Miami Ordered to Hold Referendum on Virginia Key Project

RCI Group and Suntex advanced in their push to lease and redevelop the Virginia Key marina in Miami.

Miami-Dade Circuit Court Judge Alan Fine blasted Miami commissioners for showing “favoritism” and a “personal preference” to a competing incumbent bidder, Rickenbacker Marina, according to his order issued last week. A city selection committee had twice ranked Rickenbacker Marina’s application second to RCI and Suntex’s proposal for the site, but commissioners nevertheless pushed through a referendum with Rickenbacker Marina’s proposal.

The judge’s ruling marks the latest in the eight-year debacle over finding a lessee, operator and developer of the 27-acre city-owned marina at 3301 Rickenbacker Causeway.

In 2015, Miami issued the first request for proposals, with the city’s selection committee ranking RCI’s response ahead of Rickenbacker Marina’s. When commissioners issued the second RFP in 2017, RCI partnered with Suntex, and their joint venture again outranked Rickenbacker Marina’s application. Following bid disputes raised by Rickenbacker Marina, commissioners threw out all proposals submitted in both RFPs. Then, with encouragement from Rickenbacker Marina, commissioners tweaked city rules in a way that allowed them to bypass the competitive bidding process and put Rickenbacker Marina’s application to a referendum in 2021. Voters rejected the ballot measure.

Now, Fine ordered the city to hold a new referendum, this time asking voters if the RCI-Suntex joint venture should lease and redevelop the property.

“The commission turned a blind eye to its own selection process multiple times,” said Kendall Coffey, an attorney representing the joint venture in the lawsuit. “We are hopeful that the ruling puts the matter to rest,” and the city holds a referendum on the RCI-Suntex proposal in November.

The city, though, has other plans.

“We are disappointed with Judge Fine’s ruling as he relied on his own interpretation of the facts, rather than relying on the clear record,” City Attorney Victoria Mendez said, adding that an appeal is planned.

RCI and Suntex sued the city in 2021 over commissioners’ vote in 2020 to reject all proposals submitted in response to the second RFP and then hold the Rickenbacker Marina lease referendum.

Commissioner Joe Carollo in 2020 moved to strike responses to the RFP, citing three issues: environmental concerns stemming from a sewage spill in 2000 in Miami Beach tied to an RCI subcontractor; Shoreline Foundation, a potential RCI-Suntex subcontractor, having pleaded guilty in 2018 to defrauding the U.S. Coast Guard; and the alleged use of Aero Docks dry boat storage technology at a Fort Lauderdale marina.

But the sewage spill happened when a subcontractor of a subcontractor of an RCI affiliate struck a “hidden” pipe that wasn’t marked on National Oceanic and Atmospheric Administration map or any other official government records, Fine ruled. Plus, Rickenbacker Marina’s project would entail dredging the bottom of Biscayne Bay, which could lead to environmental impacts.

As for the Shoreline guilty plea, it didn’t come to light until after RCI and Suntex submitted their bid, Fine said. The joint venture has since terminated the subcontractor and said it can do the work on its own.

The RFP criteria was that a bidder can be disqualified because of past misconduct by one of its principals, but not for misconduct by one of its subcontractors, Fine added.

Regarding the Aero Docks issue, it stemmed from an alleged misstatement RCI and Suntex representatives made in front of the Miami selection committee that ranked the bidders. Either way, the city’s own staff determined it was a “statement of innocent confusion of a technical matter” that wasn’t intended to mislead the committee, Fine said in his order.

Rickenbacker Marina, led by President Aabad Melwani, protested the selection committee’s ranking in both the 2015 and 2017 RFPs. In fact, its protest to the second RFP ranking led to the city deferring a decision on a bidder for 20 months, from February 2019 to November 2020. Miami City Manager Art Noriega testified in court this delay is “uncommon” for an RFP, according to the order.

Rickenbacker Marina has remained the marina lessee and operator throughout the litigation, although at one point it became a holdover tenant on a month-to-month basis. Miami officials also had imposed a $100,000 additional monthly rent to compensate the city for revenue it didn’t receive because Rickenbacker Marina’s litigation delayed selecting a bidder. The RCI-Suntex proposal was deemed more profitable for the city than Rickenbacker Marina’s, according to the judge’s order.

Rickenbacker Marina has disputed in court whether it’s on the hook for the $100,000, according to Fine’s order.

Melwani said various city commissions have all concluded that the RCI-Suntex affiliate is a “non-responsive bidder.”

“This court’s decision ignores the city’s ample record evidence and runs woefully afoul of well-established procurement law,” Melwani said via email. “A judge cannot become the sole arbiter in the city’s competitive bidding process.”

Carollo didn’t respond to a request for comment.

Ultimately, the commission’s decision to strike all applications in 2020, and the decision to put Rickenbacker Marina’s application to a referendum the following year amounted to “a de facto bid award to the lower bidder in an arbitrary and capricious manner,” Fine wrote.