Wednesday, May 25, 2005

Key West Commissioners Stunned

Amazing. Today it was reported that Historic Tours of America had entered into a settlement with Duck Tours five days before the trial began. In that trial, HTA was being sued, along with co-defendent The City of Key West. This week, the jury ruled in favor of Duck Tours and awarded them $13.5 million, an island-rattling event. Immediately, commissioners were publicly asking "How much will they (HTA) chip in?". But today's press has revealed that HTA negotiated on it's own with the Ducks, and didn't include the city.
Probably the best piece of the story is Hugh Morgan, the HTA attorney. A week before the trial is set to begin, the City of Key West appoints him as their lead attorney for their defense. Strange, as it would seem to be a conflict of interest for him for him to not excuse himself from the trial. Oh, by the way, Morgan's law partner is Jim Hendrick, recently arrested by the FBI and IRS. And, Morgan is the Federal Magistrate for Key West.
Now city officials are hopping mad. Their favorite son, Historic Tours of America, has cost them a fortune. And the worst part may now be unfolding: they got cut out of a settlement. The attorney they went with may have negotiated a settlement for his other client/co-defendent (HTA) while not including them. Commissioner Harry Bethel, known for his tenacious attitude, is looking for blood. One thing seems certain: the fat-cat, monopolistic, overwhelmingly influencial days of the Conch Tour Train and Trolley is over.
Still yet to happen, the judge will soon rule on the validity of the contract HTA has with the City of Key West.
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Tuesday, May 24, 2005

Key West Loses Huge Lawsuit

The Duck Tour vs. Key West/Historic Tours of America case has reached a verdict and award decision.
After 4 hours of deliberation yesterday, the jury came back and ruled in favor of Duck Tours, a small amphibeous, harbor tour operation who filed the lawsuit after repeated harrassment from the city.
In the decision, the jury awarded Duck Tours and it's owner, John Murphy, $13.5 million dollars.
City officials are stunned, and the mayor of Key West, Jimmy Weekly, said on this mornings "radio magazine" program on local airwaves, "This will definitely impact the citizens of Key West."
It is unclear how much Historic Tours of America, owners of the Conch Tour Train and Trolley, will be asked to contribute. One things seems certain: the city of Key West will need to raise revenue somehow. The mayor, when asked where the money would come from, seemed at a loss. Weekly listed possible sources as higher permit fees, more parking tickets, and higher property taxes.
Still pending is the judges decision on whether to invalidate the city's agreement with Historic Tours of America. It is this agreement that the courts have ruled is a monopoly abusing it's power.
Murphy, Duck Tour's owner and plantiff in the suit, said he wanted to immediately begin tours again. It is unclear if the city has the good sense to allow this to happen, or continue to throw money and lawyers up the appeal process.
Either way, this is going to change things on the island. The next city commision meeting should be lively, with commisioners split on whether to again appeal or to pay.
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Monday, May 23, 2005

Corruption Charges For Key West Lawyer

Federal agents have arrested one of the Florida Keys' most known names in politics and law: Jim Hendrick, last week. He is the former Monroe County Attorney and the current law-partner of Hugh Morgan, the lead attorney of the defense team for the city and Key West and HTA in the Duck Tour trial.
The arrest was made by both the FBI and the IRS.
Word on the cocunut telegraph is that is stirring up more than just Hendrick. Other arrests are rumored to be in the works. Suprisingly, this arrest hasn't been noticed by the mainland press. Here is the local coverage.
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Large Lawsuit May Cost Key West Millions

This is one of those stories that depending on the outcome, could shake the foundation of Key West.
For the past two weeks, Key West is defending itself alongside of the Conch Tour Train and Trolley owners, Historic Tours of America. The case was filed by a local businessman who created an amphibeous tour 10 years ago called Duck Tours, using vintage World War II vehicles. The Duck Tours went out of business after being harrassed by the city, the case alleges. You see, the Conch Tour Train and Trolley have an exclusive license to operate a sightseeing tour on city streets. A Florida superior court, on appeal, ruled that the Train/Trolley/City arrangement constituted a monopoly and was in violation of free trade laws. Hence, the case was sent back to the local district court where it is being reheard.
The details are a bit nasty, and from my perspective, look like a slam dunk case for the prosectution. The Ducks are suing for $14 million, a sum that could cause a fiscal calamity for Key West. Today should be closing arguements.
More can be read about it here.
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Thursday, May 12, 2005

Utah Rafting

Notice the big break in the posts? Sorry for the quiet time. To be honest, I was on a trip out west helping out a buddy. He live in Moab, and has a cool Utah rafting guide service. Having lived in Key West for a long while now, I'm used to water clear as gin. I now know what the opposite looks like. The part of the Colorado river that we did on our Utah river rafting trip has water the exact color of chocolate milk. Surrounding us were towering arches and formations carved from the red stone cliffs. Utterly amazing.
Here are links to his various pages:

There was a huge snowfall this season in Utah. Alta got over 700 inches! That hurts.

So, there will be plentiful flows of water on the river, and with it, whitewater.

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We Want a Neighbor, Not a Speculator (chant)

Well, I've come to a new conclusion about the future of Key West's real estate market. Let's call it a new level of extension, if you will.
For quite a while now I've been warning of the affordable housing crisis looming on the horizon for Key West. And recently, have been joined by a host of worried politicians, half heartedly stabbing at the problem with bureaucracy. Mostly though, it is a small town where many characters double as officials and interested parties. The crisis is here, and it may tear the town in two before it remedies itself. Remember, these are houses and homes...not stocks and bonds.
And this leads to the new thinking. The impending housing surplus! The city and county have no choice but to build a large amount of housing. They need the employees, and the state may have gotten the word. Rumor is that the county is about to get a sizable number of housing permits freed up in the name of more generous hurricane evacuation times (oh, yeah, and affordable housing...right).
The Key West real estate bubble is similar to the rest of the country. It is fueled by low interest rates, and especially, generous lenders. When rates rise, interest-only loans vanish and remove a large amount of the demand. Let's call it artificial demand. Eventually, when those loans disappear, we will be left with a lot of surplus housing. For a place with no building permits being allocated, there is an amazing amount of building in the Florida Keys...Probably 1000s of units in the past 5 years.
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