End of the road for some South Beach sidewalk cafes? Judge sides with city in lawsuit

Carl Juste/cjuste@miamiherald.com

Miami Beach can implement a new program to regulate sidewalk cafes, a judge has ruled, giving the city new leverage over some restaurants it has had issues with on Ocean Drive, Lincoln Road and Española Way.

Miami-Dade Circuit Judge Alan Fine sided with the city last week by denying the businesses’ requests to halt the Oct. 1 implementation of a contract-based program for sidewalk cafes, which replaced a permit-based approach that a different judge struck down in December.

Under the new system, City Manager Alina Hudak would have the power to terminate the city’s two-year contracts with sidewalk cafe operators without cause, meaning the city would not need to justify its decisions in court or before a special magistrate.

“It’s an important ruling because it establishes our right to control our public spaces,” Miami Beach Mayor Dan Gelber said in a statement. “This will allow us to establish minimum standards that make clear to our businesses and visitors that this is not an ‘anything goes’ city.”

The businesses are seeking an emergency stay of Fine’s order while they appeal the decision to the Third District Court of Appeal.

“We respectfully disagree with Judge Fine’s ruling, but we hope Judge Fine and/or the appellate court will stay and prevent the city of Miami Beach from closing our clients down and eliminating dozens if not hundreds of jobs, so that they can exercise their constitutionally protected right to appeal,” said Phillip Hudson, an attorney for several of the businesses.

Rejection of annual permits

Last November, the city rejected 13 applications from South Beach restaurant owners seeking to renew their one-year sidewalk cafe permits, which allowed them to set up outdoor tables on the public right-of-way. But Miami-Dade Circuit Judge William Thomas said the following month that a city ordinance establishing the permit renewal rules gave officials too much discretion and created an “unpredictable” review process.

On Sept. 22, Judge Fine upheld the new, contract-based model, saying the city has a right to control oversight of its own property.

“Key to this conclusion is the fact that the real property at issue is exclusively owned by the City, the City has a continuing interest in what happens on its property, nothing that has happened created any vested property rights in any of the Plaintiffs, and all prior ordinances made clear that the grant of a permit was conditional,” Fine wrote.

Fine also ruled that the contract process doesn’t improperly force business owners to accept unfavorable terms, as they have alleged it does. He cited the fact that “numerous” businesses have received modifications to the city’s form contract language.

As of this week, the city had entered into concession agreements with over 150 sidewalk cafes.

Far fewer have failed to reach agreements with the city. The lawsuit includes a group of South Beach businesses whose sidewalk cafe permits had been rejected, including Ole Ole, Española Cigar Bar, Voodoo, Jalapeño, 524 Ocean, Ocean’s Ten, 7 Spices and D’vine Hookah. One restaurant, Il Giardino, was removed from the case after reaching a concession agreement with the city.

Regulating ‘hawking,’ drink sizes and tips

The standard agreement language, which was tweaked this summer in response to feedback from some of the business owners, includes restrictions on “hawking” to attract customers, bans on cocktails larger than 22 ounces, and transparency requirements for restaurants that ask for additional tips on top of automatically included amounts.

The contracts also ban the smoking of any “vapor-generating devices,” including hookah. They only govern practices on public rights-of-way, not inside the restaurants.

In an August court filing, several business owners said the contract-based system was simply an “end-run around” the permit process that a judge struck down last year.

“By foisting these ‘take it or leave it’ Concession Agreements on to Plaintiffs and other business owners throughout the City, the City hopes to compel them to abdicate their constitutional and due process rights,” the filing states.

The city commission passed a sidewalk cafe code of conduct in 2019 that, much like the new contracts, banned hawking and required business operators to disclose if a gratuity is included in the order. Under an ordinance passed by the commission last March, the city administration was allowed to consider prior code violations and negative restaurant reviews when weighing whether to accept or deny applications.

The revamped sidewalk cafe program is part of a broader attempt by Miami Beach officials in recent years to tame the party atmosphere of South Beach.

“Our job is to ensure residential quality of life is preserved and to support law-abiding businesses that sustain our economy — not those that blatantly disrespect our standards,” Vice Mayor Alex Fernandez said in a statement.