Builder, city head back to court

HOLMES BEACH – City leaders and local developer/builder Shawn Kaleta are no strangers to meeting each other in court. This time, Kaleta’s attorney, Michelle Grantham, has filed a suit against city leaders in the U.S. District Court for the Middle District of Florida Tampa Division alleging that city leaders are discriminating against him and his various businesses in the city.

In the paperwork filed Dec. 31, Kaleta states he is filing for damages, along with declaratory and injunctive relief, alleging deprivation of property and civil rights by the city. The filing alleges that city leaders have violated Kaleta’s right to free speech and equal protection under the law, both protected by the First and Fourteenth Amendments to the U.S. Constitution.

The lawsuit argues that city leaders have passed regulations specifically targeting Kaleta and his businesses, particularly concerning the development and regulation of short-term rentals, and that he is held to a different standard by the city for the operation of his businesses than other business owners. It also argues that Kaleta, along with his development and rental properties, are singled out by the city for code enforcement and other potential violations and that city leaders publicly subject Kaleta to slander and blackballing.

Included in the lawsuit is the ongoing struggle between the city and Kaleta over the operation of a bar/lounge at the Bali Hai Beach Resort. Kaleta and Louis Najmy, serving as the attorney for the resort’s owners, have argued before the Holmes Beach code compliance special magistrate and city commissioners that there was a bar/lounge previously existing on the property, granting Kaleta the right to have one serving alcohol to patrons now. Due to the remodel of the space used as a bar/lounge at the Bali Hai, along with the introduction of a spa service area and construction work done at the site without prior building permits, the property ended up before city commissioners in 2021 for a site plan approval. After being discussed by commissioners at several meetings, commissioners eventually voted to not allow the operation of the bar/lounge on the resort property, one of the stipulations of the site plan approval. This action is listed in the current lawsuit as one example of how city leaders are allegedly discriminating against Kaleta and his businesses.

The lawsuit also alleges that the city and its special magistrate, attorney Michael Connolly, who is not mentioned by name in the paperwork, have arbitrarily regulated and fined Kaleta’s businesses.

The relief sought through the court by Grantham on Kaleta’s behalf includes having a trial by jury, a declaratory judgment on the city’s policies, interpretations, practices and actions as they related to the protection of Kaleta’s rights to free speech and equal protection clauses under the Constitution, an order by the court granting Kaleta injunctive relief ordering the city “to cease the unconstitutional and unlawful practices directed at plaintiff’s (Kaleta’s) ability to be properly notified and represented at code enforcement hearings, be treated fairly at code enforcement hearings, conduct his business, including hotel/motel and short-term vacation rentals, in compliance with city code and without arbitrary interruption by the city, and order the city, their officers, agents, employees and attorneys to cease from making false and slanderous public statements regarding plaintiff and his businesses and to record all future code enforcement hearings.” Other relief sought would require the city to issue a public apology to Kaleta through local newspapers and award Kaleta damages, pre-judgment interest, reasonable attorney’s fees and costs.

At press time for The Sun, the case had not been assigned to a judge and no hearings have been scheduled.

In the Manatee County Circuit Court, Kaleta had a win against the city as Judge Charles Sniffen denied the city of Holmes Beach’s motion to dismiss the second amended counterclaim submitted on behalf of the Bali Hai during a Jan. 5 hearing held by teleconference. The case before Sniffen concerns the operation of the bar/lounge and right of the bar/lounge to serve alcohol at the Bali Hai resort property.

Attorneys for the city argued that the second amended counterclaim failed to state a cause of action upon which relief could be granted and that the promissory estoppel claim listed in the second amended counterclaim should be dismissed with prejudice, arguing that city leaders never gave the Bali Hai’s representatives a promise that alcohol could be served indefinitely at the property.

With Sniffen’s denial of the city’s motion, the case will move forward in Manatee County Circuit Court.