DATE: September 10, 2013 RE: Seawall Review - Park Shore - Preliminary Legal and Title Review Report

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1 TO: FROM: CC: Hon. John F. Sorey III, Mayor & Naples City Council Stephen E. Thompson & Robert D. Pritt A. William Moss, City Manager DATE: September 10, 2013 RE: Seawall Review - Park Shore - Preliminary Legal and Title Review Report I. Assignment This is in response to an assignment by the Naples City Council to review the status of certain seawalls located within the City that may lie in whole or in part outside of the boundary of the adjoining upland properties. II. Facts Presented. The Plat of Park Shore Unit 2 1 ("Unit 2 Plat") and the Plat of Park Shore Unit 5 2 ("Unit 5 Plat") as well as other recorded and unrecorded documentation, show that a seawall of about 2 feet in width is generally located within a 3-foot wide platted series of outlots that are privately owned (being outlots A through F ). Those outlots are located as shown on the Unit 2 Plat and the Unit 5 Plat outside of the Gulf Shore Boulevard right-of-way. Attorney Neil Gregory, on behalf of The Lutgert Companies (the successor in interest to The Scottsdale Co., a Florida corporation ( Scottsdale Co ) and Park Shore, a Florida general partnership ( Park Shore Partnership ), provided newly commissioned surveys ( Lutgert Surveys ) that show the seawall meandering from lying totally within the platted outlots to encroaching outside their boundaries and within the Gulf Shore Boulevard right-of-way from a few inches to as much as 1 ½ feet. Mr. Gregory asserts that the seawall is owned by the City and that therefore the City has the responsibility for maintenance, repair and replacement of the seawall. In May 2012, City staff prepared a report that summarizes their review of several recorded documents associated with the development of Park Shore. The City staff concluded that: (i) the seawall in question is privately owned; (ii) responsibility for maintenance, repair and replacement is the sole obligation of the private owners; and 1 Plat of Park Shore Unit 2, recorded in Plat Book 8, Pages 54 and 55, of the Public Records of Collier County, Florida. 2 Plat of Park Shore Unit 5, recorded in Plat Book 12, Pages 39 and 40, of the Public Records of Collier County, Florida.

2 Page 2 of 7 (iii) any seawall encroachment into the public right-of-way (canal, or water) does not constitute a change in ownership from private to public. If the City has or were to accept seawall ownership and responsibility for its maintenance, repair and replacement, the estimated costs to the City and its taxpayers would be significant. City Council has requested a legal and title review of seawalls in Park Shore Units 2 and 5, in response to the contention by The Lutgert Company, that the responsibility for failing seawalls belongs to the City rather than to the current outlot owners, or their respective associations or predecessors in title. III. Issue Presented. Does the City have a legal ownership of, and a duty to maintain, repair, and replace the seawalls located in Park Shore Unit 2 and Park Shore Unit 5 along Venetian Bay? IV. Conclusion. No. From the recorded documentation, surveys, and other materials reviewed to date, it is our conclusion that the original developers intended that, and in fact provided in the two pertinent declarations of condominium for, the seawalls to be common elements of the condominiums formed in Park Shore, and that the ownership of the seawalls is vested in the owners of the units in these condominiums, and that the responsibility to maintain, repair and replace is placed expressly on the respective condominium associations. Further, there is no evidence that the City ever accepted, owns, or is responsible for replacement of such seawalls. V. Discussion and Analysis. The following documents have been supplied to this firm by George Archibald, P.E., of the City, and reviewed in connection with the foregoing determination: 1. Plat of Park Shore Unit 2; 2. Plat of Park Shore Unit 5; 3. Portions of Park Shore Construction Plans for Gulf Shore Boulevard; 4. Several miscellaneous Park Shore subdivision documents and deeds of records; 5. Annexation documents (Resolution and related Annexation Agreements) 6. Venetian Bay Yacht Club Plot Plan, recorded in Official Records Book 29, at Page 45, of the Public Records of Collier County, Florida ( Venetian Bay Yacht Club Plot Plan );

