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Judge ends Oculina Bank's bid to develop Osprey Estates

STORY BY STEVEN M. THOMAS, (Week of April 25, 2013)
Illustration of proposed Osprey docks.

Administrative law Judge Bram D. E. Cantor put an end to the proposed Osprey Estate subdivision Friday, issuing a closely reasoned and surprisingly readable 30-page report ordering the Florida Department of Environmental Protection (FDEP) to deny a permit for the development.

Vero Beach-based Oculina Bank had been trying to get the subdivision approved in the midst of ecologically sensitive wetlands, and in February 2012, saw success almost within its grasp when FDEP published notice of its intent to grant a permit for three 6,000-square-foot houses with docks extending up to 540 feet into the Indian River Lagoon.

The judge’s order banning the development was a sweet moment for island residents who banded together in March 2012 to stop the project.  They argued it would pose a hazard to navigation in the Intracoastal waterway, damage seagrass beds, endanger manatees and decimate a critical fish nursery by draining wetlands on the mainland shore of the lagoon a mile north of the Barber Bridge.

“This is a great day for the environment and for our beautiful lagoon,” said John’s Island resident Carolyn Stutt when the decision was announced late Friday afternoon. “Hopefully, the DEP learns from this they have to follow their own regulations.”

Stutt and her husband Bill, whose home is on the lagoon, led the effort to stop the subdivision. They organized a group of 22 families to oppose the project and hired renowned environmental attorney Marcy LaHart to file petitions and other paperwork and argue the case against the project in administrative court hearings.

LaHart in turn hired expert witnesses, including Vero Beach environmental consultants David Cox and Dr. Grant Gilmore, to provide evidence that Osprey Estates would damage the environment.

Gilmore, a founding scientist at Harbor Branch Oceanographic Institute, is considered the foremost expert on fish life in the Indian River Lagoon and, according to LaHart, his testimony was key in shaping Cantor’s ruling.

“The most important point to the judge was the value of the habitat the project would have destroyed, especially its value as a nursery for commercially and recreationally important fish species,” LaHart said.

The 15-acre site was bought by Lobo Properties North Inc. for $4.1 million in October 2005 at the height of the housing and property bubble. Oculina, which had been founded the year before, financed the purchase, committing a large percentage of its capital. When the boom went bust and the project faltered, the bank took the property back from Lobo in 2008.

Beginning in 2009, Oculina made several attempts to get the site permitted for development, scaling the project back after each rejection by state agencies.

In February 2012, the bank saw light at the end of the development tunnel when the DEP signaled its willingness to allow three large houses with docks ranging in length from 355 feet to 540 feet.

But the plan raised red flags for environmentalists and boaters and on March 28, 2012 Michael Casale, a systems designer with Clemens Bruns Schaub Architect & Associates, filed a 12- page petition for an administrative hearing to challenge the project on ecological grounds.

The Stutts filed a similar petition a few days later alleging inaccuracies in the DEP’s assessment of project impacts and violations of state environmental protection statutes.

Gem Island resident E. Garrett Bewkes filed a third petition asking the Florida Division of Administrative Hearings to assign a judge to review the development and stop the DEP from permitting construction. He said it would cause “the destruction of sea grass, mangrove and marsh areas [that] will harm other plant and animal species and [cause] the overall marine ecology of the area to be adversely impacted.”

Over the next nine months, Oculina and the DEP fought a determined rear-guard action, bobbing and weaving legally as LaHart poked holes in their arguments justifying the development.

The most blatant violation of its own rules evident in the DEP’s initial intent to allow the project had to do with the length of the proposed docks.

According to state code, “no dock shall extend waterward of the mean or ordinary high water line more than 500 feet or 20 percent of the width of the water body at that particular location, whichever is less,” but the site plan submitted with the permit application showed the longest Osprey Estates dock extending more than 500 feet into the lagoon, obstructing more than 40 percent of the waterway. 

When challenged, Oculina revised the plan to shorten the docks but LaHart and her experts continued to find other flaws in the plans. Each time they did, the bank made another change or revision.

“It seems every time we find a weakness in what they are proposing they put a band aid on it and the DEP approves it,” Bewkes said last fall.

The DEP’s avid defense of the environmentally questionable plan raised suspicions of undue political influence.

“Those guys at Central District [of the DEP] didn’t accidently overlook the length of the docks,” Cox said last spring. “They know the regulations controlling docks inside and out without even looking them up.

“That kind of irregularity in the review process makes it seem like the project has been given special consideration from the top down. I don’t have concrete evidence of that, but the fact that DEP was ready to permit illegal docks before they were stopped by public outcry seems strange.”

A letter sent by Steven Gieseler, an attorney representing Oculina Bank, to bank board President Jeffrey Maffett hinted at the possibility of political influence at play. “As your own contacts have confirmed, Gov. Scott’s approach, when applied at the administrative level, will foster a climate consonant with approvals of projects like Osprey Estates.”

 More than 80 petitions, responses, revisions motions and orders had been filed with the court by the time the matter was finally aired in a two-day hearing in front of Cantor at Vero Beach City Hall last November.

After the hearing the judge reviewed all the evidence presented by the lawyers and expert witnesses on both sides and allowed each side to make a final written statement.

The long nerve-wracking wait for his decision came to an end on Friday when Cantor recommended the DEP “issue a Final Order that denies the Consolidated Environmental Resources Permit and Sovereignty Submerged Land Authorization to Oculina Bank.”

“We have some members of the group who were optimistic the judge would decide in our favor and some who were pessimistic and thought we would lose because it took so long,” said Bill Stutt.

“The judge’s decision is a wonderful development.”

“I thought Marcy put on a very strong case,” says Carolyn Stutt who was in the optimistic camp. “It seemed to me the judge saw through Oculina’s arguments.”