Business Pensacola

Notes on Airport Concessions hearing yesterday

April 4, 2014

scales01x300
Judge Gary Bergosh heard arguments for nearly five hours on a temporary injunction request by Robert de Varona, the airport’s food concessionaire, to prevent the city from removing and storing his restaurant kitchen equipment, furniture and other items. Begun at 2 p.m., the hearing didn’t end until shortly after 7 p.m.

Varona’s attorneys argued that the lease contract and a Feb.11 letter (2014-02-11_60_Days_For_Varonas_Page_1 ) from the airport director gave him 60 days after the end of his lease on March 31 to move out.

However, Beggs & Lane attorneys contended that the lease gave the city the authority to move Varona out of the airport upon expiration of the lease. The city sent a Friday, March 28 letter written by attorney John Trawick ( Varona) demanding de Varona essentially move out in a 24-hour period after his lease expired.

Judge Bergosh ruled that Varona’s attorneys failed to meet the four legal requirements for granting a temporary injunction against the city. However, he also ruled that Airport Director Greg Donovan’s Feb. 11 letter did give Varona 60 days after the end of his lease to wrap up his business affairs at the Pensacola International Airport. He said that the city was “collaterally stopped” by Donovan’s letter and Varona had 60 days to complete his transition.

“Based upon the first letter, I find the only just ruling I can find here is for de Varona,” Bergosh told the courtroom. “Mr. de Varona, the airport is important to the city. If you can do this quicker, that would be good.”

Before making his ruling, the judge had called the attorneys into a brief private meeting in his chambers. Both sides left the courtroom and scrambled in the hallway outside to reach an 11th hour compromise but failed.

In the courtroom at the city’s bench sat Mayor Ashton Hayward, Pensacola International Airport Director Greg Donovan and Beggs & Lane attorneys Charles Wiggins and John P. Daniel. Robert de Varona appeared with his two Clark, Parington, Hart, Larry Bond and Stackhouse attorneys, Jeremy Branning and Daniel Harrell. Also attending were a handful of city officials, who had been subpoenaed, including City Administrator Colleen Castille and Communications Administrator Tamara Fountain.

Donovan testified that city officials worried Varona would not leave the airport within the 60-day time frame. He said Varona had acted “irrational” and “disruptive” during the last few months. Donovan estimated if OHM was prevented from starting work for 60 days, the city would lose a minimum of $27,000 in their new contract. The airport director said Varona had failed to cooperate and allow access to his two two lease spaces on the land and air side of the main terminal, so that OHM can begin its work. They want to build a kitchen that is outside de Varona’s airport restaurant, he revealed.

Mayor Hayward who rocked side to side in his chair when he first took the stand, admitted he had not read the lease or Trawick’s letter until Monday. He testified the city wanted to offer Varona an “olive branch,” so they released a press release he and Fountain worked on saying so, while both sides attorneys were in heated negotiations.

“What I did Monday afternoon was call our attorneys and say this is ridiculous,” Hayward said. “We want to help him (Robert de Varona) and be a good neighbor. We have gone above and beyond to do that.”

Hayward said he did not order the city attorney to send Trawick’s letter to Varona. “It would be presumptious to think I read every letter that goes out. We have 800 employees and four enterprises.”

The 71-year-old Varona, who has operated airport concessions since 1972 in Denver, St. Louis, Dallas-Fort Worth, Orlando, Miami and Pensacola, told the court that he needed his 60 days to sell his restaurant assets because it was part of his money for retirement. It was presented to the court that the equipment was worth more to potential buyers, if they are working—losing half their value if they are in storage.

Varona said his current investment in the airport lease is worth $418,000. He estimated he had made $2 million in investments in his food concessions business at the airport. That included spending $1.3 million on the land side restaurant when he was required to only spend $800,000, he said.

“I need to maximize what I have there that I was counting on for my retirement,” he testified comparing it to “spiffing up” a car to sell it.

Varona said he “totally” planned to move out in the 60-day period provided by the city lease. “I have never seen such a chaotic transition.”

Attorney John Trawick, who wrote the city’s March 28 letter giving de Varona 24 hours to vacate the airport and saying the city would remove and store his stuff and charge him for it, testified the letter was a starting point. He maintained on the stand the lease did give the city the power to kick out Varona and not wait 60 days.

The 24-hour eviction “wasn’t a number carved in stone,” Trawick testified. He spent the end of the business day Friday arguing the issue with Varona’s attorney Jesse Rigby. “We didn’t make a lot of headway,” he testified.

  • grandot April 7, 2014 at 11:17 am

    jman- The contract provided that Verona’s shall have 60 days to vacate and that fact and the city’s expectation to honor that clause was reaffirmed through the letter issued on Feb. 11th. Those written items are why the notice from a new attorney acting on behalf of the city on March 28th was a reversal of the city’s stated intent and why the city was found non-compliant with the written terms of the existing contract. The judge found the plaintiff’s complaint had merit.

  • jeeperman April 7, 2014 at 10:35 am

    So without Donovan’s Feb. 11th letter, Bergosh would have ruled in favor of the City?
    That is what I read from the notes.
    If yes, that means Donovan screwed up and granted the 60 day window.

  • grandot April 5, 2014 at 7:56 pm

    Rick- The February 11th letter reaffirming that Verona’s had up to 60 days from the expiration of the vendor contract (March 31,2014) signed by Airport Director Donovan, coupled with Verona’s testimony that he heard Donovan reaffirm those terms during concession discussions with city council, and trusted that the contract terms would be honored seemed to be pivotal testimony. It is amazing that Trawicke testified that he had not reviewed that correspondence, having only read the contract and filed quickly on Friday afternoon pursuant to a call from Mayor’s attorney Messer. Please notice that the legal expenses of the negotiations, hearings and correspondence for at least two law firms separate from the city attorney’s office and the staff time for Hayward, Castille, Fountain, Donovan, and the assistant city attorney present were all wasted because Jim Messer did not correctly review the contract and re-affirming correspondence and council statements made by Donovan. The mayor also stated that he had not seen the Feb. 11th letter nor the March 28th demand to vacate, until Monday afternoon. So much for staying on top of critical city issues! Since this was a legal demand for which city council had determination and approval, it might have also been beneficial if council members had been advised of the potential benefit and viability. But then, that would have been showing the council the respect which it is due under the charter… not much of that going on these days as non-resident staff continue to exercise personal determination which backfires as did the wasteful and harmful demand filing, and the unsubstantiated press release about the city agreement to store Verona’s goods. That false statement was apparently the brainchild of a desperate to be involved City Communication Administrator Fountain, who on the stand remembered little and stated that most of what was being queried was outside her area. She was saved from answering a query about her role in a negative deVerona blog posting which plaintiff attorneys posed to her by a quick objection from barrister Wiggins.

    For the record, Councilman Bare was the only council member in attendance, and “the mayor’s city attorney” Messer who started it all, was not.