Developer and Tow Company Spar

Beach Tow has operated illegally for decades, developer in land dispute says

Negotiations deteriorated, and Beach Towing allegedly asked for millions to settle dispute

After taking a mean turn, a legal battle between a developer and an infamous Miami Beach towing company is suddenly playing out like one of those nasty curbside spats from South Beach Tow.

Beach Towing, the company notorious for hooking up motorists’ vehicles under dubious circumstances and then charging a steep fee to return them, may have tangled with the wrong people. And now they may risk getting shut down for it.

The row isn’t over a tow, but the modus operandi sounds familiar: Beach Towing, which operates out of a former gas station in Miami Beach’s rapidly gentrifying Sunset Harbour neighborhood, is using an unusual deed restriction and its considerable political juice on the Beach to hold up a proposed residential and commercial development next door — and it won’t back down unless the developer forks over a substantial sum.

The developer, Deco Capital Group managing principal Bradley Colmer, would not say how much. But an investor in the project described the sum as “a multimillion-dollar payment.”

When a lawsuit and mediation failed to get Beach Towing and its owner Michael Festa to budge, Colmer went for the jugular. The developer’s lawyers have delivered a 14-page legal memo to city officials with a provocative conclusion: Beach Towing, it says, has been operating illegally for more than 30 years, and should be shut down. Immediately.

The legalese boils down to an allegedly blatant and long-running zoning violation by Beach Towing that’s gone unnoticed since at least 1984. The memo contends that the company never got permission from the city to operate a tow lot, and notes that zoning regulations for Sunset Harbor today bar that use of the property.

The memo, drafted by the firm of zoning uber-lawyer Jeffrey Bercow, landed with a big thud at City Hall, which has a contract with Beach Towing to enforce parking violations, and sent the company’s’ influential lobbyist into a dismissive rant.

Beach Towing attorney Ralph Andrade called the letter “absolute nonsense” and a “desperate attempt to strong-arm” the company.

“Once again, the developer, Deco Capital, is attempting to use the city as its private army to line their pockets at the expense of neighboring property owners and residents,” he told the Miami Herald. “The allegations contained in the letter are contrived and have no basis in the law or facts, and we trust the city manager and city attorney will swiftly reject it.”

On Thursday, City Manager Jimmy Morales and City Attorney Raul Aguila declined to comment because the Beach’s legal department is still reviewing the matter.

But one Sunset Harbour association officer said that most of her neighbors would be glad to see the neighborhood rid of Beach Towing. Like its Sunset Harbour neighbor, Tremont Towing — the company featured in the staged-reality South Beach Tow cable series — Beach Towing is seen in the neighborhood as a blight and noisy nuisance that no longer belongs there.

Residents complain of car alarms going off at night while under tow, of tow trucks lined up on Bay Road blocking traffic, and of disgruntled car owners hollering when they learn of the hefty fees they owe to get their cars back.

“If it were up to us, the neighbors, we would get rid of all the towing companies and put them on Terminal Island,” said Marilyn Freundlich, who lives in the townhomes on the north end of Sunset Harbour and is vice president of the neighborhood association. “They’re the worst neighbors ever.”

Both Beach Towing and Tremont have been vilified by residents and tourists who complain their wreckers prey on unsuspecting people who park illegally and quickly hop out of their cars for five-minute errands. And since there are just two licensed towers in town, the companies are seen as a duopoly with enough political power to keep city-approved rates high.

The Sunset Harbour tiff began last year, after Colmer and his partners, who include billionaire businessman Marc Rowan, paid $14 million for eight lots facing Maurice Gibb Memorial Park between Purdy Avenue and Bay Road. They unveiled plans to build a mixed-use project that would layer luxury condos over a parking deck and ground-level shops.

Three of the lots, it turns out, had been owned years back by Beach Towing. Before selling the lots in 2003, the company inserted a restriction in the deed, designed to prevent competition that bars the property from being used as a parking lot or storage yard, or for a garage or towing business.

