Including repayment of the principal of the bond (or loan), projected adjusted annual
net cash flow to the City would range from $318, 327 in Year 1 to $604,199 in Year 20.6
Overview: The Local Option Tourist Development Tax Ad (Section 125.0104, F.S.) and
Monroe Coanty's Tourist Development Plan
The most recent (fourth) penny of Monroe County bed tax was enacted pursuant to
Section 125.0104(3)(m)l., F.S., which states:
In addition to any other tax which is imposed pursuant to this section, a high
tourism impact county may impose an additional 1 percent tax on the exercise of the
privilege described in paragraph (a) by extraordinary vote of the governing board of the
county. The tax revenues received pursuant to this paragraph shall be used for one or
more of the authorized uses pursuant to subsection (5).
Section 125.0104(4Xa) provides that all local option tourist development taxes may only
be levied and imposed pursuant to an ordinance containing the tourist development plan, enacted
by the governing board of the county. Section 125.0104(4)(d) states that after enactment of the
ordinance, the plan may not be substantially amended except by an ordinance enacted by an
Per the terms of the ordinance and Section 125.0104, the additional fourth penny was first collected
beginning on June 1, 2009.
4 Gross Operating Profit is defined as Gross Operating Revenue less operating expenses and
management fee equal to 5% of Gross Operating Revenue. The "incentive management fee" is defined as
200/6 of Gross Operating Profit less debt service (interest only). (Proposal, p. 59111.1 (part of the
"Management Agreement'), and p. 77 (Income Projections).
s The costs of issuance of the bond (legal, underwriting, etc.) are not included Presumably they would
betakenfrom the revenue generated by the bond.
Alternatively, in the Power Point presentation, MSM proposed that the bond could be retired in Year 7
(2018), in which case net cash flow to the City would begin in Year 8 (2019).
K
affirmative vote of a majority plus one of the Board of County Commissioners. Ordinance 004-
2009 was passed by a unanimous vote of the BOCC.
The tourist development plan enacted by the BOCC is contained in Section 23-200 of the
Monroe County Code. As amended by Ordinance 4-2009, the plan provides that the fourth
penny (as well as the third penny) may only be used for the following purposes, which
correspond to the acceptable uses listed in Section 125.0104(5Xa) and (b):
(a) To acquire, construct, extend, enlarge, remodel, repair, improve,
maintain, operate or promote one (1) or more publicly owned and
operated convention centers, sports stadiums, sports arenas,
coliseums or auditoriums, within the boundaries of the county or
sub -county special taxing district in which the tax is levied
(b) To acquire, construct, extend, enlarge, remodel, repair, improve,
maintain, operate or promote one (1) or more museums, zoological
parks, fishing piers or nature centers which are publicly owned and
operated by not -for -profit organizations and open to the public.
However, these purposes may be implemented through service
contracts and leases with persons who maintain and operate
adequate existing facilities.
(c) To fund convention bureaus, tourist bureaus, tourist information
centers, and news bureaus as county agencies or by contract with
the chambers of commerce or similar association in the county.
(d) To finance beach improvement, maintenance, renourishment,
restoration, and erosion control.
(e) To finance fishing piers.
(f) To advertise and promote the district and/or the county within
domestic and international markets.
(g) To promote county festivals, tournaments, races and other tourist -
related activities.
(h) To promote county tourist -oriented cultural events such as visual
and performing arts, including but not limited to theater, concerts,
recitals, opera, dance, and art exhibitions.
Section 125.0104(4)(c) then states: "The revenues to he derived from the tourist
development tax may be pledged to secure and liquidate revenue bonds issued by the county for
the purposes set forth in subparagraphs (a)l . and 4. or for the purpose of refunding bonds
previously issued for such purposes, or both; ... Such revenue bonds ... may be authorized and
issued in such principal amounts, with such interest rates and maturity dates, ... as the governing
board of the county shall provide. The Legislature intends that this paragraph shall be full and
complete authority for accomplishing such purposes, ..."
3
Section 125.0104(7) provides:
(7) AUTOMATIC EXPIRATION ON RETIREMENT OF BONDS. --Anything
in this section to the contrary notwithstanding, if the plan for tourist development
approved by the governing board of the county, as amended from time to time pursuant to
paragraph (4)(d), includes the acquisition. construction, extension, enlargement,
remodeling, repair, or improvement of a publicly owned and operated convention center,
sports stadium, sports arena, coliseum, or auditorium, or a museum that is publicly owned
and operated or owned and operated by a not -for -profit organization, the coon
ordinance levying and imposing the tax shall automatically CgRire upon the later of
(a) Retirement of all bonds issued by the county for financing the same: or
(b) The expiration of any agreement by the county for the operation or
maintenance, or both, of a publicly owned and operated convention center, sports
stadium. sports arena, coliseum, auditorium. or museum. However, nothing
herein shall preclude that county from amending the ordinance extending the tax
to the extent that the board of the county determines to be necessary to provide
funds with which to operate, maintain, repair, or renew and replace a publicly
owned and operated convention center, sports stadium, sports arena, coliseum,
auditorium, or museum or from enacting an ordinance which shall take effect
without referendum approval, unless the original referendum required ordinance
expiration, pursuant to the provisions of this section reimposing a tourist
development tax, upon or following the expiration of the previous ordinance.
(Emphasis added)
Discussion
1. The City has no authority to issue revenue bonds using Monroe
County tourist development taxes as security.
In general, Florida law provides that a county, municipality, and special district have the
authority to issue revenue bonds after a referendum (Section 100.201, F.S.) and bond validation
lawsuit (Ch. 75, F.S.). See also Section 125.01(1)(r), F.S. (County's power to carry on county
government includes the power to "issue bonds, revenue certificates, and other obligations of
indebtedness, which power shall be exercised in such manner, and subject to such limitations, as
may be provided by general law.'J; and Section 159.08, F.S. ("The governing body of any
[county or municipality] shall have the power and it is hereby authorized to provide by ordinance
or resolution, .. for the issuance or revenue bonds ...: J.
However, the plain language of Section 125.0104(5Xc), F.S. states that revenue bonds
using tourist development dollars as security may only be issued by a : "The revenues to
be derived from the tourist development tax may be pledged to secure and liquidate revenue
bonds issued by the county ..." (emphasis added).
4
Thus, in all reported decisions but one involving the issuance of revenue bonds using .
tourist development taxes as security, the issuer was the county. See State oJFlorida v. Osceola
County, 752 So.2d 530 (Fla. 1999); Rowe v. St. Johns County, 668 So.2d 196 (Fla. 1996) (public
convention facility bonds); Tamar 7600, Inc. v. Orange County, 686 So.2d 790 (Fla. 5 h DCA
1997) (bonds for construction of professional sports stadium).
In one instance, it appears that revenue bonds supported by tourist development taxes
were issued by Tampa Sports Authority (TSA), an independent special district, pursuant to an
interlocal agreement with Hillsborough County. Poe v. Hillsborough County, 695 So.2d 672,
675 (Fla. 1997) ("The TSA proposed to issue up to $33 million in bonds supported by states
sales tax monies,11.5 million in bonds supported by the local option four -cent tourist
development tax, and $160 million in bonds supported by revenues to be realized from a county-
wide local option half -cent sales tax.'J However, these taxes were collected under Section
125.0104(3xl) (authorizing counties to collect tourist development taxes in order to pay the debt
service on bonds issued to finance sports franchise facilities and convention centers), not Section
125.0104(3xm), which in turn requires one of the uses under Section 125.0104(5).
In short, I found no authority that would allow the City to issue the proposed revenue
bonds using tourist development taxes.
Also important to consider is the following: By statute, and according to the Monroe
County tourist development plan, bed taxes must be returned to the geographic area in which
they are generated. Because Key West generates approximately 50% of total bed taxes, DAC 1
(basically, Key West) will receive approximately 50% of bed taxes. However, the use of the bed
taxes within that geographic area is up to the BOCC, on advice of DAC I and the TDC. The
DAC and the TDC may choose to recommend that all of the DAC's share of the fourth penny be
used for this one project and the BOCC may choose to accept this recommendation — but it may
not.
2. Tourist development tax revenue cannot be pledged for revenue
bonds, because none of the elements of the project as currently
described in the Proposal is an acceptable purpose for the revenue
under Section 125.0104(5)(a)1. and Section 23-200 of the Monroe
County Code (the tourist development plan).
Even though the fourth penny could be used for any of the purposes listed in the Monroe
County tourist development plan (listed above), which corresponds to Section 125.0104(5)(a)1.
through 4. and (b), F.S., Section 125.0104(5)(c), F.S., states that revenues derived from tourist
development taxes may be pledged to secure revenue bonds issued g& for the purposes listed in
Section 125.0104(5xa)1. and 4.
' See also Poe v Hillsborough County, 0004 WL 527787, at *2, 9 5 (Fla. 13" Circuit Ct. June 20, 1997)
(final judgment after remand from Supreme Court) ("TSA has the authority to issue bonds of the type
described herein, TSA and the County have the authority to enter into the Intedocal Agreement for
Stadium Financing and the County and the City have the authority to enter into the Community
Investment Interlocal Agreement, pursuant to Chapter 96-520, Laws of Florida, ... Section
125.0104(3xl), Florida Statutes, and other applicable provisions of law (collectively, the `Act').").
�I
Section 125.0104(5xa)1. states that revenues may be used by the county for the
following types of capital projects: convention centers, sports stadiums, sports arenas, coliseums
or auditoriums that are publicly owned and operated, or museums that are publicly owned and
operated or owned by non -profits and open to the public.
The description of the project in the Proposal is of a marina for mega -yachts and power
boats, a restaurant to service the facility, a promenade, a parking lot, and two parks. None of the
elements in the Proposal is described as a convention center, sports stadium, sports arena,
coliseum or auditorium (or museum). As currently described, then, tourist development taxes
cannot be used as security for revenue bonds for the project
One Commissioner has questioned whether the taxes could be used as security for
revenue bonds if the marina were called a `water sports arena" rather than a marina. In AGO 83-
18, the Attorney General defined an "arena" as "`a central area or open space within an enclosure
used for public entertainment ... a building containing an area used especially for indoor sports'
... and as `a platform, ring, area or the like, used for sports or other fors of entertainment,
surrounded by seats for spectators, ...." A marina does not meet this definition. See also
Section 101-1, Monroe County Code (defining a marina as "a facility for the storage (wet and
dry), launching and mooring of boats together with accessory retail and service uses, ....").
Even if the description of the elements was changed to fall within the Section
125.0104(5Xa)1. categories, to the extent that tourist development taxes were pledged as security
for revenue bonds, the funds that could be used would be limited to a percentage of the total
based on either square footage or dollar figures relative to the total for the project. Alternatively,
to answer one Commissioner's question, the project could be subdivided and tourist development
taxes could be used as a pledge for revenue bonds for that portion only, but only if the elements
for that portion included something from the list in Section 125.0104(5Xa)l.8
One Commissioner has also asked whether the tax could be pledged as security for
issuance of revenue bonds for the parks described in the Proposal. The answer is no. As
mentioned above, in drafting the legislation, the Florida legislature decided that tourist
development taxes could only be used as security for revenue bonds for the types of projects
listed in Sections 125.0104(5)(a)l. and 4. (and no others). A park is not one of the categories of
capital projects in Section 125.0104(5Xa)1., F.S. Section 125.0104(5xa)4., F.S., refers to
beaches and "beach park facilities". However, there are no facts in the Proposal currently to
suggest that anything in the Proposal is a "beach park facility". The only other mention of a
"park" is a "zoological park" in the Act is in Section 125.0104(5)(b).9 However, the tax cannot
be used for security for subsection 5(b) projects.
For the reasons stated below, however, other problems would still bar the use of tourist development
taxes as security for the revenue bond, particularly the proposal to have a private entity (MSM) operate
the marina, restaurant and parks.
s "Tax revenues received pursuant to this section by a county of less than 750,000 population imposing a
tourist development tax may only be used by that county for the following purposes in addition to those
purposes allowed pursuant to paragraph (a): to acquire, construct, extend, enlarge, remodel, repair,
improve, maintain, operate, or promote one or more zoological Basks, fishing piers or nature centers
which are publicly owned and operated ... "
6
For the same reason, the elements currently described in MSM's Proposal also would not
qualify for direct fimding using tourist development taxes under either Section 125.0104(5)(a),
(b), or the Monroe County tourist development plan.
3. Retirement of the bonds will not cause the ordinance imposing the tax
to expire, unless the project is redefined to include any of the types of
capital projects listed in Section 125.0104(5)(a)1., in which case the
ordinance would expire when the revenue bonds were paid off, and
the County would lose the ability to collect any portion of the bed
taxes.
Section 125.0104(7), F.S. creates a "Catch-22" situation for the County. Under Section
125.0104(7), F.S., if the County's tourist development plan provides (as it does) that tourist
development taxes can be used for acquisition, construction, extension, enlargement or
renovation of 6 types of capital projects,10 then the county ordinance automatically expires when
(a) bonds issued by the County for financing "the same" are retired, or (b) any agreement
between the County and a third party for operation and maintenance of these 6 types of capital
projects expires. See also AGO 2000-56 (where St. Johns County used a portion of its tourist
development taxes to pay the debt service on a convention center, retirement of the bond would
cause the entire ordinance to expire, and the ordinance could not be reenacted without a new vote
referendum).
Here, no part of the Proposal currently calls for issuance of revenue bonds to finance
construction of any of these 6 types of capital projects. As long as the bonds are not used to
finance construction of these 6 types of projects, the retirement of the bonds will cause the
ordinance to expire.
On the other hand, if the project were redefined such that the revenue bonds were issued
to finance construction of the 6 types of capital projects listed in Section 125.0104(7) and any
portion of tourist development taxes were to be used in the financing (or if the County were to
enter into an O&M agreement for these types of buildings), then under Section 125.0104(7),
retirement of the bonds described in the Proposal would cause the ordinance to expire and the
County's ability to collect all 4 pennies throughout the Keys would expire.
4. The tourist development taxes cannot be pledged to secure revenue
bonds for the capital project, because they cannot be pledged to
secure revenue bonds for projects that would be operated by a private
entity such as MSM.
a. The general rule.
In all bond validation proceedings, the court reviews the bond to determine (1) whether
the public body had the authority to issue the bond; (2) whether the purpose of the bond was
legal; and (3) whether the bond issuance complied with the requirements of the law. Poe v.
Hillsborough County, 695 So.2d 672 (Fla. 1997).