3 Page 3 of 7 7. Venetian Bay North Yacht Club Plot Plan, recorded in Official Records Book 31, at Pages 14 and 15, of the Public Records of Collier County, Florida ) Venetian Bay North Yacht Club Plot Plan ); 8. Declaration of Condominium for Venetian Bay Yacht Club, a condominium recorded February 10, 1987, in Official Records Book 1249, at Pages 864 through 865, inclusive, of the Public Records of Collier County, Florida ( Venetian Bay Yacht Club Declaration ); 9. Declaration of Condominium for Venetian Bay North Yacht Club, a condominium recorded February 10, 1987, in Official Records Book 1334, at Pages 1990 through 2020, inclusive, of the Public Records of Collier County, Florida ( Venetian Bay North Yacht Club ); 10. Easement granted by Venetian Estates, Inc. to Venetian Bay Yacht Club Condominium Association, Inc. recorded February 10, 1987 in Official Records Book 1249, at Pages 926 through 928, inclusive, of the Public Records of Collier County, Florida; 11. Park Shore Affidavit of Dissolution recorded in Official Records Book 3081, at Page 0239, of the Public Records of Collier County, Florida; and 12. The Lutgert Surveys. Mr. Archibald's historical research confirmed that the seawall improvements were in place prior to platting (see Document Review memorandum dated May 23, 2012 authored by George Archibald, P.E.). The Lutgert Surveys confirm that the seawall width is approximately 2 feet, that the seawall is generally located within the platted "outlots," with a width of 3 feet (with meandering encroachments of the seawalls outside the platted outlot boundaries of anywhere from less than an inch up to approximately 1 ½ feet here or there over the length of the seawalls), and that the outlots and seawalls are outside the platted right-of-way of Gulf Shore Boulevard (except for the minor variations previously noted). It is apparent from the dedication language on the face of the Plat of Unit 2 and Unit 5 that the only public dedications were to reserve to the public, the right-of-way and easements. Consequently, there is nothing contained in the plat dedication language of either plat that dedicated or conveyed the seawalls or maintenance responsibility for them to the public. The platted "outlots" as well as the waterways were (insofar as the plats provided) retained in private ownership by the developers (hereinafter, Scottsdale Co and Park Shore Partnership are referred to collectively as the developers ). The Unit 2 Plat shows the Gulf Shore Boulevard right-of-way having a width of 110 feet, and depicts the width of the two platted "outlots," A and B, as 3 feet. It also creates a drainage easement over the "outlots" and shows the right-of-way line and seawall line as coinciding in the same location. The Unit 5 Plat likewise sets out the typical 110 foot right-of-way of Gulf Shore Boulevard and depicts the four "outlots" (C, D, E and F) outside of and adjacent to the

4 Page 4 of 7 road right-of-way. The width of the outlots is shown as 3 feet. The Unit 5 Plat does not impose any easements on the outlots it created. The Construction plans for both Park Shore Unit 2 and Park Shore Unit 5 prepared by Wilson Miller, referred to as "Development Plan Set" with (as to Unit 2) 1969 and 1970 updates, shows the right-of-way boundary line as the east edge respectively of the sidewalk (as to Unit 2) and the 10 foot sidewalk/planter strip (as to Unit 5). This consequently places the seawall outside the right-of-way line of Gulf Shore Boulevard. These construction plans also designate the existing bulkhead line outside the right-of-way and show the bulkhead width at 2 feet, and the bulkhead line is considered to be the seawall line. Riparian rights (i.e. including the right to attach docks to upland) are defined in Florida Statutes Section (1) as " rights inuring to the owner of the riparian land They are appurtenant to and inseparable from the riparian land." (Florida Statutes Section (2013).) 3 Further, it is clear under a review of the statutes pertaining to leasing of sovereign submerged land for residential multi-slip docks, including dockominiums (whether or not a public permit is required) that the right to attach a dock to the upland belongs only to the owner of at least some upland parcel. See for instance, Florida Statutes Section and Florida Statutes Section (no permit required). Further, under the Florida Administrative Code Rules, Rule 18:21.004(1)(c) and (d) state explicitly that there must be (in order to have the right to construct a dock) "sufficient upland interest" held in fee simple (see also Florida Administrative Code Rule 18:21.004(3)(b)). When the initial developers of the Park Shore area, created the condominiums for Venetian Bay North Yacht Club and Venetian Bay Yacht Club, they created them with the docks being depicted as connecting to the outlots and physically attached the docks to the seawalls within the platted outlots. The respective plot plans and condominium declarations (with exhibits showing the same details as the plot plans) were recorded as is required under the Florida Condominium Act. The reason for creating the condominiums with the boat slips being physically attached to the seawalls within the outlots is that these two condominiums are essentially "dockominiums". The units are exclusively boat slips that were sold to members of the public. To form such a "dockominium", the condominium could not be formed without the boat slip docks constituting the units being physically connected to actual fee simple upland real property. Based on the dedication of the Unit 2 Plat and the Unit 5 Plat, the only real property to which the two sets of boat slip dockominium units could attach were and are 3 The most recent and thorough explanation of the ownership and nature of riparian rights is in the Florida Supreme Court case of Walton County v. Stop the Beach Renourishment, Inc., 998 So.2d 1102 (Fla. 2008), affirmed by the U.S. Supreme Court sub nom Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, 560 U.S. 702, 130 S.Ct (U.S. Fla., 2010).