Colmer says the restriction doesn’t apply because he intends to build a luxury project with only the amount of parking required by zoning rules to serve its condos and shops.

“We’re not building a storage yard, a parking lot, or a towing or garage business,” he said. “We’re not simply going to, nor do we want, to build any of those things on our lot.”

Colmer said Beach Towing’s representatives said they would agree to rescind the restriction — for a fee. But the two sides soon reached an impasse over what Colmer would only refer to as “a figure.”

An investor in the project who asked not to be named said that a person close to Beach Towing told him that a multimillion-dollar payment to the company would “make this all go away and get the project approved.”

Andrade insisted that Beach Towing has not demanded money, but said Deco Capital has made offers. He would not discuss details because of laws keeping mediation confidential.

“The deed restriction is not for sale,” he said. “Deco Capital are free to make offers, and when we get an offer that’s acceptable, we’ll consider it. We just want them to go away or build within the current law.”

Meanwhile, to accommodate a pedestrian breezeway through the middle, Deco Capital asked the city commission in March for a height increase from the allowable 50 feet up to 90 feet. The application drew mostly support from nearby residents, and opposition from some residents in the adjacent Lofts at South Beach and, notably, Beach Towing, whose operation sits across Bay Road from what would be the rear of the proposed Sunset Harbour Residences. The Lofts intervened in the lawsuit to back Beach Towing.

The plan quickly became mired in the Beach’s quicksand politics. Newly elected commissioner Kristen Rosen Gonzalez questioned whether Mayor Philip Levine had a conflict of interest because he owns property next door to the project that could increase in value because of Deco Capital’s development.

Rosen Gonzalez has gone on dates and has been often seen and photographed at public events with Kent Harrison Robbins, an attorney who serves as land-use consultant for Beach Towing, and has said the relationship does not pose a conflict.

Levine decided to abstain from voting even though the Florida Commission on Ethics ruled the mayor had no conflict.

In an interview Thursday, Robbins said that a payment for lifting the deed is simply the cost of doing business in deals like this. If the project will generate a profit of around $20 million, he said, a fee of 10 percent to 20 percent is “not unreasonable.”

“If you’re greedy, you have to pay to be greedy,” he said, alluding to Colmer and his partners. “Money is for solving problems, isn’t it?”

The brouhaha over the project has attracted well-known names in Beach politics like flypaper. Political consultant and lobbyist David Custin has joined the Beach Towing fold. Custin is a Beach political force who ran election campaigns for the mayor and four current city commissioners.

Another Levine political adviser, Christian Ulvert, jumped into the fray. Shortly after the mayor decided to recuse himself, Colmer hired Ulvert to handle his public relations.

Instead of the height increase, Deco Capital got a wag of the finger from other commissioners, who told both Colmer and Beach Towing to quit bickering and negotiate a solution by May.

That doesn’t seem likely anymore.

Many assumed that Beach Towing had been “grandfathered in” by the city to operate its tow lot even though subsequent zoning changes don’t allow it.

But the memo drafted for Deco Capital by Michael Larkin of Bercow Radell & Fernandez says that’s erroneous. It says a gas station opened on the property, 1349 Dade Blvd., in 1956. It was purchased in 1975 by Vincent Festa, who then apparently removed the gas pumps. In 1980, Festa — the current owner’s grandfather — got permission from the city to re-install pumps and operate as a filling station, but there’s no evidence he ever did so, the memo says.

In 1984, the memo says, when leaking underground tanks were removed, Festa told inspectors that he did no car repairs on the property, but operated simply as a tow lot. He never applied for or received permission from the city to operate exclusively as a tow lot, however, the memo says.

By 1989, zoning changes that disallowed towing as a primary or even accessory use on the property were put in place, meaning that Beach Towing cannot legally continue to operate out of its lot, Larkin writes. – Andres Viglucci and Joey Flechas

Published in The Miami Herald, April22, 2016