10 Convention center, sports stadium, sports arena, coliseum, auditorium and museum.
7
In Poe, revenue bonds to finance construction of a new football stadium were supported
by local option tourist development taxes in addition to state and local sales taxes. 695 So.2d at
675. The stadium was to be owned and operated by the Tampa Sports Authority (TSA)" but
leased to the Tampa Bay Buccaneers. Id. at 674. The lease allowed the Buccaneers to keep the
first $2 million in revenue from non -Buccaneer events and thereafter to keep 50°/a of the
remaining revenue from these events. Id. The bonds were issued by the TSA, apparently
pursuant to the authority to issue revenue bonds granted to TSA in Ch. 96-520 and an interlocal
agreement between TSA and Hillsborough County.
A taxpayer objected, arguing that this lease arrangement constituted the use of public
funds to benefit the private franchise in violation of Article VIL s. 10 of the Florida Constitution,
which states: "Neither the state nor any county, school district, municipality, special district, or
agency of any of them, shall ... given, lend or use its taxing power or credit to any corporation,
association, partnership or person; ...."12
The Supreme Court held that there was no problem — i.e., that there was still a
"paramount public purpose." Quoting from its prior opinion in State v Board of Control, 66
So.2d 209, 210 (Fla. 1953), the Florida Supreme Court held:
The mere fact that some one engaged in private business for private gain will be
benefited by every public improvement undertaken by the government or a governmental
agency, should not and does not deprive such improvement of its public character or
detract from the fact that it primarily serves a public purpose. An incidental use or
benefit which may be of some private benefit is not the proper test in determining
whether or not the project is for a public purpose.
Board of Control, 66 So.2d at 210-11 (involving revenue bonds to finance construction of
dormitories at University of Florida).
However, the bonds in Poe were issued using tourist development taxes collected under
Section 125.0104(3)(0 (for sports franchise facilities). This section states that funds may be used
to pay the debt service on bonds issued to finance construction or renovation of a professional
' TSA is an independent special district. See http://www.tampasportsauthority.com/mission.htaL
12 Of note, the rest of Art. VII, s. 10 goes on to read "but this shall not prohibit laws authorizing:.. .
(c) the issuance and sale by any county, municipality, special district or other local governmental body of
(1) revenue bonds to finance or refinance the cost of capital projects for airports or port facilities:.. .
when, in either case, the revenue bonds are payable solely from the revenue derived from the sale,
operation or leasing of the projects." This language does not appear to apply at present, because (a) the
project is not described as a "port facility" and (b) the Proposal appears to say that the bonds will be
repaid, in part, using future bed tax revenues in addition to revenue from the operation and leasing.
Art. VII, s. 10 goes on further to say that if the project did qualify for the "port facilities" exception, it
would lose its tax-exempt status: "If any project so financed, or any part thereof, is occupied or operated
by a private corporation, association, partnership or person pursuant to a contract or lease with the issuing
body, the property interest created by such contract or lease shall be subject to taxation to the same extent
as other private owned property."
8
sports franchise facility (or spring training facility) "either publicly owned and operated, or
publicly owned and operated by the owner of a professional sports franchise or other lessee ...: '
Because these requirements were met in Poe, no one challenged — and the courts did not reach —
the issue of whether a bond could be issued using revenue collected under 125.0104(5xa)1.13 In
other words, under Section 125.0104(3)(0, there is no requirement that the project be publicly
owned and operated.
b. Special rule, where tourist development tax dollars are collected under
Section 125.0104(3)(m) and spent under Section 125.0104(5)(a)1.: The
project must be "publicly owned and operated."
The 125.0104(3)(0 rule for convention centers, sports facilities and spring training
facilities does not apply here.
In this instance, the revenue generated by the bonds must also meet the test of
125.0104(5Xa)1., F.S., which states that funds may be used to "acquire, construct, extend,
enlarge, remodel, repair, improve" 5 types of capital projects that are publicly owned and
operated (convention centers, sports stadiums, sports arenas, coliseums, auditoriums) and one
that is publicly owned and operated or owned and operated by not -for profit organizations and
open to the public (museums). In another situation involving 125.0104(5xa)l. funds, the
Attorney General opined that tourist development taxes could not be used for a sports stadium or
arena that was owned and operated by a non-profit corporation, let alone for -profit companies.
AGO 96-54 (tourist development fimds could not be used for the Gainesville Raceway, which
was owned and operated by a non-profit corporation).
None of the elements in the Proposal is described as a convention center, sports stadium,
sports arena, coliseum or auditorium (or museum). Even if some of the elements were re -cast to
fall within these categories,14 to the extent that tourist development taxes were pledged as
security for revenue bonds, the funds would need to be used exclusively for elements that were
publicly owned and operated — not owned by the City of Key West and operated by MSM under
contract to the City of Key West. The Proposal states very clearly that MSM will operate not
only the marina, but the entire waterfront area. (Proposal, p. 19: "We intend to operate and
maintain a first-class marina facility and waterfront recreation area and provide exceptional
service."; Proposal, p. 21: "We fully intend to operate all parts of the business to include marina
operations as well as food, beverage, and entertainment.") The Power Point presentation
materials also state: "In our vision, Meisel & Spottswood will undertake the design, construction
and management of the Harry S Truman Presidential Park & Marina on behalf of the City of Key
West.').
13 As noted above, Section 125.0104(5xc), F.S. states that revenue bonds may only be issued for the
purposes listed in subsection (5xa)1. through 4. Because subsection (5)(b) is not included, the statutory
language does not allow the issuance of revenue bonds to finance zoological parks, fishing piers and
nature centers.
14 The only element that appears to even arguably fall within the list would be the "ellipse event
grounds", if it were re -construed to be a coliseum. However, according to Development Costs (Proposal,
Schedule D, p. 90), the projected cost of this element is only 9.0% of the cost of the total. At the very
least, the tourist development taxes could not be pledged to secure revenue bonds for the remainder of the
project Even then, it would not qualify for funding as long as it was privately operated.
9
As long as the project will be privately operated, Monroe County tourist development
taxes cannot be used as security for revenue bonds for the project.
5. Conflict of interest
It is my understanding that MSM has advised that the law firm of Bryant, Miller & Olive,
P.A. ("Bryant, Miller') is acting on behalf of MSM and has prepared legal opinions regarding
the issuance of revenue bonds. The County has not been provided with a copy of any such
opinion.
The County has previously retained Bryant, Miller to act as the County's attorney with
respect to affordable and workforce housing issues, including revenue sources, and as disclosure
counsel for airport bonds. It is also my understanding that MSM has stated that the firm will
request that the County waive any conflict of interest.
Rule 4-1.7 of the Florida Rules of Professional Conduct prohibits an attorney from
representing a client of the representation will be directly adverse to another client, unless each
affected client gives informed consent, confirmed in writing or clearly stated at a hearing.15 The
Comment to the Rule states: "On the other hand, simultaneous representation in unrelated
matters whose interests are only generally adverse, such as competing economic enterprises,
does not require consent of the respective clients."
Here, it is difficult to tell whether there is a conflict or not. Issuance of revenue bonds for
marina projects and affordable or workforce housing or airport bonds may be unrelated. On
balance, the firm probably requires the County's waiver. At the very least, the firm would be
well advised to get the waiver to make sure the issue will not arise in the future.
Paragraph 4(a) of the retainer agreement states that the parties understand that Bryant,
Miller may in the future serve as bond counsel or disclosure counsel to other municipalities and
other local government entities in the County; that the firm's role as bond counsel or disclosure
counsel was not likely to cause a conflict of interest; and that the firm's service to the other
governmental entities as bond counsel or disclosure counsel would not per se constitute a conflict
of interest. One way or the other, Paragraph 4(a) does not already operate as a waiver, for three
reasons. The language is not a waiver — at most, an agreement that a conflict will not be treated
as a conflict per se (instead, would be evaluated on its facts). Second, courts dislike blanket
prospective conflict of interest waivers. Third, the paragraph only mentions that the firm may
serve as counsel for other governmental entities — not private firms. Therefore, Bryant, Miller
will need a separate waiver, unless it terminates the retainer agreement with the County, which it
may do on 30 day's written notice.
6. Precedent
is The other requirements are: (1) the lawyer must believe that he will be able to provide competent
representation to both clients; (2) the representation must not be prohibited bylaw; and (3) the
representation must not involve the assertion of a position adverse to another client in the same
proceeding before a tribunal.
10
One Commissioner has asked whether use of the funds would set a precedent for other
uses or projects. To the best of my knowledge, no tourist development taxes have ever been
used either as a pledge for revenue bonds in general or to pay debt service on bonds. Therefore,
the answer is yes.
11
Summary
The City of Key West can build and operate its Marina and Upland Development
Opportunity for the Truman Waterfront using other revenue sources, including the loan
mentioned in the Proposal as an alternative. However:
• The authority to issue revenue bonds using tourist development tax dollars is
strictly limited to counties, not cities.
• Neither the City nor the County could pledge the tax revenues under discussion
(one-half of the fourth penny) in order to issue revenue bonds, because none of
the elements of the project — as currently described in MSM's Proposal— is on the
strict (and short) list of items contained in Section 125.0104(5xa)1. that could be
built with the revenue — a convention center, sports stadium, sports arena,
coliseum, auditorium, and museum.
• Even if the project to be built contained one or more of these items, revenue
bonds (which could only be issued by the County) could only be used to finance
the portion of the project containing these items — not other items not on the
statutory list. (For example, the bonds could only be used to finance a coliseum,
and not a marina, a park, or a promenade.)
• The taxes could not be used as security for the bonds unless the project was both
publicly owned and operated; the MSM Proposal calls for public ownership by
the City of Key West but private operation by MSM.
• And finally, the ultimate Catch 22: Retirement of the bonds will not cause the
ordinance allowing the County to collect all tourist development taxes to expire as
long as the bonds are not used for any of the capital projects listed in Section
125.0104(5xa)1.. However, if any portion of the taxes were used to secure
revenue bonds issued to finance any of the capital projects in Section
125.0104(5Xa)1., then the entire ordinance would expire when the bonds were
retired, and the County would lose its ability to collect any tourist development
taxes, anywhere in the County. A new referendum would be required to pass a
new ordinance.
12
Attachment B
Dear Roman and Suzanne:
As you know, the City is working on the plans to improve the Truman Waterfront
property acquired from the U. S. Navy in 2003. On September 15, 2009, the City
Commission accepted a proposal (#08-011) from Meisel & Spottswood Marina
Management Company, LLC to develop a marina and upland supporting structures, and
additional development of a large upland open space park area providing including
enhancements that will attract residents and visitors to a world class waterfront park
venue.
The proposed project is a multi -purpose development that will showcase the historic
Truman Waterfront in a manner that is designed to grow and sustain the recreational
opportunities of our community.
The developers, Meisel & Spottswood, are requesting consideration by the County to
approve the pledge of a portion of the I % high tourism impact tax revenue to facilitate
project funding. This option requires a thorough review by the County Tourist
Development Council and the County Commisison (TDC) approval.,
There are questions and concerns regarding the appropriateness of the requested use of
the high tourism impact tax revenue for this purpose. In order to address this issue, I
believe it is appropriate to for the County to request an Opinion from the Attorney
General of Florida. In support of this, attached you will find a draft letter and supporting
documents for your consideration.
We look forward to working with you and your staff to move this proposal forward and
to making this world class waterfront park a reality.
Jim Scholl
Att:
[Proposed Text of Agenda Memorandum for Monroe County Board of County
Commissioners]
From: County Administrator
To: Board of County Commissioners
Re: Request for Authorization to Request an Opinion of Attorney General Regarding
Use of High Tourism Impact Tax Revenues for Historic Truman Waterfront
On September 15, 2009, the City Commission of the City of Key West ("City"), in its
capacity as the Naval Properties Local Redevelopment Authority, unanimously
approved the award of Request for Proposal #108-011 for the Truman Waterfront to
Meisel & Spottswood Marina Management Company, LLC ("MSM°). This action was
approved as Resolution 09-249 in the minutes of the September lVh meeting of the
City.
The Historic Truman Waterfront project is a multi -purpose sports, entertainment and
cultural complex proposed and designed to grow and sustain the tourism industry in the
Florida Keys. The Historic Truman Waterfront will include
professionally planned venues for holding and promoting tourist related events,
concerts and festivals - such as the Key West Offshore Powerboat Races, the Sailboat
Races, the Taste of Key West, and the many fishing tournaments held in Key West
each year. In addition to enhancing these existing events and promoting additional
similar tourist related events, the Historic Truman Waterfront will enhance the visitor
experience in Key West on a daily basis through the implementation of the cultural and
zoological aspects of the project. The zoological aspects of the Historic Truman
Waterfront will be created through incorporation of the existing NOAA Eco-Discovery
Center into the fabric of the project and the creation of a new Turtle Hospital Facility on
the grounds. The cultural aspects of the Historic Truman Waterfront will be carried out
through the creation of a new Museum and Exhibition Hall on the grounds dedicated to
the history of Key West and the Florida Keys, including its maritime and naval history,
and will highlight Fort Zachary Taylor which is located just at the back of the property.
More particularly, the City and MSM envision that the key components of the Historic
Truman Waterfront project will consist of the following:
(a) Construction of a world class waterfront sports stadium featuring marina
and spectator facilities positioned to attract and support competitive racers from
103388170
around the world as they compete in Monroe County's world-renowned
powerboat and sailboat races as well as tournament fishing vessels. The sports
stadium and marina will be designed to also attract and support fishing and
sports vessels and yachts from around the world and to provide a future
gateway for travel to and from other Caribbean destinations.
(b) Construction of an amphitheater and associated grounds for concerts,
festivals, sporting events, and other tourist -related activities;
(c) Remodeling, repair, and improvement of an existing 14,000 square foot
mufti -purpose building to be utilized as a naval and maritime museum and
exhibition hall;
(d) Development of a zoological park and nature center, including facilities
of the acclaimed Turtle Hospital;
(e) Improvement and construction of beach park facilities and beach areas,
including connections between the facilities on the subject property and the
existing public beach facilities located at Fort Zachary Taylor, and
(f) Restoration and repair of the shoreline along the project property,
including the repair of the existing seawall and construction of a new wave
attenuation wall.
It is anticipated that the County Commission will be requested by the City and MSM to
take several actions relative to approval of the Historic Truman Waterfront project,
including the potential issuance of bonds to support the construction, operation, and
maintenance of the project to be supported by a pledge of certain of the High Tourism
Impact Tax Revenues. Consistent with prior practice in this area of the Irv, the County
Administrator recommends that the County seek the opinion of the Attorney General to
confirm the appropriateness of the use of the funds for such purposes and to confirm
the appropriateness of a potential amendment to the high tourism impact tax ordinance
to avoid potential expiration of the ordinance. The approval of this request does not
signify approval of the issuance of the bonds or any other aspect of the project, but
does provide an important foundation for the County's processing of such requests.