5 Page 5 of 7 the seawalls within outlots as dedicated on the Unit 2 Plat and the Unit 5 Plat 4. Accordingly, when one reviews the condominium plot plans recorded for each of the two condominiums, the reviewer can see that the condominium parcels are depicted as coinciding with the outlots. For instance, Venetian Bay North Yacht Club is denoted on the face of the condominium plot plan as "being part of outlot 'D', part of outlot 'E' and part of Venetian Bay of Park Shore Unit No. 5 ". Further, the locations of the outlots to which the boat slips are attached physically come right up to and attach to the seawalls located within the respective outlots. The only other portion of the upland they could attach to would be the publicly dedicated Gulf Shore Boulevard 110 foot right-of-way. This, of course, would not permit them to be created as a condominium under Florida's Condominium Act because the developers would not have owned, after the plat dedications, any interest whatsoever in the publicly dedicated Gulf Shore Boulevard right-of-way. Consequently, the only real property to which the dockominium slips could be attached was and is to the seawalls affixed permanently upon the platted outlots. It is basic real property law in Florida (not to mention other states) that fixtures attached to real property (in the absence of a contrary intention being expressly set out) become part of the real property and are owned by the owner of the real property. Accordingly, when the seawall was attached to the soil underneath the seawall's current location, it became as a fixture to real property owned by the owner of the outlot, i.e. the developers prior to the plats being recorded. Each declaration of condominium defines the common elements of the condominium property as being: "5.2 Common Elements. The term "Common Elements" as used herein, shall mean and comprise all of the following real property of the Condominium except Units including: (4) fixtures owned or held for the common use, benefit, and enjoyment of all owners of the Units in the Condominium; and (5) all pilings and boat dock structures. 4 The boat slip docks could not attach to the paper outlots because the outlots alone are not real property capable of being owned and conveyed if they were submerged, as that submerged land being naturally subject to tidal influence (as shown on aerial photos from the past provided by Mr. Archibald) would not have belonged to the developers. Instead the submerged area would have belonged to the Trustees of the Internal Improvement Fund of the State of Florida. By placing concrete seawalls within the outlots, the seawalls constitute fixtures attached inseparably to the underlying real property and therefore become part of it and are capable (assuming construction in the right time periods, etc.) of being privately dedicated and owned. In the event the outlots were located on an area that was excavated, then they would have been capable of private ownership, however, the Lutgert Co. has not asserted any contention in that regard to the present. Furthermore, without evidence of acceptance of the seawalls, what normally might be considered a lawful fixture under real property law, is perhaps nothing but an unlawful (unauthorized) encroachment as applied to the government. Without evidence of acceptance by the government, a dedication, like a conveyance, is ineffective.

