WHO OWNS THE LAST DESERT ISLAND IN KEY WEST HARBOR? Wisteria Island Motion To Dismiss To Be Heard This Week In Miami

Today the Wisteria Island snafu takes a trip to Miami.  Roger Bernstein, the owner of FEB Corporation, asked a Federal Judge last August to decide who owns the lush desert island just 600 feet northwest of Key West’s Mallory Square, Bernstein or the US government?   The first (and maybe last) hearing in the case is scheduled to be heard Friday, April 5th, 2013, in a Miami federal court.

This is the latest unfolding in the attempt to develop the last piece of wilderness in Key West harbor.  The story has both charmed and enraged Key Westers since 2007.

There have been City Commissioners lavishly ‘wined and dined’ by would-be developers only to be ratted out by restaurant waiters, a referendum stripping the City Commission of its power to govern the island overwhelmingly approved by 70% of angry voters, the discovery (inside a sinking boat) of a folder of correspondence between Bernstein and the infamous “Dirty Joke Dennis”, a convicted  kidnapper, who was apparently enrolled by Bernstein to infiltrate the opposition to Wisteria Island’s development, and finally the controversial contributions of Florida Fish and Wildlife (FWC) in the making of a Wisteria Island pro-development film, which spilled over into the triumphant trial of “Dangerous Don”, another colorful local character, who stood his ground against FEB Corp.

A story true to Key West’s heart and soul, now in court, before Federal Judge Jose Martinez… God help him.  According to the Government, believe it or not, everything hinges on what happened in 1951;  but according to Bernstein, it’s more a question of what happened in 1953 (and we are not even kidding).

In 1951 Bernie Papy, Sr, the 14-term State Representative, known as  “King of the Keys”, once tried for bribing a fellow Congressman with $ 500 and a case of scotch , decided to buy Wisteria Island.  He might have heard that the Navy was working on a large-scale redevelopment of Key West harbor with plans to turn Wisteria into an enormous fuel depot.  After all, insider trading is alive and well in today’s Congress.   Perhaps Papy thought that if he could get his hands on that highland he was bound to make a fortune.  Only problem: the Navy vehemently objected. An Executive Order signed in 1924, by none other than US President Calvin Coolidge, had reserved Wisteria Island for the Navy.

Obviously, the State should have cancelled the sale, but the Governor of Florida and Papy shared the same connection to ‘business people’ in Chicago and the State let him buy the island anyway, at his own risk.   That warning and the Navy’s claim can be found to this day in the Wisteria Island deed file, right where we initially found them.

The Government argues that under the Quiet Title Act a party has only 12 years to bring its case to court (beginning at the time the Government first notified anyone in the chain of title of the Government’s claim).  Obviously, says the Government, a 2012 lawsuit based on a claim that accrued in 1951 is well beyond the statute of limitations and the case should be dismissed.

Not so, says Roger Bernstein.  Bernstein’s lawyers have a different date, 1953, the date of the Submerged Lands Act.  In 1953, the US Congress conveyed a three-mile belt of submerged lands (which included spoil islands like Wisteria) to the coastal States.

So, the theory goes, it doesn’t matter that the State of Florida did not own the island in 1951 when it sold it to Papy because, in 1953, the State became the owner and that would obviously legitimize the sale.    Bernstein argues that a reasonable person could have believed that the Submerged Lands Act had extinguished the Government’s claim and since the Government only reasserted its claim last year, the statute of limitations should start running from 2012.

The Government points out that there is evidence that as early as 1908 and repeatedly thereafter, the US Navy had grand plans for Wisteria.  Documents show the island was created from a natural shoal area on the south end of Frankford Bank and was repeatedly built up in support of plans such as a coal depot (1908), a breakwater (1913), an aviation area and dry dock (1917), and more recently a Fuel Depot connected by underwater pipelines to the submarine basin and the sea plane basin (1952).

Government lawyers argue that the Submerged Lands Act was specially tailored to make sure that Naval Installations were not negatively impacted by the 1953 transfer of submerged lands to the coastal states.

Indeed, the Act contains a series of built-in exceptions; one of them excludes from the transfer any islands built by the Government for its own use.   And in fact, Bernstein himself has testified that one of the reasons the Navy built the island was to create a storm buffer for its Installation.

Considering the number of blue prints that can be found regarding the Navy’s development plans for Wisteria Island, it is hard to believe that a prudent buyer would not have been concerned that the Navy’s claim to Wisteria could have remained alive through one of the exceptions to the Submerge Lands Act.

If Bernstein survives the Government’s Motion to Dismiss, the case will go to trial; if the Government wins, Bernstein may need to start dusting off his Title Insurance.

Stay tuned…