The questions presented to the Attorney General will be substantially similar to the
following:
A. Whether Monroe County may utilize High Tourism Impact Tax Revenues for the
construction, operation, maintenance and repair of the facilities comprising the Historic
Truman Waterfront.
B. Whether the Board of County Commissioners of Monroe County is authorized to
amend the County's High Tourism Impact Tax Ordinance to make dear that such
ordinance will not automatically expire upon retirement of any bonds issued by the
County to finance the construction, operation, maintenance and repair of the facilities
comprising the Historic Truman Waterfront.
103MI70
The County Administrator requests Board approval for the County Administrator to draft
the formal request for an opinion of the Attorney General, including with the request the
memorandum of law provided by the City from Baker & Hostetler LLP.
103388170
Proposed Letter to Attorney General from County Administrator
[Monroe County Letterhead]
[Date]
Attorney General
Department of Legal Affairs
The Capitol PL01
Tallahassee, FL 32399-1050
Re: Request for Opinion of the Attorney General; Use of High Tourism Impact Tax
Revenues; Historic Truman Waterfront Project in Key West, Florida
Dear General McCollum:
Pursuant to Section 16.01(3), Florida Statutes, the Monroe County Board of County
Commissioners hereby requests that your office provide an Attorney General Opinion
on the following questions:
Whether Monroe County may utilize the revenues derived from Monroe
County's high tourism impact tax pursuant to Ordinance 004-2009,
effective June 1, 2009 ("High Tourism Impact Tax Ordinance") for the
construction, operation, maintenance and repair of the facilities
comprising the Historic Truman Waterfront.
Whether the Board of County Commissioners of Monroe County is
authorized to amend the County's High Tourism Impact Tax Ordinance
to make clear that such ordinance will not automatically expire upon
retirement of any bonds issued by the County to finance the
construction, operation, maintenance and repair of the facilities
comprising the Historic Truman Waterfront.
Enclosed herewith is a memorandum of law prepared by Baker & Hostetler,
LLP addressing the questions presented.
Additionally, this letter confirms that the undersigned has received the approval of a
majority of the members of the Monroe County Board of County Commissioners to
request this Attorney General Opinion.
.s
Should you have any questions, or if 1 can be of any assistance as you review these
materials, please do not hesitate to call.
Very truly yours,
103413950
[DRAFT MEMORANDUM TO THE ATTORNEY GENERAL OF FLORIDA ADDRESSING
QUESTIONS PROPOSED TO BE ASKED TO THE ATTORNEY GENERAL BY THE MONROE
COUNTY BOARD OF COUNTY COMMISSIONERS]
Baker Hostetler
TO: Office of the Attorney General of Florida Bill
McCollum
FROM: Robert Gebaide, Baker & Hostetler LLP
DATE: June .2010
SUBJECT. Monroe County Board of County Commissioners Request for
Opinion of the Attorney General of Florida; Use of High Tourism
Impact Tax Revenues for Proposed Historic Truman Waterfront
Project
MEMORANDUM OF LAW
INTRODUCTION
On September 15, 2009, the City Commission of the City of Key West ("City"), in its capacity as
the Naval Properties Local Redevelopment Authority, unanimously approved the award of
Request for Proposal #08-011 for the Truman Waterfront to Meisel & Spottswood Marina
Management Company, LLC ("MSM"). This action was approved as Resolution 09-249 in the
minutes of the September le meeting of the City.
The Historic Truman Waterfront project is a multi -purpose sports, entertainment and cultural
complex proposed and designed to grow and sustain the tourism industry in the Florida Keys.
The Historic Truman Waterfront will include professionally planned venues for holding and
promoting tourist related events, races, concerts and festivals - such as the Key West Offshore
Powerboat Races, the Sailboat Races, the Taste of Key West, and the many fishing
tournaments held in Key West each year. In addition to enhancing these existing events and
promoting additional similar tourist related events, the Historic Truman Waterfront will enhance
the visitor experience in Key West on a daily basis through the implementation of the cultural
and zoological aspects of the project. The zoological aspects of the Historic Truman Waterfront
will be created through incorporation of the existing NOAA Eco-Discovery Center into the fabric
of the project and the creation of a new Turtle Hospital facility on the grounds. The cultural
aspects of the Historic Truman Waterfront will be carried out through the creation of a new
Museum and Exhibition Hall on the grounds dedicated to the history of Key West and the
Florida Keys, including its maritime and naval history, and will highlight Fort Zachary
Taylor which is located just at the back of the property.
More particularly, the City and MSM envision that the principal elements of the Historic Truman
Waterfront project will consist of the following:
(a) Construction of a world class waterfront sports stadium featuring marina and
spectator facilities positioned to attract and support competitive racers from around the
world as they compete in Monroe County's world-renowned powerboat and sailboat
races as well as tournament fishing vessels. The sports stadium and marina will be
designed to also attract and support fishing and sports vessels and yachts from around
the world and to provide a future gateway for travel to and from other Caribbean
destinations.
(b) Construction of an amphitheater and associated grounds for concerts, festivals,
sporting events, and other tourist -related activities;
(c) Remodeling, repair, and improvement of an existing 14,000 square foot multi-
purpose building to be utilized as a naval and maritime museum and exhibition hall;
(d) Development of a zoological park and nature center, including facilities of the
acclaimed Turtle Hospital;
(e) Improvement and construction of beach park facilities and beach areas, including
connections between the facilities on the subject property and the existing public beach
facilities located at Fort Zachary Taylor, and
(f) Restoration and repair of the shoreline along the project property, including the
repair of the existing seawall and construction of a new wave attenuation wall.
The City and MSM intend to execute a lease pursuant to which MSM, which has been
determined by the City to have sufficient expertise and financial capability to operate the Historic
Truman Waterfront, will construct the Historic Truman Waterfront and, upon completion, operate
the facility on behalf of the City. The City has proposed that Monroe County ("County") fund
construction, operation, and maintenance of the Historic Truman Waterfront through the
issuance of bonds which will be supported by a pledge by the County of a portion of the
revenues derived from the County's one percent (1 %) high tourism impact tax levied pursuant to
Ordinance 004-2009, effective June 1, 2009 ("High Tourism Impact Tax Ordinance°). Only
those revenues derived from the High Tourism Impact Tax Ordinance ("High Tourism Impact
Tax Revenues") which are collected within the City of Key West, Florida will be pledged in
support of the Historic Truman Waterfront.
II. QUESTIONS PRESENTED
A. Use of Hioh Tourism Impact Tax Revenues. Whether Monroe County may utilize High
Tourism Impact Tax Revenues for the construction, operation, maintenance and repair of the
facilities comprising the Historic Truman Waterfront.
B. Expiration of the County's Hiah Tourism Impact Tax Ordinance. Whether the Board of
County Commissioners of Monroe County is authorized to amend the County's High Tourism
Impact Tax Ordinance to make clear that such ordinance will not automatically expire upon
retirement of any bonds issued by the County to finance the construction, operation,
maintenance and repair of the facilities comprising the Historic Truman Waterfront.
Ill. BRIEF CONCLUSIONS
A. Use of Hiah Tourism Impact Tax Revenues. Upon a legislative finding by the Board of
County Commissioners of Monroe County that the Historic Truman Waterfront is primarily for
the purpose of and related to the advancement, furtherance, improvement or promotion of
tourism, the County may finance the construction, operation, maintenance and repair of the
Historic Truman Waterfront with High Tourism Impact Tax Revenues.
B. Expiration of the CounWs Hiah Tourism Impact Tax Ordinance. The Board of County
Commissioners of Monroe County may amend the High Impact Tourism Tax Ordinance to
provide that the ordinance shall continue in effect notwithstanding the retirement of any or all
bonds issued for the acquisition, construction, extension, enlargement, remodeling, repair or
improvement of a publicly owned and operated convention center, sports stadium, sports arena,
coliseum, or auditorium, or a museum that is publicly owned and operated or owned and
operated by a not -for -profit organization or upon the expiration of any agreement by the County
for the operation or maintenance of such uses. The High Impact Tourism Tax Ordinance will
not automatically expire upon the retirement of any bonds issued by the County to support the
construction, operation, maintenance and repair of the Historic Truman Waterfront provided that
the County amends the High Tourism Impact Tax Ordinance in such a manner.
IV. FACTUAL UNDERSTANDING
The Historic Truman Waterfront will be a tourist -related complex designed and maintained
primarily for the purpose of furthering the advancement, improvement, and promotion of tourism
in the City and the County by (i) showcasing the City's significant historical story, its
contributions to the development of the early America's from the 1800's through today, and the
City's extraordinary naval and maritime history; (ii) advertising and promoting tourist -related
activities in the City and the County; and (III) attracting tourists from around the world to the
Historic Truman Waterfront to attend or participate in the powerboat racing, sailboat racing,
tournament and recreational fishing, maritime exhibitions, diving, and other water -dependent
sporting activifies to be showcased at the Historic Truman Waterfront.
The Historic Truman Waterfront will be publicly owned and will be open to the public. MSM will
not be the owner of the project and its activities in the project will be limited to project design,
development, construction, and management activities pursuant to a lease and management
agreement with the City. With regard to MSM's management activities, we are of the
understanding that such activities will be incidental to the project as a whole and should not
deprive the Historic Truman Waterfront of its public character or detract from the fact that it
primarily serves a public purpose. See State of Florida v. Osceola County, 752 So.2d. 530 (Fla.
1999).
MSM and the City propose that the County issue bonds that will generate immediately available
funds adequate to support completion of construction of the facilities included within the Historic
Truman Waterfront project and provide additional funds related to the operation, repair,
replacement and improvement of such facilities. Such bonds will be secured by the County's
pledge of a portion of the High Tourism Impact Tax Revenues toward the repayment of such
bonds. It is initially anticipated that all or a portion of the one percent (1%) High Tourism Impact
Tax collected within District 1 (Key West) will be pledged to support the issuance of such bonds.
V. GENERAL DISCUSSION OF APPLICABLE LAW; ANALYSIS; AND CONCLUSIONS
A. Use of High Tourism Impact Tax Revenues.
(i) General Discussion of Applicable Law. Section 125.0104, Florida Statutes,
known as the Local Option Tourist Development Act, authorizes a county to impose a tax on
short-term rentals of living quarters or accommodations within the county. The purpose and
Intent of Section 125.0104, Florida Statutes, is to "provide for the advancement, generation,
growth and promotion of tourism, the enhancement of the tourist industry, and the attraction of
conventioneers and tourists from within and without the state to a particular area or county of
the state." See Ops. Atty Gen. Fla. 2000-15 (2000), 95-71 (1995), 94-12 (1994), 87-16 (1987),
and 83-18 (1983).
Pursuant to Section 125.0104(3)(m), Florida Statutes, the County, which has been certified as a
high tourism impact county, levied an additional one percent tax on the consideration charged
for transient rental transactions within the County. The High Tourism Impact Tax Ordinance
was enacted by an extraordinary vote of the Board of County Commissioners of Monroe County
and made effective June 1, 2009. Section 23-200(a), Monroe County Code, authorizes the use
of the High Tourism Impact Tax Revenues for the following purposes:
a) To acquire, construct, extend, enlarge, remodel, repair, improve, maintain,
operate, or promote one or more publicly owned and operated convention
centers, sports stadiums, sports arenas, coliseums, or auditoriums within the
boundaries of the county or subcounty special taxing district in which the tax
is levied.
b) To acquire, construct, extend, enlarge, remodel, repair, improve, maintain,
operate, or promote one (1) or more museums, zoological parks, fishing
piers, or nature centers which are owned and operated by not -for -profit
organlzations and open to the public. However, these purposes may be
implemented through service contracts and leases with lessees with sufficient
expertise or financial capability to operate such facilities.
c) To fund convention bureaus, tourist bureaus, tourist information centers, and
news bureaus as county agencies or by contract with the chambers of
commerce or similar associations in the county, which may include any
indirect administrative costs for services performed by the county on behalf of
the promotion agency.
d) To finance beach improvement, maintenance, renourishment, restoration,
and erosion control.
e) To finance fishing piers.
f) To advertise and promote the district and/or the county within domestic and
international markets.
g) To promote county festivals, tournaments, races and other tourist -related
activities.
h) To promote county tourist -oriented cultural, events such as visual and
performing arts, including, but not limited to theater, concerts, recitals, opera,
dance and art exhibitions.
In addition to the listed authorized uses, the final recital to the ordinance states that nit is
desirable to put into place at this time an additional one cent tourism tax in order to provide
additional revenue for any of the acceptable purposes listed under Section 125.0104(5), Florida
Statutes °
The Attorney General's Office has issued several opinions on the appropriateness of the use of
tourist development taxes to fund certain proposed projects or activities. In AGO 83-18, the
Attorney General of Florida laid out the following guiding principles for the review of such
questions, which principles have been recited to some extent in all subsequent opinions of the
Attorney General:
From the whole context of the Local Option Tourist Development Act, Section
125.0104, Florida Statutes, and in light of all the foregoing definitions, I am of the
opinion that the intent and purpose of the act was to provide for the
advancement, generation, growth and promotion of tourism, the enhancement of
the tourist industry, and the attraction of conventioneers and tourists from within
and without the state to a particular area or county of the state. I am accordingly
of the opinion that the acquisition, construction, maintenance, operation, or
promotion and financing of the several publicly owned and operated facilities
enumerated in Section 125.0104(5)(a), supra must be primarily for the purpose
of and related to the advancement, furtherance, improvement or promotion of
tourism. The determination whether a particular facility or project. tourist
listed in your first question meet these requirements and are primarily for the
purpose of furthering, improving, and promoting tourism, then the revenues
derived from the local tourist development tax may be property expended for
such purposes so long as they also fall within the purview of the authorized uses
enumerated in Section 125.0104(5), Florida Statutes. (Emphasis added).
(ii) Analysis. The Historic Truman Waterfront is conceived and designed to address
the peculiar and prevailing conditions and needs of the County. The County, a State -
designated Area of Critical Concern, is known worldwide for the multitude of water -dependent
recreational and sport activities that it offers tourists. Key West, in particular, is the home of
some of the most prestigious tournaments and races in the world including, without limitation,
the Key West Offshore Powerboat World Championships; the Acura Key West sailboat races;
the World Sailfish Championships; the Key West Fishing Tournament; and Yamaha Dolphin
Masters Invitational. These events presently draw tens of thousands of visitors to the City and
the County each year. In fact, the Key West Offshore Powerboat World Championships is one
of the premier tourist events in the County as evidenced by historic tourist development tax
collections. The Truman Waterfront property, as the present location for many of the activities
related to these existing events, is keenly situated to provide the location for the new facilities
envisioned to advance and promote both the existing events as well as newly anticipated
tournaments, races, boating exhibitions, concerts, and other similarly situated tourist activities.
