Summary of 3 Lawsuits

MEMO on LEGAL issues

Dear Neighbors,

The Seaside 1 Board has been asked to vote whether to file a lawsuit against Walton County.  We want to update you on all legal actions the STC is currently engaged in, and new proposed legal actions.  There are presently three lawsuits underway or in consideration summarized as follows:

1. STC vs SCDC Case # 11 CA 792 (existing lawsuit). 
2. Customary Use Lawsuit (existing lawsuit).
3. Equivalency Matrix Lawsuit (new proposed lawsuit).

1. STC vs. SCDC Case #11 CA 792.

This was the first lawsuit initiated several years ago between STC (Seaside Town Council) and SCDC (Seaside Community Development Corporation).   This lawsuit was initiated by the homeowners generally over perceived encroachment by SCDC on recreational land, representation on the Seaside Architectural Review Committee (SARC), and development of the commercial areas of Seaside.  In October of last year, the judge ruled that the STC didn’t have legal standing to bring this suit and that the legal standing was with the individual street Homeowners Associations.  STC refiled this lawsuit using the West Ruskin HOA asking for standing, and SCDC appealed asking for their attorney fees to be paid, both which were rejected by the judge.  STC has appealed the case to the 1^st Appellate Court in Tallahassee where a three-judge panel will hear the appeal.  This case is pending with briefs being filed, responses to the briefs, oral arguments and then a final decision by the court.     

To date approximately $1,000,000 of legal fees have been spent on all lawsuits.  This suit cost STC approximately $800,000 through the end of 2018, funded by homeowner HOA dues.  STC budgeted an additional $500,000 for legal expenses this year, so a total of $1,300,000 of legal expenses have been allocated through 2019. 

1. Customary Use Lawsuit. 

This lawsuit is under way and is about the County’s recent changes in the ordinance to declare all of the beach (dry sand) up to the base of the sand dune as public beach.  Before this, it was understood that the beach at Seaside was private up to the mean water line.  STC proposed joining a lawsuit with many other property owners and similar developments to Seaside up and down the 30A beach to keep the beaches private.  Legal costs for this suit are split by all the parties to the lawsuit which will help with the attorney fees.  The Seaside 1 Board voted to join this lawsuit to keep Seaside’s beach private.

1. Proposed Lawsuit with Walton County over the Equivalency Matrix. 

Seaside was created as a planned community, meaning that as part of the original plan the County set a limit on the number of homes and various types of other uses that SCDC is entitled to build. Overtime most of Seaside is built out, but not all the units SCDC is entitled to build out have been used.  SCDC’s current entitlements include in various quantities hotel units, Condo units, Apartment units, office space, Commercial space, restaurant space, civic space, fitness space etc.  The construction of these spaces is governed and permitted by the county considering traffic, trip generation, parking, water and sewer and solid waste capacity.  As market demands change developers shift priorities to accommodate the market such as swapping hotel room units for restaurant units.  

SCDC, like other similar long-term developments, proposed an Equivalency Matrix that allows different types of commercial uses to be swapped within the overall cap, taking into consideration trip generation factors, parking factors, water-sewer factors and solid waste factors.  This was opposed by STC but approved by Walton County.  STC sued Walton County over this issue but withdrew the suit after the findings that STC didn’t have standing to sue in the original SCDC case. 

STC is now seeking approval of each HOA to enter a lawsuit with Walton County over the Equivalency Matrix.  With or without the equivalency matrix, SCDC is required to get County approval to build out any more units.  However, STC is proposing the lawsuit based on the belief the Equivalency Matrix doesn’t equate parking demand properly and will possibility make it easier for STC to get County approval for swapping various types of uses. 

STC is asking the Seaside 1 Board to vote to approve entering the lawsuit.  We are not sure of the estimated cost of this lawsuit currently. 

As your Board, we want to ensure that your investment in Seaside through your assessment each year is being used for the betterment of our community.  There us much to do – we need physical improvements to be competitive with other developments, ongoing maintenance, and legal issues when necessary, but there are limited funds budgeted each year. 

We are interested in hearing your thoughts on the merit of continued lawsuits, and specifically whether you support entering a new third lawsuit over the Equivalency Matrix.  We want to know how to best represent the majority of Seaside 1 homeowners.  We are here to represent you and your concerns and look forward to hearing from you.  We will be sending around a survey to better understand your opinion, but we have limited time to decide so please share your thoughts when you receive the survey.