6 Page 6 of 7 See Venetian Bay Yacht Club Condominium Declaration Section 5.2 at Page 2 and Venetian Bay North Yacht Club Condominium Declaration Section 5.2 at Page 2, which have identical language. Since the seawalls are essential to the formation of each condominium, and were clearly intended by the condominium developers, the Scottsdale Co., in the case of Venetian Bay North Yacht Club and Park Shore, a Florida general partnership, as developer of the Venetian Bay Yacht Club Condominium, it is clear that their joint intent was to make the seawalls a part of the Common Elements of each condominium, because the seawalls are fixtures to the real property under or comprising the outlots and they are held for the common use, benefit and enjoyment of all owners of units within the condominium (in spite of seawalls not being mentioned expressly at that location in the Declaration). Further light on whether the seawalls were intended by the developers to be part and parcel of the condominium Common Elements is expressly set forth in Section 12.1 of each Declaration of Condominium. In both of these dockominiums, the sections are identical in this regard, reading as follows: "12.1 By the Association. The Association shall maintain, repair and replace at the Association's expense all of the Condominium Property including the boat dock Units, Common Element docks, piers, seawalls and pilings, and all Common Elements, except for reimbursement by Unit owners for any expenses to repair or replace any of the Units or Common Elements which are incurred as a result of negligence of the Unit owner or his guests, invitees, employees or agents. (emphasis added)". See Venetian Bay North Yacht Club Condominium Declaration Section 12.1 at Page 15, and Venetian Bay Yacht Club Condominium Declaration Section 12.1 at page 15. From the quoted language of Section 12.1, the seawalls are clearly part of the " Common Element docks, piers, seawalls and pilings ". Thus, the developer in the case of each condominium clearly intended that the seawalls were part of the Common Elements of the condominium and that the Association must maintain, repair and replace them, rather than the individual boat slip owners unless damage to those Common Elements resulted from actions or negligence of a Unit owner or anyone for whom the boat slip unit owner is legally responsible. Consequently, the condominium plot plans and condominium declarations both indicate conclusively that the several outlots were owned by the condominium developers when these condominiums were created, and that but for those outlots (as upland) being so owned the dockominiums could not have been legally created. The declarations language further is conclusive evidence that the seawalls, which were intended to coincide with the outlots in location, were also directly and expressly set up and included expressly as Common Elements of the condominiums. The fact that in certain locations the seawalls as constructed meandered outside of the platted outlots, from less than an inch in some locations to as much as a 1 ½ in other locations, does not alter that conclusion or the legal ownership and responsibilities attendant to the seawalls.

7 Page 7 of 7 Further, in the general notes on each of the condominium plot plans, General Note 3 states: "all pilings and boat dock structures are common elements. All areas within the condominium boundaries and exterior to units are common elements." Clearly, the seawalls as areas that coincide with the outlots (i.e. within their boundaries, with very de minimus variations) are therefore intended to be common elements given they are outside the units (i.e. the boat slips themselves) and within the condominium boundaries. As the reviewer tracks around the sketch shown on the plot plan of each condominium property, the point of beginning commences at a corner of the particular outlot and then continues around it including the boat slip unit areas. For instance, the point of beginning of Venetian Bay North Yacht Club starts at the "northwest corner of outlot "E" and then continues around the boundary of Gulf Shore Boulevard inclusive of the areas comprising the boat slip dockominium units. This is likewise the case for the condominium plot plan for Venetian Bay Yacht Club. The same depiction on the condominium plot plan sketch of Venetian Bay North Yacht Club shows that the portion related to outlot D shown on the sketch commences with a point of beginning located at "the northwest corner of outlot 'D' and then proceeds to tract down the boundaries of outlot D and back around including the dockominium boat slip areas. This pattern is replicated with every outlot. Thus, the common elements in each case clearly are intended to include the outlots and also the seawalls as "Common Elements" which are part and parcel of the ownership of the condominium. Each unit owner in acquiring their title to a condominium boat slip unit also received an undivided interest in the Common Elements. Therefore, the outlots and the fixtures within them, i.e. the seawalls, are owned by the condominium unit owners. In conclusion, the clear intent of the initial developers of Park Shore, whether in the "person" of Scottsdale Co. or Park Shore Partnership, was that the seawalls would function as the physical upland to which the boat slip dockominiums would be attached enabling them to be formed as condominiums under the Florida Condominium Act. The platting of the outlots and construction of the seawalls within them was intended to incorporate the seawalls within the boundaries of the perimeter of each of the respective outlots. This is amply demonstrated by the condominium plot plans and declarations in each case, and is also supported by the plats and Lutgert Surveys. The fact that the seawalls meanders out to one small degree or another of the platted outlot boundaries, is de minimis and not dispositive of the ownership or maintenance responsibility in regard to the seawalls. The substantial weight of the available evidence demonstrates amply that the seawalls are fixtures within the boundaries of the platted outlots and that the platted outlots and seawalls (being basically one and the same) are owned as undivided common element interests by the unit owners of the condominiums _