From Millions to Mere Thousands

by Richard Luthmann

In December 2023, Beach Talk Radio first reported a “Sweet-heart Deal” involving Fort Myers Beach property developer Terry Persaud and the Town Council, stirring significant interest and debate. This global settlement, seen as a pivotal development in Persaud’s long-standing disputes with the town, has two distinct sides that merit attention. 

Sun Bay Paper took the initiative to delve deeper into this story, sitting down with Terry Persaud to hear his perspective. Persaud, known for his ambitious Times Square property development, including the Sunset Beach Tropical Grill and The Playmore Tiki Bar and the adjoining parking lot, shared his viewpoint. 

Attempts were made to gather insights from other players to ensure a comprehensive understanding of the situation. To present a balanced view, we contacted FMB Mayor Dan Allers and TPI Properties/Margaritaville Beach Resort representatives. 

Acquisition and Regulatory 

In 2014, Terry Persaud embarked on a significant property development project by acquiring the Times Square property through Persaud Properties FL Investments LLC. This purchase, totaling $3.5 million, included a vision for an additional $1 million improvements. 

Challenges 

However, Persaud’s plans were quickly met with stringent regulatory challenges. The FMB Fire Department immediately required $500K worth of work to bring the property up to code. Persaud expressed frustration, stating, “I was caught between a rock and a hard place,” highlighting the immediate conflict between his development plans and regulatory demands. 

Compounding this issue was the “50% Rule” from the National Flood Insurance Program (NFIP), which restricts improvements on a property to no more than 50% of its market value unless it is fully compliant with current flood regulations. For Persaud, this rule presented a unique dilemma. Although he purchased the property for $3.5 million, the existing structures were valued at only $800K. This valuation meant his budget for improvements was effectively capped at $1.2 million. The Fire Department’s mandated improvements cost $100K more than the amount re-quired to make the site operational. 

Faced with these constraints, Persaud sought relief from the Town Council in October 2014, but his appeals were met with no reassessment or relief. This denial set the stage for a prolonged battle between Persaud and the town authorities. 

Legal Struggles and Permitting Issues 

Persaud received relief from Lee County, which reduced the scope of needed work. The primary issue Persaud faced was obtaining the necessary permits for development. He initially secured a DEP Field Permit to begin work in February 2015. However, this progress was abruptly halted when the Town issued a “Stop Work Order” in May 2015, demanding a more comprehensive “Full” DEP Permit. Reflecting on this setback, Persaud stated, “The Full Permit takes much longer. I lost another four months.” This requirement significantly delayed his plans, as the Full Permit process was considerably more time consuming than the Field Permit. 

Moreover, Persaud had a legal battle concerning revoking his liquor license for beach service. The Town’s decision, based on a code that labeled his property as “abandoned,” was firmly contested by Persaud. He argued that his property was not abandoned but “Under Construction.” This dispute escalated into a lawsuit against the Town, which initially did not rule in his favor. However, in a turn of events, Persaud stated, “Initially, we lost in Lee County in 2018. But the Second Circuit District Court of Appeals reversed the decision in 2019,” marking a significant victory for him in asserting his property rights. 

Allegations of Discriminatory Treatment and Fines 

Persaud’s challenges escalated into allegations of discriminatory treatment and unfair imposition of fines by Fort Myers Beach authorities. These issues, emerging alongside the permitting and legal struggles, added another layer of complexity. 

Persaud alleged he faced significant financial penalties, which he argued were imposed in a retaliatory and discriminatory manner. Persaud’s frustration with the town’s approach was evident in his statement, “I was receiving fines of $250 to $500 per day based on the dumpster, parking charges, and beach chair and umbrella rentals.”  

Many of the imposed fines are related to the parking lot. Persaud claimed that the requirements imposed on him were more stringent than those for other property owners. “The parking lot has been there since the 1970s. All they need is a Use Permit per the Town Code for any other restaurant. For me, they required a Full Order, which is much more time-consuming and expensive and would have reduced the lot capacity by 30 percent,” Persaud explained, highlighting the discrepancies in treatment. 

Persaud sued the town for lost revenue, claiming that the town’s actions amounted to discrimination and a violation of his equal protection rights. However, this case was ultimately dismissed by U.S. District Court Judge John Badalamenti in February 2023. 

