Disputes between city and Audubon over King's Landing escalate; will legal action be next?

FORT PIERCE — City officials and lawyers for the developer of King's Landing have traded dueling letters in recent weeks, each charging the other violated their contract for Audubon Development to build on the former H.D. King Power Plant site.

Audubon President and CEO Dale Matteson recently faced city commissioners, who voiced concern that the developer was headed for missing a number of the contract's deadlines.

City notifies Audubon of default

The back-and-forth of letters began March 21, when City Manager Nick Mimms wrote to Matteson, alleging Audubon was in "default" of the contract.

"Audubon shall have 30 days to cure this default and come into compliance with the provisions of this agreement," Mimms said in the letter, obtained by TCPalm.

That deadline, 30 days from March 21, would be April 20.

The alleged default goes back to one of the core deadlines Matteson and commissioners discussed at a March 12 meeting. Audubon was required to apply for building permits or development permit compliance review approval by March 18. Matteson indicated he'd miss that deadline. The commission and staff, including Mimms, said the city would not change its deadlines.

Audubon ultimately did apply for development permit compliance review approval on March 19, one day late, but before the city had sent notice of a default. At the time, however, a city spokesperson indicated a review of the application would be necessary before it could be determined that Audubon was in compliance.

By the time of Mimms' March 21 letter, it seems, that review had determined the application failed to meet certain requirements.

"Therefore, based on our review, the aforementioned milestone for Phase 2 has not been achieved," Mimms wrote.

Audubon responds

In an April 5 response, addressed to Mayor Linda Hudson and provided to TCPalm by Matteson, the developer's attorneys said the city was in no position to allege a default by Audubon.

"The city cannot declare default without being in compliance with the Development Agreement, itself," attorneys wrote. "The city’s numerous misrepresentations constitute a violation of the Development Agreement."

Specifically, the letter alleges many of the King's Landing delays were due to the city.

The letter alleges, as Matteson has in the past, that the property's readiness was misrepresented by the city to potential developers in its initial request for proposals.

One of the biggest issues was that the power plant's foundations had not actually been removed. Audubon had to remove 1,500 tons of concrete. There also were lengthy issues with transferring the title to Audubon and an unexpected process to get proper permits from the Florida Department of Environmental Protection, which, Matteson says, he was told the property already had.

"We spent that time and a significant amount of money cleaning up a mess we had no part in," Matteson said in an email last week. "King’s Landing was fully financed but we could not build. If the site was as it was described in the (request for proposals), King’s Landing would have gone vertical by now."

Getting the property ready for construction came at the cost of more than $1.5 million, according to the letter. Overall, Matteson said at the March 12 meeting, his company has spent about $2 million more than it anticipated, with little progress to show for it. The city has reimbursed Audubon for some of those costs, but the letter alleges more is deserved.

The letter makes another accusation against the city, as well. Audubon's inability to submit a proper application on time — the source of the current default — is in part due to the city, it said. The company's timeline was based on the city moving quicker than it has, the letter said.

"The city promised Audubon a 'fast-tracked' review process. Audubon relied on this promise. Despite the city’s representation, Audubon was met with several planning and zoning delays by the city. Instead of 'fast tracking,' the city actually slow-rolled the review process," the letter said.

Furthermore, the letter said, the company is still waiting on the results of city staff reviews, which it expected to receive before submitting the application at the heart of the alleged default.

"City review was a necessary precursor to the submission of building plans and permits. The city’s review delays consumed the time remaining in the agreed upon development schedule," the letter said. "When the city issued its purported Notice of Default, Audubon was still waiting for the city’s review of multiple items, which was required prior to submission of any building plan or permit."

What's next?

A city spokesperson declined to comment on the letter from Audubon's lawyers or on general questions about what could come next.

Those questions included whether the city would consider taking back the property from Audubon if the default was not remedied. Neither Mimms nor Hudson nor every city commissioner responded to similar requests for comment.

For their part, Aubudon's attorneys clearly think there's a real possibility the property could be taken from Audubon. The letter said the default notice was issued despite the city's role in the delays.

"On this basis, the city now attempts to declare Audubon’s default and to retake the property," the letter reads. "Note, the property has significantly increased in value as a result of Audubon’s legal work and remediation efforts."

More: King's Landing developers day late on key application, future deadlines also in question

More: Bed-and-breakfast, wedding venue planned for historic Coast Guard House on Fort Pierce Inlet

With an April 20 deadline issued by the city for Audubon to cure the default, Audubon issued its own deadline for the city to rescind its default notice. The letter suggested Audubon may pursue legal action against the city if the deadline is not met.

"Audubon would welcome the opportunity to work with the city to come to a resolution that would benefit both parties and the community. However, if the city fails to rescind its purported Notice of Default by 5 p.m. on April 12, 2024, and attempts to retake the property, Audubon will have no choice but to defend its rights pursuant to the development agreement and the applicable laws," the letter reads.

Meanwhile, no work is taking place on the King's Landing site. At the March 12 City Commission meeting, Matteson said his company and its construction partners are ready to begin underground construction, but are waiting for the city and the Fort Pierce Utility Authority to first do their work, under the roads surrounding the property. Those projects received $2.7 million from the state in 2022, though none of that has gone to Audubon.

It would be a mistake to go ahead with underground work without knowing the plans for those other projects, Matteson said, especially when it might be possible to do the work in conjunction with those projects.

Matteson is also pursuing separate plans to turn the historic Coast Guard House on South Hutchinson Island into a bed-and-breakfast and event space, in partnership with Indian River State College. The King's Landing project also is planned to include partnerships with IRSC, including its culinary and hospitality programs.

Wicker Perlis is TCPalm's Watchdog Reporter for St. Lucie County. You can reach him at wicker.perlis@tcpalm.com and 504-331-0516.

This article originally appeared on Treasure Coast Newspapers: Conflict between Fort Pierce and King's Landing developer heating up