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City of Pensacola v. Seville Harbour, Inc.

Florida Court of Appeals, First District

June 1, 2017

THE CITY OF PENSACOLA, Appellant,
v.
SEVILLE HARBOUR, INC., A FLORIDA CORPORATION, AND MERRILL LAND, LLC, A FLORIDA LIMITED LIABILITY COMPANY, GREAT SOUTHERN RESTAURANT GROUP OF PENSACOLA, INC., A FLORIDA CORPORATION, Appellees.

          NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

         An appeal from the Circuit Court for Escambia County. J. Scott Duncan, Judge.

          Terrie L. Didier and J. Nixon Daniel of Beggs & Lane, RLLP, Pensacola, for Appellant.

          Edward P. Fleming and R. Todd Harris of McDonald, Fleming, Moorhead, Ferguson, Green & de Kozan, LLP, Pensacola, for Appellee Seville Harbour, Inc.

          Robert A. Emmanuel and Adam J. White of Emmanuel, Sheppard & Condon, Pensacola, for Appellee Merrill Land, LLC.

          Charles F. Beall, Jr. of Moore, Hill & Westmoreland, P.A., Pensacola, for Appellee Great Southern Restaurant Group of Pensacola, Inc.

          WETHERELL, J.

         The City of Pensacola appeals the final summary judgment determining that the lease between the City and Appellee Seville Harbour, Inc., was properly renewed and that an agreement between Seville Harbour and Appellee Merrill Land, LLC, was a sublease, not a pro tanto (partial) assignment of the lease. We affirm the trial court's determination that the lease was properly renewed without further comment, and we affirm its determination as to the nature of the Seville Harbour-Merrill Land agreement for the reasons that follow.[1]

         Factual and Procedural Background

         In 1985, the City and Seville Harbour's predecessor-in-interest entered into a lease agreement-which we will refer to as the "Marina Lease"-for three parcels of undeveloped property along the waterfront in downtown Pensacola. The leased property was comprised of uplands and submerged lands, and as contemplated by the Marina Lease, the property has been developed into a marina and related facilities.

         At the time the Marina Lease was executed, two of the parcels (Parcels I and III) were owned by the City, while the third parcel (Parcel IA) was owned by the State of Florida and leased to the City. In 1990, the State deeded Parcel IA to the City. None of the provisions of the Marina Lease related to Parcel IA were modified after this change of ownership.

         The Marina Lease provided an initial lease term of 30 years for Parcels I and III, which could be "renewed and extended" for an additional 30 years upon written notice from the lessee (now Seville Harbour) to the City. The initial (sub)lease term for Parcel IA was also 30 years, but it could only be renewed in "successive five (5) year increments" upon payment of a "lease fee . . . equal to the appraised rental value . . . charged to [the City] by the State of Florida."

         The annual rent due under the Marina Lease is the greater of a per-square-foot "ground rent" or a percentage of the lessee's (now Seville Harbour's) "gross sales" and "gross rentals" in the prior year. The Marina Lease defines "gross sales" as all monies received from business conducted on the leased property "by [Seville Harbour], its subsidiaries or business combinations" (emphasis supplied), and it defines "gross rentals" as all rents received "by [Seville Harbour] from all . . . sublessees or tenants" on the property.

         In 2000, Seville Harbour and Merrill Land entered into the "Pitt Slip Marina Sublease Agreement" pursuant to which Seville Harbour "subleased" Parcels IA, III and part of Parcel I[2] to Merrill Land for "the remaining term of the Marina Lease plus any extensions or renewals thereof." This agreement, which we will refer to as the "Marina Sublease, " reserved to Seville Harbour "a perpetual non-exclusive easement over and on the property . . . for ingress, egress, parking, signage, utility lines . . . as well as for maintenance, construction, and reconstruction of [the non-transferred part of Parcel I]." It also gave Seville Harbour (and the City) the right to ...


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