The city and the developer of Miami's large-scale Watson Island project won on appeal against a would-be competitor and three people who tried to invalidate the municipal lease for waterfront property where hotels and retail are set to rise.

The victory comes on the heels of a settlement between the city and developer Flagstone Island Gardens LLC over a plan that started 18 years ago.

The Third District Court of Appeal on Wednesday upheld a lower court order finding no standing for the residents and losing bidder. Their attorneys had no comment by deadline

The foursome were represented by Carlton Fields shareholder Richard Ovelmen, senior counsel Justin Wales and associate Dorothy Kafka as well as by Dubbin & Kravetz principal Samuel Dubbin.

The attorneys and their clients are discussing their next steps, which could be asking for a rehearing en banc or for review by the Florida Supreme Court, Dubbin said.

On the other side were the city attorney's office and Eugene Stearns, Maria Fehretdinov, Jason Koslowe and David Coulter of Stearns Weaver Miller Weissler Alhadeff & Sitterson in Miami.

The island with a stunning view of the downtown skyline and cruise ships docked at the Port of Miami is envisioned for a 305-room hotel with 105 timeshares; a 300-room hotel; 221,000 square feet of retail; and a 1,500-space parking garage that will be up to three stories high.

A 50-slip megayacht marina and restaurant are already open on the MacArthur Causeway island linking Miami and Miami Beach.

Flagstone Island Gardens, led by Mehmet Bayraktar, won a 2001 solicitation for development of 11 acres of land and 13.4 acres of submerged land in Biscayne Bay. City voters approved the project later that year.

The project stalled for years because of the Great Recession and financing issues, prompting the city to modify the submerged land lease in 2014 and the land lease in 2016.

Miami residents Francine Liebman, Jorge Mursuli and Daniel Suarez sued in 2017, and bidder Willy Bermello joined as a plaintiff in 2018.

Bermello was principal and president of BAP Development Inc., which was an equity participant in losing bidder Watson Island Partners LLC.

The foursome argued in Miami-Dade Circuit Court that the amended leases violated the city charter and sought declaratory and injunctive relief against the city. Flagstone backed the city in court.

Circuit Judge William Thomas in a March 2018 order sided with the city and Flagstone, which argued the residents and Bermello lacked standing.

Thomas shot down an argument by Liebman, Mursuli and Suarez that a 2016 city code change granted them standing. He also rejected Bermello's special injury argument that he would consider applying for the project if the city again solicited developers.

The appellate panel unanimously agreed with Thomas that the code amendment doesn't apply and Bermello's special injury claim failed because he only argued he would “consider” re-applying rather than committing to participate in another round.

“Such an allegation fails to provide anything more than a mere possibility, and is insufficient to meet the special injury requirement for standing purposes,” Chief District Judge Kevin Emas wrote for a unanimous panel. Judges Norma Lindsey and Bronwyn Miller concurred.

The panel also agreed with Thomas that the city code amendment didn't apply because it was approved after the city OK'd the lease modifications.

“The amendment contains no language of retroactivity, nor any indication that it was intended to be applied retroactively,” Emas wrote.

The city and Flagstone weren't always on the same team. Flagstone sued the city for suspending the development,and Thomas last year ruled in favor of Flagstone.

The two sides agreed to a $20 million settlement in May. If the case went to trial, Flagstone could have claimed nearly $200 million in damages.

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