Recent Developments: A Sweetheart Deal? 

In December, the Town Council offered Persaud what has been termed a “sweetheart deal,” substantially reducing the fines he was required to pay. Initially facing a staggering $2.7 million in penalties, the Council proposed to lower this amount to $250,000. A “good faith” bond of $500,000 was included in the deal, which Persaud would be eligible to release if he maintained compliance with the town’s regulations for one year. 

Persaud said he told the town attorney the original fines, if pressed, would face court challenges. “They would be challenged, and they don’t have the backup” the developer stated, suggesting potential issues with the legality or enforceability of the penalties.  

Expressing his dissatisfaction with the prolonged dispute and the nature of the agreement, Persaud said, “This has been going on way too long. I have gone above and beyond to create an agreement I don’t agree with.”  

This sentiment was met with concern from Mayor Dan Allers, who responded, “That was a little concerning. You’ve done this before. For 4-5 years, we’ve been dealing with this. It’s been a matter of compliance. It’s the simple things that you agreed to do.” 

As part of the agreement, Persaud must remove a large tree stump from the property, a point of contention for years. The Council mandated a strict timeline for this task, giving him 60 days to apply or the permit and 30 days following receipt to remove the stump. 

Code Compliance and Property Inspections 

Persaud’s battle with the town over the use of his property was central to the compliance issue. Initially, Persaud faced allegations from the town for renting beach chairs behind his restaurant and operating an “unauthorized” parking lot adjacent to the Sunset Grill Restaurant. Town employees were even sent in “undercover” to rent beach chairs and pay for parking, a move aimed at proving his violations. Persaud objects to the legality of this practice. “Town employees are not authorized to do undercover investigations. That is a job for law enforcement, and all fines based on that practice were invalid,” he said. 

Addressing these concerns, Fort Myers Beach Operations Man-ager Frankie Kropacek confirmed a positive change in Persaud’s compliance status. Kropacek stated, “Persaud is now 100 percent in compliance.”  

Furthermore, the town revised its stance on the legality of Persaud’s parking lot. Previously declared illegal and restricted only for restaurant customer parking, the lot has since been opened to the general public. This change aligns with the varied usage of the lot, which has historically catered to the beach-going public with seasonal rate changes. 

As part of the settlement agreement with the town, Persaud’s properties will undergo regular inspections to ensure continued compliance. If Persaud fails to adhere to the regulations, he will be issued a courtesy warning notice to rectify the violation. Failure to address these violations would escalate the matter to the town’s Magistrate for a ruling. Persaud risks forfeiting the $500,000 bond included in his settlement agreement in such a scenario. 

Future Outlook 

The resolution of Persaud’s protracted disputes with the Town Council not only marks an end to his legal and regulatory battles but also sheds light on broader concerns. 

Persaud expressed concerns about the dynamics between local businesses and larger entities. He specifically mentioned Tom Torgeson and TPI, suggesting a perceived imbalance in the treatment of different developers. Persaud boldly asserted, “Our location on the beach is the best. The Town can’t play favorites. There is a divided loyalty to Tom Turgeson and TPI.”  

Invoking Margaritaville, Persaud alleged inconsistencies in code enforcement. He charged, “Margaritaville is not ‘up to code,’ but their violations are being ignored.”  

Is there a double standard in how regulations are applied within Fort Myers Beach, favoring more prominent developers at the expense of smaller ones? Persaud believes so and wants equitable treatment and opportunities for all businesses, regardless of their size or influence. 

In response to Persaud’s claims, attempts were made to contact FMB Mayor Dan Allers and representatives of TPI/Margaritaville for further comment. However, as of press time, only Margaritaville /TPI has responded to our inquiry with “no comment.”

The final deal has not been inked as of press time. Hopefully, the conclusion of Persaud’s acrimony with FMB officials is more than just a settlement of fines and compliance issues. The entire town could use this moment to have conversation about the broader context of development, the role of small businesses, and the need for equitable treatment in the face of larger projects, particularly in the aftermath of Ian. As Fort Myers Beach recovers and evolves, balancing different interests and the commitment to fair and transparent governance will be crucial.