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'A mistake has been made:' Vero Beach calls special meeting, may disqualify Three Corners applicant

City Council will give developer SuDa opportunity to show cause why its proposal should not be disqualified
Posted at 7:43 PM, Jun 06, 2024

VERO BEACH, Fla. — It's a controversial decision that is facing even more contention.

At issue is Vero Beach's "Three Corners" project: waterfront property that could shape Vero Beach.

The developer that won the winning bid for the project may be disqualified.

Vero Beach City Council has called a special meeting to give developer SuDa the opportunity to show cause why its proposal should not be disqualified, according to city documents.

The city accepted the company's $140 million proposal May 28. The announcement was about five years in the making.

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As early as 2018 the city has talked about turning the 33 acres of land on the Intracoastal Waterway — once home to the city's former power plant, water treatment plant and post office — into a waterfront destination.

In August 2023, the city issued a Request for Proposal (RFP) to seek developers for the task. Then in April, a city committee narrowed the choices down to the following four top applicants:

Just like that, the plant's stranded smokestacks and forgotten fencing, once the city's source of power, again became the object of its energy and the center of controversy.
"I think everybody has an idea of what it should be," Joey Lucchini of Joey's Downtown Dapper Barbershop said.

On May 17, a clear front-runner emerged.

A committee of city and business leaders tasked with making a recommendation to the city choseClearpath's proposal and had half a million reasons to do so.

The developer promised to pour $500 million into its proposal, which was more than double what the three other developers promised to pay and far surpassed SuDa, Crec Capital and Madison Marquette's joint $140 million proposal.

Yet on May 28, the city council ranked each proposal via a point system and chose SuDA, which beat out Clearpath by one point.

"And if I remember correctly, I think a lot of citizens liked Clearpath over the other one," Vero Beach resident Jayme Mariano said.

Since that vote, the city has released emails showing on May 27, the day before council members made their decision, SuDa's company leader, Gauruv Butani, sent an email to the city addressing concerns he saw on social media regarding his vision for a splash pad and skate park. He also addressed concern over the proposal's environmental impact.

In another email sent the day of the vote, Butani touted an endorsement from New Jersey's governor.

Yet the city's Request for Proposal directions were explicit:

"Potential and actual proposers shall not solicit or otherwise communicate in any manner whatsoever, directly, or indirectly, with the City Council, City Manager, evaluation committee members, or City staff, other than Purchasing Division personnel, regarding this RFP from the time of the RFP initial advertisement through the completion any agreements executed with any selected developer and operator. Any such solicitation or communication shall result in disqualification of the Proposer.”

In other words, the developer can't communicate with or solicit city staff about their proposal until after the bid is awarded.

"Not allowed. It's specifically spelled out in the RFP," Mayor John Cotugno told WPTV reporter Kate Hussey. "A mistake was made. We did not address it. It's clearly spelled out, and we need to address it now."

Cotugno said he wasn't sure why it wasn't addressed to begin with.

In another email released by the city, third-place developer Vista Blue's company head, Donald Urgo, complained he felt SuDa was given an unfair advantage, claiming a conflict of interest.

In 2018, Colliers, the real estate company working with the city to seek out applicants, acquired SuDa's partner, CREC Capital.

In an email back to Urgo, the city said once they realized the conflict, they severed the relationship with Colliers.

Clearpath had a similar conflict of interest, which they disclosed in their 218-page proposal, but Vista Blue claimed SuDa didn't, and we couldn't find it in the document, either.

"Is that also an issue that could disqualify this candidate?" Hussey asked Cotugno.

"That, I think we'll bring up in the meeting," Cotugno said.

WPTV contacted Butani, who told Hussey he wasn't able to comment on the allegations but did provide the following statement, reading in full:

"Our beautiful and sustainability driven project, is what the Vero community wants. It will be enduring, loved not only when it is built and programmed but also cherished in the future. We have a highly capable, experienced team and look forward to working with City and the Community in bringing all this to bear."

WPTV also contacted Clearpath President Randy Lloyd who wasn't able to meet WPTV's deadline for comment, but WPTV obtained an email in April saying he felt SuDa had an unfair advantage for getting to revise its request.

John O'Brien of the city's purchasing department responded back and told Lloyd that SuDa was only asking for clarification, which the city allowed for all applicants.

Still, Cotugno said it's time to address the issue.

"We need to ensure this process maintains its integrity and maintains the trust of its citizens," Cotugno said. "It's very important we address this issue."

The special meeting starts at 9:30 a.m. Friday.

If SuDa, CREC Capital and Madison Marquette are disqualified, the city council then needs to decide what happens next.

Cotugno said the bid doesn't necessarily automatically go to Clearpath.