The city of Holmes Beach and the Bali Hai Beach Resort’s game of tit for tat is escalating to new heights.
Special magistrate Michael Connolly issued five orders Jan. 19 imposing fines against the resort, 6900 Gulf Drive, which has tangled with the city in recent years over development at the property.
Since purchasing Bali Hai in 2019 for about $20 million, developer Shawn Kaleta has completed extensive renovations, including the addition of a spa and lounge for guests.
The city argued the resort did not obtain construction permits or an updated site plan for the accessory uses, resulting in a city stop-work order on the property in January 2020.
The city then filed a legal complaint in May 2020 with the 12th Judicial Circuit Court asking for injunctive relief that would compel the resort to comply with city code after staff observed that construction on the property had continued despite the order.
The two parties have been mired in a legal deadlock since, resulting in nine circuit court cases — five remained open as of Jan. 22 — plus a $3.125 million federal lawsuit filed by Kaleta against the city, claiming it violated the 1983 U.S. Civil Rights Act.
Little progress has been made in circuit court for either side and a hearing has yet to be scheduled in the federal case.
In the meantime, the city upped the ante by requesting Connolly impose fines against the resort for seven city code violations.
Connolly found the resort in violation in all seven cases and assessed fines, including:
- $5,000 for a repeat violation for continuing to work after the city posted a stop-work order;
- $500 per day starting Oct. 12, 2021, for a repeat violation for operating a bar/lounge without an approved site plan;
- $500 per day starting June 11, 2021, for a repeat violation for construction without a city-issued permit.
While a $5,000 fine is splashy, the real waves come from the two running fines.
With a combined 327 days of $500 daily fines running through Jan. 22, the resort debt stands at $163,500 in accumulated fines.
Connolly found four more violations: operating a bar/lounge and spa without business tax receipts and completing plumbing and electrical work and installation of a new AC system without city permits.
However, Connolly did not issue fines for those violations, instead allowing the resort until Jan. 31 to first comply with city code.
Connolly also assessed $127.24 administrative fees for all five orders, bringing the total cost of all new fines and fees to $169,136.20.
The fines help renew the city’s financial pressure against the resort after it vacated $160,127.24 in accrued fines in November 2021 because of concerns that it failed to record, provide virtual access to or properly notice June 11, 2021, hearing.
Attorney Louis Najmy, a principal in the Bradenton-based Najmy Thompson law firm, representing Bali Hai, told The Islander Jan. 19 the resort’s federal lawsuit is the “only avenue for fairness” to resolve its issues with the city.
“I believe that many people in the city want it to be fair and think that it’s fair, but they’re ignoring the big elephant in the room, which is the toxicity of the city … specifically toward Shawn Kaleta,” Najmy said. “Of course, that’s going to happen, but a city can’t allow itself to be governed like that.”
Coconuts violations
Connolly also imposed daily fines for code violations at a pair of Kaleta-owned vacation units at the Coconuts Beach Resort, 100 73rd St., including:
- $500 per day starting Dec. 18, 2021, for a repeat violation for renting and/or advertising unit 110/203A for less than seven days in the city’s A1 district;
- $500 per day starting Dec. 22, 2021, for a repeat violation for renting and/or advertising unit 118/202C for less than seven days in the city’s A1 district.
Both daily fines are set to run until the units come into compliance by canceling bookings and removing advertisements for less than seven-night stays.
Both violations include $127.24 admin fees, bringing the cumulative cost of the new fines and fees to $33,000 as of Jan. 22.
City staff also presented code violations for improper length of stay against two other vacation units at Coconuts that are not owned by Kaleta.
Staff recommended a $500 daily fine for a repeat violation and a $250 daily fine for a first-time violation at units 103/102B and 105/104A.
The units are owned by Flehd Modern Inc. and Flehd Property Service Advertising and Management Inc., which are owned by Einar Tiefenbach of Germany, according to Sunbiz.org.
Port Richey-based attorney Emily Werner, representing the owner, said her client came into compliance as soon as the city provided notice of violation. She said all bookings of less than seven days had been canceled for both units, and all advertisements for less than seven-night stays had been taken down.
Connolly issued two orders establishing violations had occurred but did not impose fines in one case and only imposed a one-time $250 fine in the second due to the owner’s efforts to comply with the city upon notification.
Along with two $127.24 administration fees, the cost of new fines and fees against Flehd totaled $504.48.
Najmy said the orders displayed an underlying “toxicity” with which the city handles conflict with Kaleta.
“As far as the rulings today, some of them I thought were even demonstrative of the fact that even the magistrate is influenced. He’s hired by the city,” Najmy said. “They’re just not aware of what they’re doing to us. They’re like ‘Oh, we just want to play by the rules and for it to all be fair.’ But their actions don’t match their words.”