In further support of the need for such facilities, the "Poker Run" offshore racing event, one of
the largest of its kind, recently had challenges in securing preferred dockage in Key West to
accommodate the participants.
Given our understanding of the facts and the support expected at the County level, we
anticipate that the Monroe County Board of County Commissioners would make the factual
determination, upon appropriate legislative findings and due consideration of the County's
peculiar and prevailing conditions and needs, that the Historic Truman Waterfront project is
tourist related and furthers such primary purpose. Accordingly, in accordance with the Attorney
General's prior guidance, if the subject project receives the County's support and is primarily for
the purpose of furthering, improving, and promoting tourism, then the revenues derived from the
local tourist development tax may be property expended for such purposes so long as they also
fall within the purview of the authorized uses enumerated in Section 125.0104(5), Florida
Statutes (as implemented by the County).
By its nature, the Historic Truman Waterfront project is proposed as a single, integrated project.
Nonetheless, in order to confirm that the County's expenditure of the funds for the Historic
Truman Waterfront is authorized under Section 125.0104(5), Florida Statutes, we believe it is
appropriate to address each of the key components of the project individually, consistent with
the manner in which the Attorney General has reviewed other similar questions:
(a) Construction of a world class waterfront sports stadium featuring marina
and spectator facilities positioned to attract and support competitors from around the world as
they compete in Monroe County's world-renowned powerboat and sailboat races as well as
tournament fishing tournaments. The sports stadium and marina facilities will be designed to
attract and support fishing and sports vessels and yachts from around the world and to provide
a future gateway for travel to and from other Caribbean destinations.
The Attorney General has not addressed directly whether a waterfront sports stadium and
associated marine facilities of the nature proposed for the Historic Truman Waterfront is a
permissible use of High Tourism Impact Tax Revenues, and such uses are not specifically listed
in Section 23-200(ax2), Monroe County Code. In AGO 83-18, the Attorney General was
presented with a litany of questions, including, whether use of the tourist development tax
revenues for the following purposes was appropriate: (i) a multi -purpose building to be utilized
as a convention center and exhibition hall was an appropriate use of funds; (ii) a horse show
arena, together with stables; (iii) a softball tournament center, (iv) a tennis and aquatic center,
and (v) a multi -purpose field.
The manner in which the Attorney General reviewed each of these questions has guided all
subsequent opinions on the issue of the appropriateness of the use of local tourism tax
revenues; therefore, AGO 83-18 will be referenced in several locations throughout this
Memorandum. In AGO 83-18, the Attorney General considered whether the construction of a
horse show arena and stables were an appropriate use of the tourist development tax revenues.
Utilizing the commonly understood definitions of the key terms of the statute, the Attorney
General found the use appropriate as follows:
A 'show' is an exhibit or display or a presentation or performance as a public
entertainment or spectacle. The Random House Dictionary, supra, at 1320. A
'horse show' is defined as 'a competitive exhibition of horses and vehicles
especially as an annual fashionable event' Webster's supra, at 1093. An 'arena'
is defined as 'a central area or open space within an enclosure used for public
entertainment ... a building containing an arena used especially for indoor
sports,' id. at 115, and as 'a platform, ring, area or the like, used for sports or
other forms of entertainment, surrounded by seats for spectators,' The Random
House Dictionary, supra at 79. See also. Webster's, su ra, at 443 defining
'coliseum,' in part, as a large building designed to hold many spectators or
activities, as a basketball game or horse show.
In light of the above definitions, it is my opinion that a horse show arena would
fall within the purview of the term 'sports arena' as used in Section
125.0104(5)(a)1., Florida Statutes. Therefore, it is my opinion that a horse show
arena and its accessory or auxiliary bams or stables designed and promoted
primarily for the advancement, improvement and promotion of tourism may be
financed with the proceeds derived from the local tourist development tax.
Given our understanding of the Historic Truman Waterfront project, it would appear that the
marina facilities which are a part of the larger sports stadium complex are analogous to the
auxiliary bams and stables discussed in AGO 83-18. Just as horses must be stabled, the
watercraft participating in the sought after tournaments, races, and shows require dockage
facilities of the type, nature, and quality commensurate with the events in which they are
participating. Appropriate dockage facilities are simply an integral part of the overall proposed
waterfront sports stadium and are required in order to be able to fully realize the ability of the
Historic Truman Waterfront to attract and promote tourism to the Historic Truman Waterfront
and to Key West, in general. Furthermore, it is our understanding that participants and
promoters of certain desired races have historically raised concerns relative to the lack of
available dockage in Key West required to support proposed races, and that this project would
directly address this issue and provide the City with a better opportunity to advance this key
area of tourism.
Furthermore, AGO 83-18 specifically provides that "authorized uses of the tourist development
tax include, inter aliathe construction of sports stadiums, sports arenas, and coliseums. The
term 'sport' is defined by the Random House Dictionary, supra, at 1375, as an athletic activity
requiring skill or physical prowess and often of a competition nature, as racing, baseball, tennis,
golf, bowling, wrestling, boxing, hunting, fishing, etc. ... a diversion: recreation: pleasant
pastime. The term 'stadium' is defined by Webster's supra, at 2218, as a large, usually
unroofed, structure with tiers of seats for spectators built in various shapes and enclosing a field
usually for sports events (as baseball, football, track and field), and by The Random House
Dictionary, supra. at 1382, as 'a sports arena ... with tiers of seats for spectators.' The term
'coliseum' is defined by Webster's supra. at 443, as a large building designed to hold many
spectators or activities calling for a good deal of room (as a basketball game or horse show): a
large assembly hall: stadium, and by The Random House Dictionary, supra, at 289, as an
amphitheater, stadium, large theater, or the like, for public meetings, sports, exhibitions, etc."
Additionally, we note that in AGO 97-48, the Attorney General considered whether a county was
authorized to use tourist development tax dollars to construct an artificial reef to provide diving
and snorkeling opportunities in waters bordering the county. In this instance, the county
proposed to construct an artificial reef or reefs within coastal waters bordering the county to
afford diving and snorkeling activities during the summer months. It was concluded in that
opinion that "based upon the appropriate legislative finding by the governing body of the county
that such a project promotes tourism, construction of an artificial reef in order to promote
snorkeling and diving or as a basis for improving fishing in the coastal waters to attract tourists
may be funded by tourist development tax revenues collected pursuant to Section 125.0104,
Florida Statutes." Using a similar analogy, upon the requisite and expected factual finding by the
County, it would be anticipated that the construction of marina facilities as part of the complete
waterfront sports stadium project would necessarily afford tourists improved fishing, diving, and
other water -dependent activity opportunities, all of which would attract tourists and, with the'
County's finding that such a project promotes tourism, could be appropriately funded by tourist
development tax revenues. Of local note, the County, in an inter -local agreement more
particularly discussed below, has similarly approved the use of tourist development tax
revenues to construct an artificial reef through the sinking of the USS Gen. H.S. Vandenberg.
We note that in AGO 91-62, the Attorney General concluded that Section 125.0104(5)(a)(1),
Florida Statutes (1990) did not contemplate artificial structures (such as boat ramps and related
parking facilities) or other activities that did not protect or enhance the physical nature of the
beach. The Attorney General acknowledged that Section 125.0104(5)(a)1, Florida Statutes,
specifically contemplated the creation of artificial structures, such as publically owned and
operated convention centers, sports stadiums, sports arenas, coliseums and auditoriums, but
found that boat ramps and parking facilities were not included in the list of permitted artificial
structures. However, in 1997 (subsequent to AGO 91-62), the Florida legislature amended
Section 125.0104(5)(a)4, Florida Statutes, to specifically authorize the use of tourist
development tax revenues to finance "beach park facilities." While there have not been any
Attorney General Opinions that specifically define or analyze the term "beach park facilities", it
would be reasonable to assume that the addition of such term was to permit the use of tourist
development tax revenues for beach -related artificial structures. In fact, in AGO 2010-09, the
Attorney General was careful to qualify certain prior opinions as having been issued prior to the
1997 amendment.
In light of the above, it would appear that construction of the above -described waterfront sports
stadium and related facilities fit the definition of the terms 'sports stadium, sports arenas,
oofiseums', and therefore falls within the purview of the authorized used enumerated in Section
23-200(a)(2), Monroe County Code and Section 125.0104(5), Florida Statutes. As such, the
Attorney General should find that the construction, operation, maintenance and repair of the
waterfront sports stadium and related facilities may be financed with High Tourism Impact Tax
Revenues provided that the Board of County Commissioners of Monroe County determines that
the Historic Truman Waterfront and the waterfront sports stadium and related facilities are
primarily for the purpose of and related to the advancement, furtherance, improvement or
promotion of tourism, and such determination is founded upon appropriate legislative findings
and due consideration of the peculiar and prevailing local conditions and needs.
(b) Construction of an amphitheater and associated grounds for concerts,
festivals, sporting events, and other tourist -related activities.
Amphitheaters are not listed specifically in Section 23-200(a)(2), Monroe County Code;
however, the Attorney General's statements in AGO 83-18 are again relevant to the subject
question. In AGO 83-18, , the Attorney General responded to the question of whether
development of a softball tournament center was an appropriate use of tourist development tax
revenues. On this question, the Attorney General noted the following:
authorized uses of the tourist development tax include, inter alia, the construction
of sports stadiums, sports arenas, and coliseums. The term 'sport' is defined by
the Random House Dictionary, suvra, at 1375, as an athletic activity requiring
skill or physical prowess and often of a competition nature, as racing, baseball,
tennis, golf, bowling, wrestling, boxing, hunting, fishing, etc.... a diversion:
recreation: pleasant pastime. The tenn 'stadium' is defined by Webster's supra,
at 2218, as a large, usually unroofed, structure with tiers of seats for spectators
built in various shapes and enclosing a field usually for sports events (as
baseball, football, track and field), and by The Random House Dictionary, supra,
at 1382, as 'a sports arena ... with tiers of seats for spectators.' The term
'coliseum' is defined by Webster's supra, at 443, as a large building designed to
hold many spectators or activities calling for a good deal of room (as a basketball
game or horse show): a large assembly hall: stadium, and by The Random
House Dictionary, supra, at 289, as an amphitheater, stadium, large theater, or
the like, for public meetings, sports, exhibitions, etc. (Emphasis added).
In addition to this express recognition of an amphitheater use falling within the definition of
coliseum, the Attorney General also advised in AGO 83-18 that "a multi -purpose field or stadium
designed and promoted primarily for the advancement, improvement and promotion of tourism
may be financed with the proceeds from the local tourist development tax." We are of the
understanding that the amphitheater grounds are planned to be designed and developed as
multi -use facilities such that they will provide spectator facilities for the amphitheater and serve
as sporting fields for the national sports tournaments which draw tourists and participants to Key
West each year.
In light of the Attorney General's finding that the definition of °coliseum° includes an
amphitheater, it would appear that the proposed amphitheater and related grounds fit within the
authorized uses enumerated in Section 125.0104(5) Florida Statutes, and Section 23-
200(a)(2)(a), Monroe County Code. As such, the Attorney General should find that the
construction, operation, maintenance and repair of the amphitheater and related grounds may
be financed with. High Tourism Impact Tax Revenues provided that the Board of County
Commissioners of Monroe County determines that the Historic Truman Waterfront and the
amphitheater and related grounds are primarily for the purpose of and related to the
advancement, furtherance, improvement or promotion of tourism, and such determination is
founded upon appropriate legislative findings and due consideration of the peculiar and
prevailing local conditions and needs.
(c) Remodeling, repalr, and improvement of a multi -purpose building to be
utilized as a naval and maritime museum and exhibition hall.
Section 23-200(a)(2)(b), Monroe County Code, expressly authorizes the use of the tax revenues
to acquire, construct, extend, enlarge, remodel, repair, improve, maintain, operate, or promote
one (1) or more museums, zoological parks, fishing piers, or nature centers which are owned
and operated by not -for -profit organizations and open to the public.
Furthermore, in AGO 83-18, the Attorney General advised that:
conventional wisdom and common experience tell us that convention facilities
and 'civic centers' are commonly used for such things as concerts, tradeshows,
circuses and other exhibitions and performances. A multi -purpose building used
as a place for meetings of conventions and exhibitions as defined above would,
in my opinion, fall within the scope of the term 'convention centers' as used in s
125.0104(5)(a)1., F.S. I therefore conclude that such a building or project
designed and maintained primarily for the purpose of furthering the
advancement, improvement and promotion of tourism may be funded from the
local tourist development tax revenues.
In light of the specific reference to museums in the Monroe County Code and Section
125.0104(5), Florida Statutes, the Attorney General should find that the remodeling, repair, and
improvement of the multi -purpose building, which will include a museum and exhibition hall, may
be financed with High Tourism Impact Tax Revenues provided that the Board of County
Commissioners of Monroe County determines that the Historic Truman Waterfront and the
museum and exhibition hall are primarily for the purpose of and related to the advancement,
furtherance, improvement or promotion of tourism, and such determination is founded upon
appropriate legislative findings and due consideration of the peculiar and prevailing local
conditions and needs.
(d) Development of a zoological nark and nature center, including facilities of
the acclaimed Turtle Hospital.
Environmental information and protection is a major focal point of the Historic Truman
Waterfront. To that end, the Historic Truman Waterfront will provide numerous eco-discovery
opportunities to visitors throughout the project so that they may learn about the marine life and
habitats unique to the Florida Keys. Among other projects, it is proposed that the Turtle
Hospital, which is highly acclaimed for its work with injured sea turtles and marine life, will
operate facilities located within the Historic Truman Waterfront.
Section 23-200(a)(2)(b), Monroe County Code, expressly authorizes the use of the tax revenues
to acquire, construct, extend, enlarge, remodel, repalr, improve, maintain, operate, or promote
one (1) or more museums, zoological parks, fishing piers, or nature centers which are owned
and operated by not for-profd organizations and open to the public.
