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DeSantis Faces Critical Decision on Cruise Ships in Key West

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DeSantis Faces Critical Decision on Cruise Ships in Key West


Since the early days of the coronavirus pandemic, when cruise ships filled with sickened passengers were blocked from U.S. ports, residents in Key West, Fla., have been trying to limit the size and number of vacation vessels on the tiny island, using the momentum created during the pandemic to argue for continuing restrictions on cruise vessels.

Activists flooded City Commission meetings, protested on the dock, collected signatures and managed to pass three ballot measures in 2020 imposing stricter controls to protect the marine environment and limit passengers to 1,500 a day — only to see the state Legislature, with the approval of Gov. Ron DeSantis, void the new restrictions the following year.

Now the wealthy hotelier who operates Key West’s cruise ship port is doubling down, asking the state for permission to expand, which would allow bigger ships with more passengers to operate legally out of the port.

The issue will soon land on the desk of Mr. DeSantis, who has received nearly $1 million in campaign donations from the pier’s owner. It represents a tough balancing act for the Republican governor, a 2024 presidential candidate who has touted his environmental record but has also been a booster of Florida’s tourism industry.

Safer Cleaner Ships, the organization behind the move to keep large cruise ships out of Key West, recently fired another salvo: It filed a whistle-blower lawsuit against the local port owner, Pier B Development Corp., citing state records it said showed the company had underpaid millions of dollars in state fees and taxes. The Florida attorney general’s office dismissed the suit in part on jurisdictional grounds, a decision that activists said was a sign of continuing state support for a campaign donor, the owner of one of the country’s largest private hotel chains.

For Mr. DeSantis, whose policies are under scrutiny during the presidential campaign, a decision on whether to authorize expanded cruise ship operations calls for weighing environmental concerns as well as potential revenues from his state’s biggest industry in a petition that comes from a major campaign donor.

The issue has been a contentious one in Key West, with many people whose livelihoods depend on cruise ship visitors accusing the ballot measure proponents of “class warfare” and of not welcoming the lower-income tourists who book passage on the giant vessels. Local retail outlets, tour guides and harbor pilots argued that hotels on the island are expensive and cruise ships open the area to people who might not otherwise be able to afford to visit.

The cruise industry, meanwhile, quietly funded a campaign against the 2020 ballot measures, The Miami Herald reported, warning residents that a reduction in cruise ship revenues could lead to drastic cuts in policing and other public services.

Before the pandemic, nearly a million people a year were visiting Key West aboard cruise ships. But when Covid-19 brought that to a halt, the city’s $2.4 billion tourism industry — responsible for 44 percent of its jobs — did not collapse.

Instead, hotel tax revenue rose 15 percent, and with 1.4 million arrivals, the airport set a record in 2021.

“People said, ‘If you limit cruise ships it will kill business! Jobs!’ That’s been proven false by the passage of time,” said Arlo Haskell, one of the anti-cruise ship group’s founders.

The activists have focused on the waters around the Florida Keys, which they argue improved significantly during the pandemic without a constant stream of cruise ships churning up sand and threatening coral reefs — an argument that resonated for a broad range of Key West residents.

Safer Cleaner Ships collected 2,500 signatures on the ballot measures to change the city charter; they each passed with majorities of over 60 percent.

In the months after the election, 11 companies owned by the pier operator, Mark Walsh, donated a total of nearly $1 million to Mr. DeSantis’s political committee, The Miami Herald revealed.

Months later, Mr. DeSantis signed legislation that prohibited any local ballot measure from restricting marine commerce. Opponents were outraged, with many publicly calling it “pay to play.”

Mr. DeSantis’s office declined to comment on the issue, as did Mr. Walsh, whose lawyer, however, said the companies’ donations were in support of the governor’s general pro-tourism stance, especially during Covid-19.

In response to concerns that cruise ships were damaging coral reefs, Mr. Walsh urged the city in a 2021 letter to “look at the science, and what is currently being done to restore the reef environment,” an effort to which he offered to contribute.

