By Michael Salerno
For Hometown News
PONCE INLET - A settlement offer aimed at resolving a long-standing property rights dispute is now on the table.
City leaders are considering a $35 million settlement proposal from Pacetta LLC property owners Lyder and Simone Johnson as a way to avoid a jury trial that would determine if the Johnsons should be awarded any monetary damages following a circuit judge's recent ruling that found town leaders took property rights away from the Johnsons.
The terms of the proposal state the town must pay the Johnsons $2 million in escrow within 10 days of agreement and another $2 million by the end of the year, with the remaining $31 million paid out over a 31-year period.
Additionally, the Johnsons are seeking entitlements that would allow them to develop on the 16 acres of riverfront property they own, where they planned to build a mixed-use working waterfront that included dry boat storage.
After a five-hour closed executive session on the proposal that was held recently, town council members unanimously voted to authorize a session with the town's attorneys to draft a counteroffer to the proposal and bring it to public discussion at the next town council meeting.
"The town has asked for this proposal, (and) it has been received," Mayor Gary Smith said. "I sincerely believe there needs to be a response to this proposal."
Ms. Johnson explained, because the town does not have the assets or revenue that would support her proposal, the only way the town could financially support it is if Pacetta finances the settlement and acts as the "bondholder" for Ponce Inlet.
"In no way will this cover the losses we have incurred for eight years," she said. "We will restore ourselves, our investment-backed expectation, through future development. And that will probably take five to 10 years."
A voter referendum would be likely in order for the bonds to be approved, she added.
The litigation began after town leaders passed development restrictions that only affected properties the Johnsons owned, supported by a 2008 charter referendum - which was invalidated in a 2010 court ruling - that restricted the size of dry boat storage and prohibited it in the zoning district where Pacetta's 16 acres are located.
Costs of the litigation have been so expensive, Ms. Johnson said, that "the town's continuation, existence and economic viability" is at risk. Taxes are expected to go up in the 2012-13 fiscal year to cover legal expenses, and town leaders recently recommended an initial property tax rate of $6.25 per $1,000 of assessed value - above last year's millage rate of $4.76 - that, if approved, would raise an additional $700,000 in revenues.
Ms. Johnson anticipated the financial impact of a settlement, if accepted, would be that the average homeowner in Ponce Inlet would pay an additional $370 a year in taxes - additional revenue aimed at preventing worse scenarios for the town such as continued legal battles and even bankruptcy.
The $35 million settlement offer is the Johnsons' third attempt, following attempts in July 2011 and December 2011, in trying to reach a settlement with town leaders.
She said she hopes council members will finally be open to settlement this time around.
"You can never move forward as a community if you're always looking in the rearview mirror," she said. "And if you're always looking back, you cannot move forward, and you're guaranteed you're going to crash."
There was no discussion among council members or citizens related to the Johnsons' settlement proposal.