MADEIRA BEACH — William Gay wants a pool, restaurant, and other improvements to the Cambria Hotel’s fifth-floor roof deck removed and the owners of the Madeira Beach Town Center project to forfeit their profits.
A lawsuit he filed on April 18 in Pinellas County Circuit Court is the part-time Madeira Beach resident’s latest effort to force developers to abide by city rules.
His lawsuit claims the developers of a multimillion-dollar, 6.6-acre project failed to meet multiple city code requirements, including setbacks, parking regulations and building height limits.
Previously, Gay successfully sued two cities’ officials for violating the state’s Sunshine Law, winning nearly $200,000 in reimbursed legal fees from Madeira Beach and Dunedin.
Following a 2017 lawsuit alleging that developers of the Madeira Beach Town Center violated city land use and building codes, he agreed to a mediated settlement that set strict rules for the development’s continuation.
Gay’s current lawsuit alleges the developers violated that development agreement.
“I spent most of my career consulting with local government and working with the Department of Justice on research and evaluation projects. I basically know how city government operates and should operate,” Gay says.
When he moved to Madeira Beach, he says he didn’t pay much attention to local government at first. But growing controversies over development and ethical issues that arose in the town in 2016 grabbed his attention.
“I applied my professional experience to what is happening here. What I am finding is that the city does not really follow its development ordinances. I am interested in good government, and I want to make sure my tax dollars are used properly,” Gay says.
His lawsuit specifically names:
• Madeira Beach Town Center LLC (MBTC) — the original 6.6-acre development calling for two hotels, two condominiums, and a marina, now owned by William Karns, the original project developer, and Kevin R. Bowden, a hotelier;
• Madeira Hotel Investors LLC — the Cambria Hotel, now owned and managed by Bowden;
• Town Center Condo B Development LLC — a completed and mostly sold-out condominium, owned and managed by Karns;
• Condo Company A LLC — a condominium project now under construction, owned and managed by Karns; and
• Madeira Triangle Properties LLC — the site of a future hotel and mixed-use project, now owned and managed by Karns, Marcus Winters and Tom Frederick.
The Marina property is not involved in the lawsuit, nor are the city or city officials named in the lawsuit. However, Gay indicates future action may be taken against the city.
“It’s actions that were taken by the developers that we are interested in,” he says. “Going forward, depending on how this case transpires, it is possible city officials could be implicated.”
Cambria Hotel violated city development rules, according to the lawsuit.
“MBTC willfully and blatantly violated agreements that it entered regarding how the properties would be developed and continues to profit off its disregard of these agreements. Mr. Gay is simply asking MBTC and its successors to stick to their end of the bargain,” Gay’s attorney, Jane Graham, said Friday, adding that “I enjoy trial” when it becomes necessary.
Specifically, Gay is asking for sanctions against the companies involved in the project, damages, disgorgement of profits, declaratory and injunctive relief, court costs, attorney’s fees, and any other relief the court “deems just and appropriate.”
Gay alleges the developers consistently failed to file a “full site plan” with the city, and instead only proffered a “concept plan” that did not completely describe the project.
Gay twice challenged the development in court, eventually signing onto a mediated agreement that included a “declaration of restrictive covenant” restricting the project to a “maximum of 5 (five) floors” and a “maximum of 125 rooms.”
“Investors violated the Restrictive Covenant by constructing, operating and advertising an unauthorized sixth floor, which includes a rooftop pool restaurant area, and storage facility not depicted on the Concept Plan,” the lawsuit states.
Gay is asking that the rooftop swimming pool, Ember bar and restaurant, and storage be completely removed.
He also alleges that a planned second restaurant, the Tiki Hut on the Cambria Hotel’s ground floor, is double the available space as depicted in the original concept plan.
In addition, Gay says the hotel has illegally expanded its recreation area into an area originally designated for parking and did not properly expand its parking to accommodate the spaces required by the Ember or Tiki Hut restaurants.
Gay says the developers failed to properly list the value of the two condominium buildings, designated as “Condo A” and “Condo B.”
That value is the basis of city-imposed permit fees, according to Gay. Underestimated project values would result in lower permit fees — a loss of potential revenue that could either add to or offset property taxes.
Karns disputes this, however, saying that city permit fees are based on a calculated value of square footage set by the city and the Federal Emergency Management Administration (FEMA).
Condo B, which is completed and nearly sold out, according to the lawsuit, has yet to submit a required landscaping plan and has balconies and window awnings that intruded into both side and front setbacks, according to Gay.
Another part of the original MBTC project involves land where a second hotel and parking garage is planned. The lawsuit says this land is currently being used as an “unlicensed, unpermitted parking lot.”
The lawsuit maintains the lease with Hotel A for parking to accommodate the needs of the Tiki Hut as “illusory” since the parking area would be unavailable during construction of the hotel.
Gay wants the court to halt construction of the Tiki Hut, bar unlicensed parking operations, suspend any operations or plans that might exceed the allowable 5,000-square-foot commercial area, and that certified cost estimates and appropriate permit fees to be recalculated for the Cambria Hotel and the two condominiums.
“It is clear that MBTC has acted in bad faith by deliberately disregarding the terms of the Mediated Settlement Agreement,” Gay’s lawsuit states.
Karns shrugged off Gay’s allegations.
“There is no quit in him. We got all the appropriate approvals. This lawsuit has no teeth,” Karns said, insisting the projects were built “exactly” to the terms of the mediated settlement.
“This guy has cost the city so much money since 2016 with all the frivolous lawsuits and continuing public records requests,” Karns said.
Bowden could not be reached for comment. He, as the owner of the Cambria Hotel, has potentially the most to lose in the lawsuit, since it seeks the removal of the hotel’s rooftop amenities and forfeiture of profits.
The defendants in Gay’s lawsuit have 20 days from receiving notice of the lawsuit to respond to the court.
If Gay is successful and the court agrees to seize the project’s profits, a court remedy known as “disgorgement,” Gay stands to win tens of thousands of dollars. Gay says any money won in the lawsuit that remains after paying his court costs and legal fees "will be used to benefit the city and the citizens” of Madeira Beach.
It is also possible the court could order the removal of the rooftop amenities. In a much more extreme 1999 case, homeowners in Martin County won their lawsuit over a $3.3 million luxury apartment complex. As a result, the court ordered the 45-unit Villas at Pinecrest Lake building to be torn down.
However, whatever the result in Circuit Count, it is likely any of the parties will appeal.
Meanwhile, Gay is scheduled to be arraigned May 15 in County Court on a misdemeanor criminal charge of petit theft for allegedly removing a campaign sign belonging to the Doug Andrews campaign.
Such an action violates state law, but it is also illegal to put election signs on public property or right-of-way. Political signs are allowed only on private property and with the permission of the property owner.
Andrews, a former city commissioner who recently lost his bid to become mayor of Madeira Beach, says that more than 50 of his campaign signs were stolen during the spring election.