We note that Section 125.0.104(5)(c), Florida Statutes, provides that tourist development tax
revenues may be pledged to secure and liquidate revenue bonds for the purposes set forth in
subparagraphs (a)1 and (a)4 of Section 125.0104(5), Florida Statutes. Zoological parks are
described in subparagraph (aX1), while nature centers are not described in subparagraphs (a)1
or (a)4. Accordingly, to the extent that any of the proposed facilities are deemed solely "nature
center" as opposed to "zoological park' or other subparagraph (a)1 or (a)4 uses, it would appear
that tourist development tax revenues may not be pledged to secure and liquidate revenue
bonds for such "nature center uses.
Neither the Florida Statutes nor the Monroe County Code provide definitions for what type of
facility comprises a zoological park or nature center. The Attomey General in AGO 94-12,
utilizing the plain and ordinary definitions of "nature" (the aspect of the outdoors (as a
landscape), natural scenery) and "center" (a point around which things revolve: a focal point for
attraction, concentration or activity) found that it appeared that tourist development tax revenues
could be used to acquire property for a nature trail or preserve open to the public. Additionally,
in AGO 97-48, the Attorney General found that an aquatic nature center that develops as a
natural or planned consequence of constructing artificial reefs could be characterized as a
nature center. Webster's Ninth New Collegiate Dictionary defines "zoological garden" as a
garden or park where wild animals are kept for exhibition.
In light of the specific reference to zoological parks and nature centers in the Monroe County
Code and Section 125.0104(5), Florida Statutes, the Attorney General should find that the
County may use the High Tourism Impact Tax Revenues to develop the proposed facilities,
provided that the Board of County Commissioners of Monroe County determines that the
Historic Truman Waterfront and the proposed facilities are primarily for the purpose of and
related to the advancement, furtherance, improvement or promotion of tourism, and such
determination is founded upon appropriate legislative findings and due consideration of the
peculiar and prevailing local conditions and needs. To the extent, however, that any such
facilities are deemed a nature center and not a zoological park, High Tourism Impact Tax
Revenues may not be pledged to secure and liquidate bonds for purposes related to the nature
center. As the Turtle Hospital involves the keeping of wild animals for exhibition and medical
care, and not open and outdoor nature preserves, it would appear that the Turtle Hospital use
would more closely fall within the definition of "zoological park" than the definition of "nature
center."
(a) Improvement and construction of beach park facilities and beach areas,
including connections between the facilities on the subject property and the existina public
beach facilities located at Fort Zachary Tavlor.
Section 23-200(a)(2xd), Monroe County Code, expressly authorizes the use of the funds to
finance beach improvement, maintenance, renourishment, restoration, and erosion control. As
noted above, the final recital of Ordinance 004-2009 which authorized the High Tourism Impact
Tax stated that "it is desirable to put into place at this time an additional one cent tourism tax in
order to provide additional revenue for any of the acceptable purposes listed under Section
125.0104(5), Florida Statutes." Section 125.0104(5)(a)4 expressly authorizes the use of such
funds to finance beach park facilities in addition to those uses set forth in Section 23-200(a)(2).
The County has previously acknowledged the appropriateness of the use of such funds to
finance beach park facilities in the first recital of that certain Inter -Local Agreement between
Monroe County and the City of Key West dated October 18, 2006 related to the sinking of the
USS Gen. H.S. Vandenberg.
We note that there were -several historic opinions of the Attorney General which did not look
favorably upon the use of tourist development tax revenues for development of beach park
facilities; however, we note that these opinions predated the amendment of Section
125.0104(5)(a)4, Florida Statutes, in 1997 to specifically include beach park facilities. The
impact of the statutory amendments were recently acknowledged by the Attorney General in
Opinion 2010-09.
Accordingly, in light of the foregoing, the Attorney General should find that the aforementioned
beach improvements and facilities may be financed with High Tourism Impact Tax Revenues
provided that the Board of County Commissioners of Monroe County determines that the
Historic Truman Waterfront and the beach improvements and facilities are primarily for the
purpose of and related to the advancement, furtherance, improvement or promotion of tourism,
and such determination is founded upon appropriate legislative findings and due consideration
of the peculiar and prevailing local conditions and needs.
(f) Restoration and repair of the shoreline along the proiect property,
including the repair of the existing seawall and construction of a new wave attenuation wall.
Section 23-200(a)(2)(d), Monroe County Code, and Section 125.0104(5), Florida Statutes,
expressly authorizes the use of the funds to finance beach improvement, maintenance,
renourishment, restoration, and erosion control.
Accordingly, the Attorney General should find that the maintenance and restoration of the
existing seawall and the construction of a new wave attenuation wall to minimize erosion and to
provide protection to the project and the watercraft utilizing the seawall and wave attenuation
wall may be financed with High Tourism Impact Tax Revenues provided that the Board of
County Commissioners of Monroe County determines that the Historic Truman Waterfront and
the maintenance and restoration of the existing seawall and the construction of a new wave
attenuation wall are primarily for the purpose of and related to the advancement, furtherance,
improvement or promotion of tourism, and such determination is founded upon appropriate
legislative findings and due consideration of the peculiar and prevailing local conditions and
needs:
In light of the above analysis, the Attorney General should find that the Historic Truman
Waterfront project, including all of the separately described components when constructed as
part of the overall project, properly falls within the purview of the terms 'sports stadium, sports
arenas, coliseums' as used in Section 23-200(a)(2), Monroe County Code and Section
125.0104(5), Florida Statutes. As such, the Attorney General should find that the County may
finance the construction, operation, maintenance and repair of the Historic Truman Waterfront
with High Tourism Impact Tax Revenues provided that the Board of County Commissioners of
Monroe County determines that the Historic Truman Waterfront is primarily for the purpose of
and related to the advancement, furtherance, improvement or promotion of tourism, and such
determination is founded upon appropriate legislative findings and due consideration of the
peculiar and prevailing local conditions and needs.
B. Expiration of the Countv's High Tourism Impact Tax Ordinance.
(i) General Discussion of Applicable Law. Pursuant to the Local Option Tourist
Development Act, an ordinance levying and imposing a tourist development tax is subject to
automatic expiration under certain circumstances. In particular, Section 125.0104(7), Florida
Statutes, provides that:
Anything in this section [Section 125.0104, Florida Statutes] to the contrary
notwithstanding, if the plan for tourist development approved by the governing
board of the county, as amended from time to time pursuant to paragraph (4)(d)
[Section 125.0104, Florida Statutes], includes the acquisition, construction,
extension, enlargement, remodeling, repair, or improvement of a publicly owned
and operated convention center, sports stadium, sports arena, coliseum, or
auditorium, or a museum that is publicly owned and operated or owned and
operated by a not -for -profit organization, the county ordinance levying and
imposing the tax shall automatically expire upon the later of:
(a) Retirement of all bonds issued by the county for financing the same; or
(b) The expiration of any agreement by the county for the operation or
maintenance, or both, of a publicly owned and operated convention center,
sports stadium, sports arena, coliseum, auditorium, or museum. However,
nothing herein shall preclude that county from amending the ordinance
extending the tax to the extent that the board of the county determines to be
necessary to provide funds with which to operate, maintain, repair, or renew and
replace a publicly owned and operated convention center, sports stadium, sports
arena, coliseum, auditorium, or museum or from enacting an ordinance which
shall take effect without referendum approval, unless the original referendum
required ordinance expiration, pursuant to the provisions of this section re-
imposing a tourist development tax, upon or following the expiration of the
previous ordinance.
(ii) Analysis. For those high tourism Impact taxes enacted for the sole purpose of
constructing a single stadium or convention center, Section 125.104(7), Florida Statutes,
logically operates to provide for the expiration of the ordinance levying the high tourism impact
tax upon retirement of the associated bonds. We note that Section 125.104(7), Florida Statutes,
also addresses the expiration of the tourism tax ordinance based on the operation and
maintenance agreements; however, we have limited our discussion solely to the retirement of
bonds for purposes of this memorandum. In the instant case, however, the County's High
Tourism Impact Tax Ordinance was enacted, for the purpose of funding multiple uses which are
more particularly addressed in the adopted tourism development plan. As such, It is anticipated
that the County will utilize a portion of the High Tourism Impact Tax Revenues for the funding of
the Historic Truman Waterfront project and the remainder of such revenues would be utilized in
support of other authorized and approved uses throughout the County.
Section 125.104(7), Florida Statutes, which provides for the expiration of the tourism tax
ordinance upon the retirement of the bonds issued to finance the acquisition, construction,
extension, enlargement, remodeling, repair, or improvement of a publicly owned and operated
convention center, sports stadium, sports arena, coliseum, or auditorium, or a museum
(collectively, the "Expiration Uses', does not distinguish between tourism development plans
which utilize all of the revenues for Expiration Uses and those tourist development plans which
utilize only portion of the revenues for such purposes. Accordingly, for those counties that
adopt a tourism development plan that encompasses multiple projects, including any of the
Expiration Uses, Section 125.104(7), Florida Statutes, may result in the expiration of the High
Tourism Impact Tax Ordinance upon the retirement of the bonds associated with a single
component of the plan. Such a result appears to be wholly inconsistent with the Intent of the
High Tourism Impact Tax Ordinance and the County's tourism development plan which
contemplates the perpetual funding of multiple projects deemed appropriate by the County
through the collection of the High Tourism Impact Tax Revenues.
The Attorney General addressed the issue of automatic expiration of a tourist development tax
ordinance pursuant to Section 125.0104(7), Florida Statutes, in AGO 2000-56. In this opinion,
St. Johns County Inquired whether its use of a portion of its tourist development tax revenues to
pay debt service on a county -owned convention center would act to terminate the tourist
development tax upon retirement of the bonds sold to finance the construction of the same. The
Attorney General, after confirming that the St. Johns County tourist development plan included a
provision permitting the use of tourist development tax revenues to fund the Expiration Uses,
opined that "[Qn light of the inclusion of the language relating to the acquisition and construction
of 'publically owned leisure/recreational activities & facilities' in the tourist development plan ...
, the use of tourist development tax funds to pay debt service on the county -owned convention
center may well implicate Section 125.0104(7), Florida Statutes. Under these circumstances,
the county may wish to consider other sources for these payments rather than jeopardize the
continued validity of the tourist development tax." (Emphasis added).
We note that in AGO 2000-56 the Attorney General used the phrase "may well implicate Section
125.0104(7), Florida Statutes" in malting his conclusion. While we cannot be sure of the
reason for this indefinite type of language, one could infer that the Attorney General was
concerned about the illogical result that would be occasioned by a more definite opinion. A
more definite opinion by the Attorney General would have effectively nullified a county's High
Tourism Impact Tax and the comprehensive tourist development plan solely because a portion
of the tourist development tax revenues were utilized to retire debt associated with just one
component of the plan.
Similar to St. Johns County, the County's tourist development plan is a comprehensive plan
that, among many other approved uses, includes the Expiration Uses. It is contemplated that
the County will pledge a portion of the revenues derived from the High Tourism Development
Tax to secure bonds for the construction, operation, maintenance and repair of the Historic
Truman Waterfront (which we can assume includes uses that are Expiration Uses as defined in
this memorandum). Accordingly, although we do not believe that the provisions of Section
125.0104(7), Florida Statutes, were intended to result in the expiration of the County's High
Tourism Impact Tax Ordinance upon the retirement of bonds issued by the County related to the
Historic Truman Waterfront (or any one of the potential other benefitted projects), it would be
advisable for the County to amend the High Tourism Impact Tax Ordinance to eliminate the
potential for such an illogical result in the present situation.
Section 125.0104(7), Florida Statutes, specifically authorizes the County to amend the High
Tourism Impact Tax ordinance to extend the tax to the extent deemed necessary by the County
to provide funds to operate, maintain, repair, renew or replace such Expiration Uses. As the
County will be considering several approvals related to the Historic Truman Waterfront project
(including budgeting and bond approvals), we would recommend that the County consider
ordinance amendments in conjunction with such approvals so that a unified approval package
may be presented. Except for language specifically addressing the expiration issue, no further
amendments to the High Tourism Impact Tax Ordinance are required. To that end, we would
recommend that language similar to the following be considered for inclusion within the County
ordinance:
Neither the retirement of any bonds issued by the County to finance the
acquisition, construction, extension, enlargement, remodeling, repair, or
Improvement of a publicly owned and operated convention center, sports
stadium, sports arena, coliseum, or auditorium, or a museum nor the expiration
of any agreements by the County for the operation or maintenance of any such
uses will result In the expiration of this ordinance levying and imposing the High
Tourism Impact Tax. It is the intent of this section that, notwithstanding anything
in Section 125.0104(7), Florida Statutes, to the contrary, the continued collection
of the High Tourism Impact Tax is necessary to provide for the operation,
maintenance, repair, renewal, or replacement of a publicly owned and operated
convention center, sports stadium, sports arena, coliseum, auditorium, or
museum and shall continue to be collected until such time that the County
determines, by further amendment to this ordinance, that such funds are no
longer necessary for such purposes.
Accordingly, the High Impact Tourism Tax Ordinance will not automatically expire upon the
retirement of any bonds issued to support the construction, operation, maintenance and repair
of the Historic Truman Waterfront provided that the County amends the ordinance as outlined
above.
I OU39438
Attachment C
OFFICE OF THE CITY ATTORNEY
THE CITY OF KEY WEST
POST OFFICE BOX 1409
KEY WEST, FL 33041-1409
WWW.KEYWESTCITY.COM
October 18, 2010
Attorney General
Department of Legal Affairs
The Capitol PL01
Tallahassee, FL 32399-1050
Via Federal Express
PHONE: (305) 809-3770
FAX: (305) 809-3771
Re: Request for Opinion of the Attorney General; Use of High Tourism Impact Tax
Revenues; Historic Truman Waterfront Project in Key West, Florida
Dear Attorney General McCollum:
Pursuant to Section 16.01(3), Florida Statutes, the Key West City Commission hereby
requests that your office provide an Attorney General Opinion on the following questions:
Whether the revenues that are dedicated to the City of Key West and
which are derived from Monroe County's high tourism impact tax pursuant
to Ordinance 004-2009, effective June 1, 2009 ("High Tourism Impact Tax
Ordinance") may be utilized for the construction, operation, maintenance
and repair of the facilities comprising the Historic Truman Waterfront.
Whether the High Tourism Impact Tax Ordinance will automatically expire
upon retirement of any bonds issued by the County to finance the
construction, operation, maintenance and repair of the facilities
comprising the Historic Truman Waterfront if such ordinance is not
amended.
Enclosed herewith is a memorandum of law setting forth this office's legal analysis of the
questions presented.
Additionally, this letter confirms that the undersigned has received the approval of a
majority of the members of the City Commission of the City of Key West to request this
Attorney General Opinion. A majority of members of the Monroe County Board of County
Commissioners also previously expressed the desire that the Key West City
Commission request the opinion rather than the County given that the City is the
beneficiary of the funding at issue.
