WEST PALM BEACH, Fla. — It's back to the drawing board to find an operator for a signature West Palm Beach redevelopment project.
The city pumped in nearly $20 million to revamp the Sunset Lounge, which once hosted top acts like Ella Fitzgerald and other jazz greats.
A document received by Contact 5 shows the city canceled its efforts to hire an operator to manage the historic Sunset Lounge.
The latest twist comes after the city disqualified both of its bidders over alleged lobbying violations.
RELATED: West Palm Beach sued over Sunset Lounge
The city said Vita Lounge LLC, the minority group first selected, "blatantly violated" an ordinance against lobbying for the contract through Facebook posts and e-mails.
Vita denied the accusation and filed a lawsuit.
Vita also accused the only other bidder, Mad Room Hospitality, of violating the same lobbying ordinance.
The city then disqualified Mad Room Hospitality for allegedly making "courtesy contact with the mayor and a commissioner during the prohibited contact period."
RELATED: Bidding war? More drama over the historic Sunset Lounge
In a statement to Contact 5 Thursday afternoon, the co-owner of Mad Room Hospitality said they were "improperly disqualified by a technicality."
As a result of all of this, the city canceled the request for a proposal meant to find an operator to run the Sunset Lounge.
The city's community redevelopment agency said it costs about $26,000 a month to maintain the empty building.
A city spokesperson told Contact 5 that the CRA board will meet in the coming weeks to discuss the next steps and future operations of the Sunset Lounge.
Below is a statement from Zack Bush, co-owner, Mad Room Hospitality:
"Mad Room Hospitality was improperly disqualified by a technicality and the city, in my opinion, realized its error which is why they changed their course in posting the letter it did to DemandStar.
We have requested from the City a letter rescinding their improper cancellation and we expect this to be forthcoming.
The city of West Palm Beach allows a responder to communicate with the city at the execution of a contract/agreement or once the solicitation stage has ended. It was clear then and remains clear now that the solicitation stage had ended.
Ultimately, the City has to do what they feel is best for the community and we only want the best for the Sunset Lounge and the Historic Northwest District. Mad Room is not interested in pursuing this project further at this time.
For what it is worth, which we also made abundantly clear to the City--(which seemed to ruffle some feathers)-Mad Room does not feel Vita was treated fairly by the City of West Palm Beach.
We certainly wish the City the very, very best in moving this project forward as the Community deserves and needs this project to flourish."