Tampa developer revives $6.6 million lawsuit against city after hotel was denied

After hearing the concerns of Harbour Island residents, Tampa City Council twice voted against a developer’s proposed hotel in 2022. In response, he's taking the city to court.

Hillsborough County court documents show that Punit Shah’s Liberty Hospitality Group is once again pursuing a lawsuit that seeks $6.6 million in damages from the City of Tampa.

The lawsuit was initially filed in July of last year, after city council first voted against the proposed AC Marriott Boutique Hotel, which was planned for 800 S Harbour Island Blvd., just feet away from the residential community’s entrance gates. But the lawsuit was put on hold, pending discussions with the city and Harbour Island residents.

In public mediation sessions, Liberty Group’s attorneys said they wanted to give council a chance to reconsider the vote before taking next steps in the lawsuit. On Dec. 15, council met again to reconsider the hotel with the possibility of legal action hanging over the city.
Shah—who donated $5,000 to Mayor Jane Castor’s election campaign in 2019 and who attended Castor’s mayoral campaign launch event last December—had offered to reduce the size of the hotel as a compromise. A special magistrate judge supported changing the size of the hotel from 12 stories to 10, along with some other compromises to potentially help reduce traffic and congestion for the nearby community.

Still, after residents filled council chambers to present concerns over zoning, traffic, safety and noise, council voted the hotel plans down 4-3. Councilmen Luis Viera, Orlando Gudes, and Joseph Citro voted to approve the hotel, while the rest of council voted against it.

“We are disappointed with the City Council’s decision this evening, particularly since City of Tampa staff recommended approval twice,” Shah wrote in a press release after the vote. “The hotel would have created desperately needed jobs in our community, built tourism, and boosted the local economy. It is disappointing that this City Council will not support our efforts to enrich the Harbour Island and downtown Tampa community.”

Shah added that he hoped council would reconsider their decision in future board meetings. Four days later, he filed to have the hold on his company’s lawsuit against the city removed. On Dec. 21, the motion to lift the hold was approved by Judge Anne-Leigh Gaylord Moe. According to a court document, the city has until Jan. 31 to respond to the lawsuit.

The main law firm representing Shah is Stearns Weaver Miller, but a court document shows that on Dec. 19, Ethan J. Loeb was added as additional counsel. Loeb was one of the attorneys who forced the resignation of former city councilman John Dingfelder in a public records lawsuit.

Last March, a public records request revealed that Loeb was in regular contact with City Attorney Gina Grimes who used her personal cell phone to discuss the lawsuit with him, even though she declined to represent Dingfelder. Grimes resigned six months later.

Loeb also represented a City of Tampa employee who accused Councilman Gudes of hostile and toxic workplace behavior and sued him. The case against Gudes was dismissed in Hillsborough County court last year, but not before city attorneys paid the accuser $200,000 before any lawsuit was filed against the city.

"It is unfortunate that a developer's playbook if denied is to sue the City and hire Ethan Loeb,” Larry Premak, President of the South Neighborhood Association (SNA) wrote in an email to Creative Loafing Tampa Bay. “It goes against everything great developers like Jeff Vinik do; who involve the community instead of alienating residents."
Premak said that residents of Harbour Island trust that the legal process will see that their concerns about the hotel are valid.

"The city council has twice denied Liberty,” said Premak. “It is clear that this request for a zoning exception is to fundamentally change Harbour Island and turn Knight's Run into an Atlantic City Boardwalk. We trust the courts will find this lawsuit to be without merit."

Shah and Loeb declined to give comment for this story.

Harbour Island resident Susan Doyle told CL that the anger and frustration of Harbour Island residents at the second public hearing was “palpable” and that many who live in the community felt pushed aside by city staff.

“City Planners began their presentation by ignoring the 657 homes and nearly 3,000 residents who live south of Knights Run Ave,” Doyle said. “They only showed images of the area north of Knights Run with the high rises. They made us invisible!”

Leading up to the December meeting, residents of Harbour Island had also been advised by city legal staff that they shouldn’t voice concerns to city council members due to the pending litigation—even though the First Amendment is supposed to protect the public’s right to air grievances to their government.