We appreciate your consideration of these issues. Should you have any questions, or if
I can be of any assistance as you review these materials, please do not hesitate to call.
Sincerely,
Shawn D. Smith
Key West City Attorney
MEMORANDUM OF LAW
TO: Office of the Attorney General of Florida,
Honorable Bill McCollum
FROM: Shawn D. Smith
Key West City Attorney
DATE: October 18, 2010
SUBJECT: Request for Opinion of the Attorney General; Use of High Tourism
Impact Tax Revenues for Proposed Historic Truman Waterfront
Project
INTRODUCTION
On September 15, 2009, the City Commission of the City of Key West ("City"), in its capacity as
the Naval Properties Local Redevelopment Authority, unanimously approved the award of
Request for Proposal #08-011 for the Truman Waterfront to Meisel & Spottswood Marina
Management Company, LLC ("MSM"). This action was approved as Resolution 09-249 in the
minutes of the September 151h meeting of the City.
The Historic Truman Waterfront project is a multi -purpose sports, entertainment and cultural
complex proposed and designed to grow and sustain the tourism industry in the Florida Keys.
The Historic Truman Waterfront will include professionally planned venues for holding and
promoting tourist related events, concerts and festivals - such as the Key West Offshore
Powerboat Races, the Sailboat Races, Taste of Key West, The Women's Flag Football
Tournament and the many fishing tournaments held in Key West each year. In addition to
enhancing these existing events and promoting additional similar tourist related events, the
intent of the Historic Truman Waterfront is to enhance the visitor experience in Key West on a
daily basis through the implementation of the cultural and zoological aspects of the project. The
zoological aspects of the Historic Truman Waterfront will be created through incorporation of the
existing NOAA Eco-Discovery Center into the fabric of the project and the creation of a new
Turtle Hospital Facility on the grounds. The cultural aspects of the Historic Truman Waterfront
will be carried out through the creation of a new Museum and Exhibition Hall on the grounds
dedicated to the history of Key West and the Florida Keys, including its maritime and naval
history, and will highlight Fort Zachary Taylor which is located just at the back of the property.
More particularly, the City and MSM envision that the key components of the Historic Truman
Waterfront project will consist of the following:
(a) Construction of an amphitheater and associated grounds for concerts, festivals,
sporting tournaments, and other tourist -related activities;
(b) Remodeling, repair, and improvement of an existing 14,000 square foot multi-
purpose building to be utilized as a naval and maritime museum and exhibition hall;
(c) Development of a zoological park and nature center, including facilities of the
acclaimed Turtle Hospital;
(d) Construction of a fishing pier;
(e) Improvement and construction of beach park facilities and beach areas, including
connections between the facilities on the subject property and the existing public beach
facilities located at Fort Zachary Taylor;
(f) Restoration and repair of the shoreline along the project property, including the
repair of the existing seawall and construction of a new wave attenuation wall; and
(9) Construction of a world class waterfront sports stadium featuring marina and
spectator facilities positioned to attract and support competitive racers from around the
world as they compete in Monroe County's world-renowned powerboat and sailboat
races as well as tournament fishing vessels. The sports stadium and marina will be
designed to also attract and support fishing and sports vessels and yachts from around
the world and to provide a future gateway for travel to and from other Caribbean
destinations.
The City and MSM intend to execute a lease or management agreement pursuant to which
MSM, which has been determined by the City to have sufficient expertise to operate the Historic
Truman Waterfront, will construct the Historic Truman Waterfront and, upon completion, operate
the facility on behalf of the City. The City has proposed that Monroe County ("County') fund
construction, operation, and maintenance of the Historic Truman Waterfront through the
issuance of bonds which will be supported by a pledge by the County of a portion of the
revenues derived from the County's one percent (1 %) high tourism impact tax levied pursuant to
Ordinance 004-2009, effective June 1, 2009 ("High Tourism Impact Tax Ordinance"). Only
those revenues derived from the High Tourism Impact Tax Ordinance ("High Tourism Impact
Tax Revenues") which are collected within the City of Key West, Florida will be pledged in
support of the Historic Truman Waterfront.
II. QUESTIONS PRESENTED
A. Use of High Tourism Impact Tax Revenues. Whether the revenues that are
provided to the City of Key West and which are derived from Monroe County's high
tourism impact tax pursuant to Ordinance 004-2009, effective June 1, 2009 ("High
Tourism Impact Tax Ordinance") may be utilized for the construction, operation,
maintenance and repair of the facilities comprising the Historic Truman Waterfront.
B. Expiration of the County's High Tourism Impact Tax Ordinance. Whether the
High Tourism Impact Tax Ordinance will automatically expire upon retirement of any
bonds issued by the County to finance the construction, operation, maintenance and
repair of the facilities comprising the Historic Truman Waterfront if such ordinance is not
amended.
Page 2 of 13
BRIEF CONCLUSIONS
A. Use of High Tourism Impact Tax Revenues. The use of High Tourism Impact Tax
Revenues dedicated to the City of Key West may be used to finance the construction, operation,
maintenance and repair of the Historic Truman Waterfront upon a legislative finding by the
Board of County Commissioners of Monroe County that the Historic Truman Waterfront is
primarily for the purpose of and related to the advancement, furtherance, improvement or
promotion of tourism.
B. Expiration of the County's High Tourism Impact Tax Ordinance. The Board of County
Commissioners may amend the High Impact Tourism Tax Ordinance to provide that the
ordinance shall continue in effect notwithstanding the retirement of any or all bonds issued for
the acquisition, construction, extension, enlargement, remodeling, repair or improvement of a
publicly owned and operated convention center, sports stadium, sports arena, coliseum, or
auditorium, or a museum that is publicly owned and operated or owned and operated by a not -
for -profit organization or upon the expiration of any agreement by the County for the operation
or maintenance of such uses. The High Impact Tourism Tax Ordinance will not automatically
expire upon the retirement of any bonds issued by the County to support the construction,
operation, maintenance and repair of the Historic Truman Waterfront provided that the County
amends the High Tourism Impact Tax Ordinance in such a manner.
IV. FACTUAL UNDERSTANDING
The Historic Truman Waterfront will be a tourist -related complex designed and maintained
primarily for the purpose of furthering the advancement, improvement, and promotion of tourism
in the City and the County by (i) showcasing the City's significant historical story, its
contributions to the development of the early America's from the 1800's through today, and the
City's extraordinary naval and maritime history; (ii) advertising and promoting tourist -related
activities in the City and the County; and (iii) attracting tourists from around the world to the
Historic Truman Waterfront to attend or participate in the powerboat racing, sailboat racing,
tournament and recreational fishing, maritime exhibitions, diving, and other water -dependent
sporting activities to be showcased at the Historic Truman Waterfront.
The Historic Truman Waterfront will be publicly owned and operated, and will be open to the
public. MSM will not be the owner of the project and its activities in the project will be limited to
project design, development, construction, and management activities pursuant to a
management agreement with the City. With regard to MSM's management activities, we are of
the understanding that such activities will be incidental to the project as a whole and should not
deprive the Historic Truman Waterfront of its public character or detract from the fact that it
primarily serves a public purpose. See State of Florida v. Osceola County, 752 So.2d. 530 (Fla.
1999).
MSM and the City propose that the County issue bonds that will generate immediately available
funds adequate to support completion of construction of the facilities included within the Historic
Truman Waterfront project and provide additional funds related to the operation, repair,
replacement and improvement of such facilities. Such bonds will be secured by the County's
pledge of a portion of the High Tourism Impact Tax Revenues toward the repayment of such
bonds. It is initially anticipated that all or a portion of the one percent (1%) High Tourism Impact
Tax collected within District 1 (Key West) will be pledged to support the issuance of such bonds.
Page 3 of 13
V. GENERAL DISCUSSION OF APPLICABLE LAW: ANALYSIS: AND CONCLUSIONS
A. Use of High Tourism Impact Tax Revenues.
(i) General Discussion of Applicable Law. Section 125.0104, Florida Statutes,
known as the Local Option Tourist Development Act, authorizes a county to impose a tax on
short-term rentals of living quarters or accommodations within the county. The purpose and
intent of Section 125.0104, Florida Statutes, is to "provide for the advancement, generation,
growth and promotion of tourism, the enhancement of the tourist industry, and the attraction of
conventioneers and tourists from within and without the state to a particular area or county of
the state. See Ops. Atfy Gen. Fla. 2000-15 (2000), 95-71 (1995), 94-12 (1994), 87-16 (1987),
and 83-18 (1983).
Pursuant to Section 125.0104(3)(m), Florida Statutes, the County, which has been certified as a
high tourism impact county, levied an additional one percent tax on the consideration charged
for transient rental transactions within the County. The High Tourism Impact Tax Ordinance
was enacted by an extraordinary vote of the Board of County Commissioners of Monroe County
and made effective June 1, 2009. Section 23-200(a), Monroe County Code, authorizes the use
of the High Tourism Impact Tax Revenues for the following purposes:
a) To acquire, construct, extend, enlarge, remodel, repair, improve, maintain,
operate, or promote one or more publicly owned and operated convention
centers, sports stadiums, sports arenas, coliseums, or auditoriums within the
boundaries of the county or subcounty special taxing district in which the tax
is levied.
b) To acquire, construct, extend, enlarge, remodel, repair, improve, maintain,
operate, or promote one (1) or more museums, zoological parks, fishing
piers, or nature centers which are owned and operated by not -for -profit
organizations and open to the public. However, these purposes may be
implemented through service contracts and leases with lessees with sufficient
expertise or financial capability to operate such facilities.
c) To fund convention bureaus, tourist bureaus, tourist information centers, and
news bureaus as county agencies or by contract with the chambers of
commerce or similar associations in the county, which may include any
indirect administrative costs for services performed by the county on behalf of
the promotion agency.
d) To finance beach improvement, maintenance, renourishment, restoration,
and erosion control.
e) To finance fishing piers.
f) To advertise and promote the district and/or the county within domestic and
international markets.
g) To promote county festivals, tournaments, races and other tourist -related
activities.
Page 4 of 13
h) To promote county tourist -oriented cultural events such as visual and
performing arts, including, but not limited to theater, concerts, recitals, opera,
dance and art exhibitions.
In addition to the listed authorized uses, the final recital to the ordinance states that "it is
desirable to put into place at this time an additional one cent tourism tax in order to provide
additional revenue for any of the acceptable purposes listed under Section 125.0104(5), Florida
Statutes:'
The Attorney General's Office has issued several opinions on the appropriateness of the use of
tourist development taxes to fund certain proposed projects or activities. In AGO 83-18, the
Attorney General of Florida laid out the following guiding principles for the review of such
questions, which principles have been recited to some extent in all subsequent opinions of the
Attorney General:
From the whole context of the Local Option Tourist Development Act, Section
125.0104, Florida Statutes, and in light of all the foregoing definitions, I am of the
opinion that the intent and purpose of the act was to provide for the
advancement, generation, growth and promotion of tourism, the enhancement of
the tourist industry, and the attraction of conventioneers and tourists from within
and without the state to a particular area or county of the state. I am accordingly
of the opinion that the acquisition, construction, maintenance, operation, or
promotion and financing of the several publicly owned and operated facilities
enumerated in Section 125.0104(5)(a), supra, must be primarily for the purpose
of and related to the advancement, furtherance, improvement or promotion of
tourism. The determination whether a particular facility or oroiect tourist
development plan or program is tourist related and furthers such primary purpose
is a factual determination which must be made by the legislative and governing
body of the county founded upon appropriate legislative findings and due
consideration of the peculiar and prevailing local conditions and needs• it is not a
determination which this office can make for a county. If the facilities and projects
listed in your first question meet these requirements and are primarily for the
purpose of furthering, improving, and promoting tourism, then the revenues
derived from the local tourist development tax may be properly expended for
such purposes so long as they also fall within the purview of the authorized uses
enumerated in Section 125.0104(5), Florida Statutes. (Emphasis added).
(ii) Analysis. The Historic Truman Waterfront is conceived and designed to address
the peculiar and prevailing conditions and needs of the City and County. The County, a State.
designated Area of Critical Concern, is known worldwide for the multitude of water -dependent
recreational and sport activities that it offers tourists. Key West, in particular, is the home of
some of the most prestigious tournaments and races in the world including, without limitation,
the Key West Offshore Powerboat World Championships; the Acura Key West sailboat races;
the World Sailfish Championships; the Key West Fishing Tournament; and Yamaha Dolphin
Masters Invitational. These events presently draw tens of thousands of visitors to the City and
the County each year. In fact, the Key West Offshore Powerboat World Championships is one
of the premier tourist events in the County as evidenced by historic tourist development tax
collections. The Truman Waterfront property, as the present location for many of the activities
related to these existing events, is keenly situated to provide the location for the new facilities
envisioned to advance and promote both the existing events as well as newly anticipated
tournaments, races, boating exhibitions, concerts, and other similarly situated tourist activities.
Page 5 of 13
In further support of the need for such facilities, the "Poker Run" offshore racing event, one of
the largest of its kind, recently had challenges in securing preferred dockage in Key West to
accommodate the participants.
Given our understanding of the facts and the support expected at the County level, we
anticipate that the Monroe County Board of County Commissioners would make the factual
determination, upon appropriate legislative findings and due consideration of the County's
peculiar and prevailing conditions and needs, that the Historic Truman Waterfront project is
tourist related and furthers such primary purpose. Accordingly, in accordance with the Attorney
General's prior guidance, if the subject project receives the County's support and is primarily for
the purpose of furthering, improving, and promoting tourism, then the revenues derived from the
local tourist development tax apportioned for the City of Key West may be properly expended
for such purposes so long as they also fall within the purview of the authorized uses
enumerated in Section 125.0104(5), Florida Statutes (as implemented by the County).
By its nature, the Historic Truman Waterfront project is proposed as a single, integrated project.
Nonetheless, in order to confirm that the County's expenditure of the funds for the Historic
Truman Waterfront is authorized under Section 125.0104(5), Florida Statutes, we believe it is
appropriate to address each of the key components of the project individually, consistent with
the manner in which the Attorney General has reviewed other similar questions:
(a) Construction of an amphitheater and associated grounds for concerts
festivals, sporting events, and other tourist -related activities.
Amphitheaters are not listed specifically in Section 23-200(a)(2), Monroe County Code;
however, in AGO 83-18, the Attorney General was presented with a litany of questions,
including, whether use of the tourist development tax revenues for the following purposes was
appropriate: (i) a mufti -purpose building to be utilized as a convention center and exhibition hall
was an appropriate use of funds; (ii) a horse show arena, together with stables; (iii) a softball
tournament center; (iv) a tennis and aquatic center; and (v) a multi -purpose field.