The city settled on a compromise, prohibiting ships from mooring at the two docks the city controls. That left the privately owned dock, Pier B, operated by Mr. Walsh’s company, as the only dock available to cruise vessels. The cutback resulted in a 50 percent drop in cruise ship traffic, an outcome the anti-cruise ship activists saw as positive but which tourism business owners described as a substantial blow.

Edwin O. Swift III, president of Historic Tours of America, said his business, which offers trolley tours of the city, has been down 40 percent.

“The whole thing is being mishandled by the politicians,” he said.

The Safer Cleaner Ships group decided to dig further into the cruise dock company’s operations, and after combing state databases, filed a lawsuit alleging that the company had misreported the revenue it had earned. Using the amount of disembarkation fees Pier B had paid to the city, the group calculated that the company had underpaid the state at least $5 million in lease payments and “hundreds of thousands more” in taxes from disembarkation fees. “That’s the public’s money,” Mr. Haskell said.

The lawsuit was filed under seal in 2022 as a whistle-blower case under the Florida False Claims Act, which empowers citizens to sue on behalf of state or local governments. The state attorney general’s office unsealed the suit last week, telling The Times that the state had investigated the matter and decided not to pursue the case.

Chase Sizemore, a spokesman for the office, said the group’s claims were not within the jurisdiction of the False Claims Act, and that many of the allegations regarding lease fees had been “investigated and lacked merit.” The tax revenue allegations, he said, had been referred to the appropriate agency for follow-up.

Jon Moore, a spokesman for the Florida Department of Environmental Protection, the agency that manages the lease, said a recent audit found “no issues” of concern related to the whistle-blower claims.

Pier B officials said they only recently learned of the tax and fees lawsuit. Matt Redstone, an assistant controller at Mr. Walsh’s company, Ocean Properties, said that it had paid all fees owed to the state.

Bart Smith, a lawyer who represents Mr. Walsh in Key West, said claims made by Safer Cleaner Ships in its lawsuit were “false and without merit,” adding that the company had corrected the manner in which it reported revenue.

“Unfortunately, there is one group who is willing to disparage and cast false statements or misrepresentations without consequence in order to meet their political aims and financial pursuits,” Mr. Smith said. “Pier B will continue its efforts to support the Key West community, environment and especially reef restoration in the Florida Keys.”

Already, ships larger than what is allowed under Pier B’s existing lease with the state have been docking in Key West, a fact that came to light when cruise ship opponents last year photographed a number of large ships docked at the pier and reported it to state and federal authorities.

Mark Kincaid, an engineering consultant who works for Mr. Walsh, acknowledged that ships larger than what was allowed under the lease were docking at the pier, a legacy of practices that he said began before the city closed its own docks to cruise ships.

The company’s latest request for more space is designed to bring it “into compliance” but will not make any practical difference, Mr. Kincaid said.

The state last year issued a temporary permit allowing the expansion to accommodate bigger ships, but it expires in June.

The issue of what, if any, environmental damage is caused by cruise ships continues to be a contentious one. Each side has competing scientists arguing its point.

William Precht, a coral reef specialist hired by Mr. Walsh, provided photographs showing living coral reefs even at the dock where the ships port. Any sand kicked up by the ships dissipates before it can damage the reefs, he said.

“In my 40 years of working on the Florida reef tract, there haven’t been any reefs killed by cruise ships,” he said.

The Florida Keys Marine Sanctuary, a federally administered agency charged with protecting waters in the area, said in a statement that studies showing healthy reefs growing vertically on the pier do not take into consideration the coral on the sea floor that may be harmed by sand churned up by the ships.

And other scientists have cautioned that the sand threatens even coral reefs that are further from the port. “That channel is not Vegas: What happens there doesn’t stay there,” said Henry O. Briceño, director of Florida International University’s Water Quality Monitoring Network, who conducted a study on the area that has been cited by cruise ship opponents. “What happens there goes to the coral reef.”

The governor, who has called the reefs a “state treasure,” is expected to make a decision with his cabinet in December.



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