The manner in which the Attorney General reviewed each of these questions has guided all
subsequent opinions on the issue of the appropriateness of the use of local tourism tax
revenues; therefore, AGO 83-18 will be referenced in several locations throughout this
Memorandum. Of particular note relative to the construction of an amphitheater is the Attorney
General's response to the question of whether development of a softball tournament center was
an appropriate use of the funds. On this question, the Attorney General noted the following:
authorized uses of the tourist development tax include, inter alia, the construction
of sports stadiums, sports arenas, and coliseums. The term 'sport' is defined by
the Random House Dictionary, supra • at 1375, as an athletic activity requiring
skill or physical prowess and often of a competition nature, as racing, baseball,
tennis, golf, bowling, wrestling, boxing, hunting, fishing, etc.... a diversion:
recreation: pleasant pastime. The term 'stadium' is defined by Webster's supara.
at 2218, as a large, usually unroofed, structure with tiers of seats for spectators
built in various shapes and enclosing a field usually for sports events (as
baseball, football, track and field), and by The Random House Dictionary, sugra,
at 1382, as 'a sports arena ... with tiers of seats for spectators.' The term
'coliseum' is defined by Webster's supra, at 443, as a large building designed to
hold many spectators or activities calling for a good deal of room (as a basketball
game or horse show): a large assembly hall: stadium, and by The Random
Page 6 of 13
House Dictionary, suora, at 289, as an amphitheater. stadium, large theater, or
the like, for public meetings, sports, exhibitions, etc. (Emphasis added).
In the same opinion, the Attorney General also advised that "a multi -purpose field or stadium
designed and promoted primarily for the advancement, improvement and promotion of tourism
may be financed with the proceeds from the local tourist development tax."
We are of the understanding that the amphitheater grounds are planned to be developed such
that they will support sports tournaments such as the flag football tournaments which are held
each year in Key West. In fact, Key West hosts the most active tournament each year for the
International Women's Flag Football Association, the largest organization for women and girls in
the sport of flag football.
In light of the Attorney General's finding that the definition of "coliseum" includes an
amphitheater, an amphitheater should be considered to be a sports stadium, sports arena, or
coliseum as used in Section 125.0104(5) Florida Statutes, and Section 23-200(a)(2)(a), Monroe
County Code. Provided that the amphitheater is designed and promoted primarily for the
advancement, improvement and promotion of tourism, the amphitheater and associated
grounds may be financed with High Tourism Impact Tax Revenues.
(b) Remodeling repair, and improvement of a multi -purpose building to be
utilized as a naval and maritime museum and exhibition hall.
Section 23-200(a)(2)(b), Monroe County Code, expressly authorizes the use of the tax revenues
to acquire, construct, extend, enlarge, remodel, repair, improve, maintain, operate, or promote
one (1) or more museums, zoological parks, fishing piers, or nature centers which are owned
and operated by not -for -profit organizations and open to the public.
Furthermore, in AGO 83-18, the Attorney General advised that:
conventional wisdom and common experience tell us that convention facilities
and 'civic centers' are commonly used for such things as concerts, tradeshows,
circuses and other exhibitions and performances. A multi -purpose building used
as a place for meetings of conventions and exhibitions as defined above would,
in my opinion, fall within the scope of the term 'convention centers' as used in s
125.0104(5)(a)1., F.S. I therefore conclude that such a building or project
designed and maintained primarily for the purpose of furthering the
advancement, improvement and promotion of tourism may be funded from the
local tourist development tax revenues.
In light of the Monroe County Code's specific reference to museums, the multi -purpose building
which will include a museum and exhibition hall may be financed with High Tourism Impact Tax
Revenues provided that the multi -purpose building is designed and promoted primarily for the
advancement, improvement and promotion of tourism.
(c) Development of a zoological park and nature center.
Environmental information and protection is a major focal point of the Historic Truman
Waterfront. To that end, the Historic Truman Waterfront will provide numerous eco-discovery
opportunities to visitors throughout the project so that they may learn about the marine life and
habitats unique to the Florida Keys. Among other projects, it is proposed that the Turtle
Page 7 of 13
Hospital, which is highly acclaimed for its work with injured sea turtles and marine life, will
operate facilities located within the Historic Truman Waterfront.
Section 23-200(a)(2)(b), Monroe County Code, expressly authorizes the use of the tax revenues
to acquire, construct, extend, enlarge, remodel, repair, improve, maintain, operate, or promote
one (1) or more museums, zoological Barks, fishing piers, or nature centers which are owned
and operated by not -for -profit organizations and open to the public.
In light of the Monroe County Code's specific reference to zoological parks and nature centers,
the planned facilities may be financed with High Tourism Impact Tax Revenues provided that
they are designed and promoted primarily for the advancement, improvement and promotion of
tourism.
(d) Construction of a fishing pier.
Sections 23-200(a)(2)(b) and 23-200(a)(2)(e), Monroe County Code, expressly authorizes the
use of the funds to finance the construction and improvement of fishing piers.
In light of the Monroe County Code's specific reference to fishing piers, such facilities may be
financed with High Tourism Impact Tax Revenues provided that they are designed and
promoted primarily for the advancement, improvement and promotion of tourism.
(e) Improvement and construction of beach park facilities and beach areas
including connections between the facilities on the subiect property and the existing public
beach facilities located at Fort Zachary Taylor.
Section 23-200(a)(2)(d), Monroe County Code, expressly authorizes the use of the funds to
finance beach improvement, maintenance, renourishment, restoration, and erosion control. As
noted above, the final recital of Ordinance 004-2009 which authorized the High Tourism Impact
Tax stated that "it is desirable to put into place at this time an additional one cent tourism tax in
order to provide additional revenue for any of the acceptable purposes listed under Section
125.0104(5), Florida Statutes." Section 125.0104(5)(a)4 expressly authorizes the use of such
funds to finance beach park facilities in addition to those uses set forth in Section 23-200(a)(2).
The County has previously acknowledged the appropriateness of the use of such funds to
finance beach park facilities in the first recital of that certain Inter -Local Agreement between
Monroe County and the City of Key West dated October 18, 2006 related to the sinking of the
USS Gen. H.S. Vandenberg.
We note that there were several historic opinions of the Attorney General which did not look
favorably upon the use of tourist development tax revenues for development of beach park
facilities; however, we note that these opinions predated the amendment of Section
125.0104(5)(a)4, Florida Statutes, in 1997 to specifically include beach park facilities. The
impact of the statutory amendments were recently acknowledged by the Attorney General in
Opinion 2010-09.
Accordingly, in light of the foregoing, the aforementioned beach improvements and facilities may
be financed with High Tourism Impact Tax Revenues provided that they are designed and
promoted primarily for the advancement, improvement and promotion of tourism.
(f) Restoration and repair of the shoreline along the project property,
including the repair of the existing seawall and construction of a new wave attenuation wall.
Page 8 of 13
Section 23-200(a)(2)(d), Monroe County Code, expressly authorizes the use of the funds to
finance beach improvement, maintenance, renourishment, restoration, and erosion control.
Accordingly, the maintenance and restoration of the existing seawall and the construction of a
new wave attenuation wall to minimize erosion and to provide protection to the project and the
watercraft utilizing the seawall and wave attenuation wall may be financed with High Tourism
Impact Tax Revenues provided that such facilities are designed and promoted primarily for the
advancement, improvement and promotion of tourism.
(g) Construction of a world class waterfront sports stadium featuring marina
and spectator facilities positioned to attract and support competitors from around the world as
they compete in Monroe County's world-renowned powerboat and sailboat races as well as
tournament fishing tournaments. The sports stadium and marina facilities will be designed to
attract and support fishing and sports vessels and yachts from around the world and to provide
a future gateway for travel to and from other Caribbean destinations.
The Attorney General has not addressed directly whether a waterfront sports stadium and
associated marine facilities of the nature proposed for the Historic Truman Waterfront is a
permissible use of High Tourism Impact Tax Revenues. We believe, however, that the
reasoning used by the Attorney General in other cases is quite analogous to the instant
question. In AGO 83-18, the Attorney General considered whether the construction of a horse
show arena and stables were an appropriate use of the tourist development tax revenues.
Utilizing the commonly understood definitions of the key terms of the statute, the Attorney
General found the use appropriate as follows:
A 'show' is an exhibit or display or a presentation or performance as a public
entertainment or spectacle. The Random House Dictionary, supra. at 1320. A
'horse show' is defined as 'a competitive exhibition of horses and vehicles
especially as an annual fashionable event.' Webster's supra. at 1093. An 'arena'
is defined as 'a central area or open space within an enclosure used for public
entertainment ... a building containing an arena used especially for indoor
sports,' id. at 115, and as 'a platform, ring, area or the like, used for sports or
other forms of entertainment, surrounded by seats for spectators,' The Random
House Dictionary, supra, at 79. See also, Webster's, supra, at 443 defining
'coliseum,' in part, as a large building designed to hold many spectators or
activities, as a basketball game or horse show.
In light of the above definitions, it is my opinion that a horse show arena would
fall within the purview of the term 'sports arena' as used in Section
125.0104(5)(a)1., Florida Statutes. Therefore, it is my opinion that a horse show
arena and its accessory or auxiliary barns or stables designed and promoted
primarily for the advancement, improvement and promotion of tourism may be
financed with the proceeds derived from the local tourist development tax.
Given our understanding of the Historic Truman Waterfront project, it would appear that the
marina facilities which are a part of the larger complex are analogous to the auxiliary barns and
stables discussed in AGO 83-18. Just as horses must be stabled, the watercraft participating in
the sought after tournaments, races, and shows require dockage facilities of the type, nature,
and quality commensurate with the events in which they are participating. Appropriate dockage
facilities are simply an integral part of the overall proposed waterfront sports stadium and are
Page 9 01 13
required in order to be able to fully recognize the ability of the Historic Truman Waterfront to
attract and promote tourism to the Historic Truman Waterfront and to Key West, in general.
Furthermore, it is our understanding that certain desired races have raised concerns relative to
the Key West location as a result of the lack of available dockage required to support their
races.
Furthermore, AGO 83-18 specifically provides that "authorized uses of the tourist development
tax include, inter alia, the construction of sports stadiums, sports arenas, and coliseums. The
term 'sport' is defined by the Random House Dictionary, supra, at 1375, as an athletic activity
requiring skill or physical prowess and often of a competition nature, as racing, baseball, tennis,
golf, bowling, wrestling, boxing, hunting, fishing, etc... . a diversion: recreation: pleasant
pastime. The term 'stadium' is defined by Webster's supra, at 2218, as a large, usually
unroofed, structure with tiers of seats for spectators built in various shapes and enclosing a field
usually for sports events (as baseball, football, track and field), and by The Random House
Dictionary, supra, at 1382, as 'a sports arena ... with tiers of seats for spectators.' The term
'coliseum' is defined by Webster's supra at 443, as a large building designed to hold many
spectators or activities calling for a good deal of room (as a basketball game or horse show): a
large assembly hall: stadium, and by The Random House Dictionary, supra, at 289, as an
amphitheater, stadium, large theater, or the like, for public meetings, sports, exhibitions, etc."
Additionally, we note that in AGO 97-48, the Attorney General considered whether a county was
authorized to use tourist development tax dollars to construct an artificial reef to provide diving
and snorkeling opportunities in waters bordering the county. In this instance, the county
proposed to construct an artificial reef or reefs within coastal waters bordering the county to
afford diving and snorkeling activities during the summer months. It was concluded in that
opinion that "based upon the appropriate legislative finding by the governing body of the county
that such a project promotes tourism, construction of an artificial reef in order to promote
snorkeling and diving or as a basis for improving fishing in the coastal waters to attract tourists
may be funded by tourist development tax revenues collected pursuant to Section 125.0104,
Florida Statutes." Using a similar analogy, upon the requisite and expected factual finding by the
County, it would be anticipated that the construction of marina facilities as part of the complete
waterfront sports stadium project would necessarily afford tourists improved fishing, diving, and
other water -dependent activity opportunities, all of which would attract tourists and, with the
County's finding that such a project promotes tourism, could be appropriately funded by tourist
development tax revenues. Of local note, the County, in the above -referenced Inter -Local
Agreement, has similarly approved the use of tourist development tax revenues to construct an
artificial reef through the sinking of the USS Gen. H.S. Vandenberg.
We note that in AGO 91-62, the Attorney General concluded that Section 125.0104(5)(a)(1),
F.S. (1990) did not contemplate artificial structures (such as boat ramps and related parking
facilities) or other activities that did not protect or enhance the physical nature of the beach.
The Attorney General acknowledged that Section 125.0104(5)(a)1, F.S., specifically
contemplated the creation - of artificial structures, such as publically owned and operated
convention centers, sports stadiums, sports arenas, coliseums and auditoriums, but found that
boat ramps and parking facilities were not included in the list of permitted artificial structures.
However, in 1997 (subsequent to AGO 91-62), the Florida legislature amended Section
125.0104(5)(a)4, F.S. to specifically authorize the use of tourist development tax revenues to
finance "beach park facilities." While there have not been any Attorney General Opinions that
specifically define or analyze the term "beach park facilities", it would be reasonable to assume
that the addition of such term was to permit the use of tourist development tax revenues for
beach -related artificial structures. In fact, in AGO 2010-09, the Attorney General was careful to
Page 10 of 13
qualify certain prior opinions as to permitted uses as such opinions were issued prior to the
1997 amendment.
In light of the above, it would appear that the Historic Truman Waterfront project, including all of
the separately described components when constructed as part of the overall project, properly
falls within the purview of the terms 'sports stadium, sports arenas, coliseums' as used in Section
23-200(a)(2), Monroe County Code and Section 125.0104(5), Florida Statutes. As such, the
Historic Truman Waterfront may be financed with High Tourism Impact Tax Revenues provided
that such facilities are designed and promoted primarily for the advancement, improvement and
promotion of tourism. Accordingly, upon a legislative finding by the Board of County
Commissioners of Monroe County that the Historic Truman Waterfront, is primarily for the
purpose of and related to the advancement, furtherance, improvement or promotion of tourism,
the County may finance the construction, operation, maintenance and repair of the Historic
Truman Waterfront with High Tourism Impact Tax Revenues.
B. Expiration of the Countv's Hiah Tourism Impact Tax Ordinance.
(i) General Discussion of Applicable Law. Pursuant to the Local Option Tourist
Development Act, an ordinance levying and imposing a tourist development tax is subject to
automatic expiration under certain circumstances. In particular, Section 125.0104(7), Florida
Statutes, provides that:
Anything in this section [Section 125.0104, Florida Statutes] to the contrary
notwithstanding, N the plan for tourist development approved by the governing
board of the county, as amended from time to time pursuant to paragraph (4)(d)
[Section 125.0104, Florida Statutes], includes the acquisition, construction,
extension, enlargement, remodeling, repair, or improvement of a publicly owned
and operated convention center, sports stadium, sports arena, coliseum, or
auditorium, or a museum that is publicly owned and operated or owned and
operated by a not -for -profit organization, the county ordinance levying and
imposing the tax shall automatically expire upon the later of:
(a) Retirement of all bonds issued by the county for financing the same; or
(b) The expiration of any agreement by the county for the operation or
maintenance, or both, of a publicly owned and operated convention center,
sports stadium, sports arena, coliseum, auditorium, or museum. However,
nothing herein shall preclude that county from amending the ordinance
extending the tax to the extent that the board of the county determines to be
necessary to provide funds with which to operate, maintain, repair, or renew and
replace a publicly owned and operated convention center, sports stadium, sports
arena, coliseum, auditorium, or museum or from enacting an ordinance which
shall take effect without referendum approval, unless the original referendum
required ordinance expiration, pursuant to the provisions of this section re-
imposing a tourist development tax, upon or following the expiration of the
previous ordinance.
(ii) Analysis. For those high tourism impact taxes enacted for the sole purpose of
constructing a single stadium or convention center, Section 125.104(7), Florida Statutes,
logically operates to provide for the expiration of the ordinance levying the high tourism impact
tax upon retirement of the associated bonds. We note that Section 125.104(7), Florida Statutes,
Page 11 of 13
also addresses the expiration of the tourism tax ordinance based on the operation and
maintenance agreements; however, we have limited our discussion solely to the retirement of
bonds for purposes of this memorandum. In the instant case, however, the County's High
Tourism Impact Tax Ordinance was enacted, for the purpose of funding multiple uses which are
more particularly addressed in the adopted tourism development plan. As such, it is anticipated
that the County will utilize a portion of the High Tourism Impact Tax Revenues for the funding of
the Historic Truman Waterfront project and the remainder of such revenues would be utilized in
support of other authorized and approved uses throughout the County.
Section 125.104(7), Florida Statutes, which provides for the expiration of the tourism tax
ordinance upon the retirement of the bonds issued to finance the acquisition, construction,
extension, enlargement, remodeling, repair, or improvement of a publicly owned and operated
convention center, sports stadium, sports arena, coliseum, or auditorium, or a museum
(collectively, the "Expiration Uses"), does not distinguish between tourism development plans
which utilize all of the revenues for Expiration Uses and those tourist development plans which
utilize only portion of the revenues for such purposes. Accordingly, for those counties that
adopt a tourism development plan that encompasses multiple projects, including any of the
Expiration Uses, Section 125.104(7), Florida Statutes, may result in the expiration of the High
Tourism Impact Tax Ordinance upon the retirement of the bonds associated with a single
component of the plan. Such a result appears to be wholly inconsistent with the intent of the
High Tourism Impact Tax Ordinance and the County's tourism development plan which
contemplates the perpetual funding of multiple projects deemed appropriate by the County
through the collection of the High Tourism Impact Tax Revenues.
The Attorney General addressed the issue of automatic expiration of a tourist development tax
ordinance pursuant to Section 125.0104(7), Florida Statutes, in AGO 2000-56. In this opinion,
St. Johns County inquired whether its use of a portion of its tourist development tax revenues to
pay debt service on a county -owned convention center would act to terminate the tourist
development tax upon retirement of the bonds sold to finance the construction of the same. The
Attorney General, after confirming that the St. Johns County tourist development plan included a
provision permitting the use of tourist development tax revenues to fund the Expiration Uses,
opined that "[i]n light of the inclusion of the language relating to the acquisition and construction
of 'publically owned leisure/recreational activities & facilities' in the tourist development plan .. .
, the use of tourist development tax funds to pay debt service on the county -owned convention
center may well implicate Section 125.0104(7), Florida Statutes. Under these circumstances,
the county may wish to consider other sources for these payments rather than jeopardize the
continued validity of the tourist development tax." (Emphasis added).
We note that in AGO 2000-56 the Attorney General used the phrase "may well implicate Section
125.0104(7), Florida Statutes" in making his conclusion. While we cannot be sure of the
reason for this indefinite type of language, one could infer that the Attorney General was
concerned about the illogical result that would be occasioned by a more definite opinion. A
more definite opinion by the Attorney General would have effectively nullified a county's High
Tourism Impact Tax and the comprehensive tourist development plan solely because a portion
of the tourist development tax revenues were utilized to retire debt associated with just one
component of the plan.
Similar to St. Johns County, the County's tourist development plan is a comprehensive plan
that, among many other approved uses, includes the Expiration Uses. It is contemplated that
the County will pledge a portion of the revenues derived from the High Tourism Development
Tax to secure bonds for the construction, operation, maintenance and repair of the Historic
Page 12 o/ 13
Truman Waterfront (which we can assume includes uses that are Expiration Uses as defined in
this memorandum). Accordingly, although we do not believe that the provisions of Section
125.0104(7), Florida Statutes, were intended to result in the expiration of the County's High
Tourism Impact Tax Ordinance upon the retirement of bonds issued by the County related to the
Historic Truman Waterfront (or any one of the potential other benefitted projects), it would be
advisable for the County to amend the High Tourism Impact Tax Ordinance to eliminate the
potential for such an illogical result in the present situation.
Section 125.0104(7), Florida Statutes, specifically authorizes the County to amend the High
Tourism Impact Tax ordinance to extend the tax to the extent deemed necessary by the County
to provide funds to operate, maintain, repair, renew or replace such Expiration Uses. As the
County will be considering several approvals related to the Historic Truman Waterfront project
(including budgeting and bond approvals), we would recommend that the County consider
ordinance amendments in conjunction with such approvals so that a unified approval package
may be presented. Except for language specifically addressing the expiration issue, no further
amendments to the High Tourism Impact Tax Ordinance are required. To that end, we would
recommend that language similar to the following be considered for inclusion within the County
ordinance:
Neither the retirement of any bonds issued by the County to finance the
acquisition, construction, extension, enlargement, remodeling, repair, or
improvement of a publicly owned and operated convention center, sports
stadium, sports arena, coliseum, or auditorium, or a museum nor the expiration
of any agreements by the County for the operation or maintenance of any such
uses will result in the expiration of this ordinance levying and imposing the High
Tourism Impact Tax. It is the intent of this section that, notwithstanding anything
in Section 125.0104(7), Florida Statutes, to the contrary, the continued collection
of the High Tourism Impact Tax is necessary to provide for the operation,
maintenance, repair, renewal, or replacement of a publicly owned and operated
convention center, sports stadium, sports arena, coliseum, auditorium, or
museum and shall continue to be collected until such time that the County
determines, by further amendment to this ordinance, that such funds are no
longer necessary for such purposes.
Accordingly, the High Impact Tourism Tax Ordinance will not automatically expire upon the
retirement of any bonds issued to support the construction, operation, maintenance and repair
of the Historic Truman Waterfront provided that the County amends the ordinance as outlined
above.
Page 13 of 13
Attachment D
163
The Board discussed confirmation of the County Administrator's appointment of
Kevin G. Wilson to the position of Senior Director, Engineering & Project Management. The
following individuals addressed the Board: Kay Thacker and Burke Cannon. Roman Gastesi,
County Administrator discussed the matter. After discussion, motion was made by Mayor
Murphy and seconded by Commissioner DiGennaro granting approval of the appointment of
Kevin G. Wilson to the position of Senior Director, Engineering & Project Management. Roll
call vote was unanimous.
COUNTY ATTORNEY
Suzanne Hutton, County Attorney reported that when the Clerk's Auditors returned to the
Marathon Animal Shelter in order to obtain records for auditing purposes, the records had been
removed. Motion was made by Commissioner Wigington and seconded by Commissioner
DiGennaro authorizing the County Administrator and Public Works Director to take any
necessary emergency efforts necessary to make sure services are covered should the SUFA
employees walk off the job. Motion carried unanimously.
Ms. Hutton discussed a request from the Key West City Commission requesting 1.) The
Board of County Commissioners seek an opinion from the Florida Attorney General regarding
whether Monroe County may utilize High Tourism Impact Tax Revenues for the construction,
operation, maintenance and repairs of the facilities comprising Historic Truman Waterfront
project; and 2.) The Board of County Commissioners seek an opinion from the Florida Attorney
General regarding whether the Board of County Commissioners of Monroe County is authorized
to amend the County' s'High Tourism Tax Ordinance to make clear that such ordinance will not
automatically expire upon retirement of any bonds issued by the County to finance the
construction, operation, maintenance and repair of the facilities comprising the Historic Truman
Waterfront Project. After discussion, motion was made by Commissioner Carruthers and
seconded by Commissioner Wigington denying the request for an Attorney General's Opinion
and that the developer be encouraged to follow the normal channels - appear before the DAC and
TDC, including meeting the agenda deadline for the item to be heard in the Lower Keys where
the property is located. After consideration, the motion was withdrawn. No official action was
taken.
SOUNDING BOARD
Howard Gelbman addressed the Board in regards to — present information regarding the
creation of a 300 Acre Ocean Frontage, Key Largo Nature Preserve Park without the use of Ad
valorem Taxes for its purchase or operation. No official action was taken.
COUNTY ATTORNEY
Suzanne Hutton, County Attorney discussed an Agreement for Expert Witness Services
with Marr and Associates Appraisal Company, Inc. in connection with Emmerts v. Monroe
County v. Florida Department of Community Affairs (Circuit Court Case No. CAP-02-520) and
Collins, et. al. v. Monroe County v. State of Florida (Circuit Court Case No. CA-M-04-
OFFICE OF THE ATTORNEY GENERAL
Opinions Division
BILL McCOLLUM PL 01 The Capitol
ATTORNEY GENERAL Tallahassee, Florida 32399-1050
STATE OF FLORIDA Telephone (850) 245-0158
Fax (850) 922-3969
November 1, 2010
Mr. Shawn D. Smith
Key West City Attorney
Post Office Box 1409
Key West, Florida 33041-1409
Dear Mr. Smith:
This office has received your request of October 18, 2010, for an Attorney
General's Opinion dealing with the Local Option Tourist Development Act, section
125.0104, Florida Statutes. You have asked, on behalf of the City Commission of the
City of Key West and the Monroe County Commission, that this office address the use
of high tourism impact tax revenues for the Historic Truman Waterfront project.
As we discussed during our telephone conversation on October 29, 2010, this
office has been contacted by the Monroe County Attorney's Office affirmatively stating
that the county has not joined in any such opinion request. We have also received a
letter from the County Attorney to this effect and a copy is attached for your
consideration.
The provisions of section 125.0104, Florida Statutes, must be implemented
pursuant to a county ordinance and the expenditure of these funds is directed by a plan
developed by the county and set forth in that ordinance. Thus, any Attorney General's
Opinion on the use of these tax funds and the termination of the county ordinance
levying the tax, will necessarily require comment on the duties and responsibilities of
the county. While it is the case that the City of Key West is involved in developing the
Historic Truman Waterfront and is attempting to identify funding sources including the
high tourism impact tax, it is the policy of this office to only comment on the powers and
duties of a governmental entity at the request of that particular entity. Thus, any
Attorney General's Opinion on the validity of particular uses of the local option tourist
development tax as levied in section 125.0104, Florida Statutes, must include Monroe
County as a party to the request.
Mr. Shawn D. Smith
Page Two
I regret that we could not be of more direct assistance to you in this matter but
trust you will understand the inability of this office to proceed in the absence of a
request from the Monroe County Commission or their joining in your request.
Sincerely,
Gerry Hammond
Senior Assistant Attorney General
GH/srh
cc: �/IS. Suzanne A. Hutton
Monroe County Attorney
Enclosure: Policy Statement
Letter from Hutton of October 29, 2010
C
UNTY fo�MONROE
KEY WES>LORIDA 33040
(305)294-4641
Suzanne A. Hutton, County Attorney**
Robot B. Shillinger, Chief Assistant County Attorney
Pedro J. Mercado, Assistant County Attorney **
Susan M. Grimsley, Assistant County Attorney **
Natileene W. Cassel, Assistant County Attorney
Cynthia L. Hall, Assistant County Attorney
Christine Limbert-Barrows, Assistant County Attorney
Derek V. Howard, Assistant County Attorney
Lisa Granger, Assistant County Attorney
** Board Certified in City, County & Local Govt. Law
0 0 0 0 P "1 77
;-
4:4
October 29, 2010
Via e-mail: gerry.hammond@myfloridaleeal.com
Gerry Hammond, Esq.
Senior Assistant Attorney General
Department of Legal Affairs
The Capitol PLOT
Tallahassee, Florida 32399-1050
BOARD OF COUNTY COMMISSIONERS
Mayor Sylvia 3. Murphy, Dlsbict 5
Mayor Pro Tern Heather Camithers, District 3
Klm Wigington, District 1
George Neugent, District 2
Mario Di Gennaro, District 4
Office of the County Attorney
11I1 le Street, Suite 408
Key West, FL 33040
(305) 292-3470 — Phone
(305) 292-3516 — Fax
Re: Request for Opinion/Use of Tourist Development Taxes for Historic Truman Waterfront Project
Dear Ms. Hammond:
It has been represented to me that the City of Key West has stated that the Monroe County Board of County
Commissioners joined in the request for opinion contained in the City's letter to your office dated October 18,
2010. That is not the case. At its August 18, 2010 meeting, the Monroe County Board of County
Commissioners discussed a request by the City of Key West asking that the County request an Attorney
General's opinion on the use of tourist development taxes. In the meeting, the Commissioners discussed a
legal memorandum that had been generated by this office, a copy of which is attached. Although one of the
Commissioners initially moved to deny the City's request, the motion was withdrawn and no formal action
was taken. The relevant page from the official minutes of the Board of County Commissioners is also
attached.
That having been said, the City's request for opinion dated October 18, 2010 has never been reviewed by the
Monroe County Board of County Commissioners. If you would like further input from the County, please let
me know and I will obtain direction from the Commissioners. They do not meet again until November 17,
2010, so if you request that any official action be taken, I will need until that time to be able to provide
information on any action taken.
Please feel free to contact me should you have any further questions.
V-ry.truly
County Attorney