Naples council rejects magistrate recommendation in Old Naples outdoor-dining dispute

Naples City Council on Feb. 5 rejected a special magistrate's recommendation that would have approved an outdoor-dining permit for the Old Naples Building and reduced the restaurant's permitted outdoor-dining square footage from 4,630 to 2,315 square feet.

The council's decision follows a quasi-judicial Fludra (Florida Land Use and Environmental Dispute Resolution Act) hearing in which lawyers for the Old Naples property, counsel for an interested party (Neapolitan Enterprises), and city staff presented competing legal interpretations about whether parking credits tied to a historic administrative determination may be used for outdoor dining.

The dispute centers on a 2011 administrative determination by then-City Planning Director Robin Singer and a 2018 final judgment that addressed longstanding questions about how the building's grandfathered 76 parking credits apply to future uses on the property. Old Naples argued that the 2018 judgment and the Singer letter permit the owner to deploy the property's grandfathered credits to cover the proposed outdoor dining; Neapolitan and city staff argued the city code does not allow transferring or reallocating those credits to outdoor dining when portions of the historic mezzanine are removed.

John Schubin, counsel for Old Naples, told council, “Acceptance of the recommended order is fine by us,” and said his clients would not continue litigation if the council adopted the magistrate's report and settlement. Neapolitan representative Mick Moore countered that the Old Naples Building had no on-site parking credits available for outdoor dining and called the magistrate's calculation and basis "incorrect under the facts and the record of the case." He told council: “The old Naples building does not have any parking, not even a single space.”

Kara Murphy, outside counsel assisting the city, and City Attorney Matthew McConnell told council that approving the magistrate's recommendation would not itself issue a final permit; additional reviews (for example, life-safety review by Fire) would still be required before any operational permit would be released. Murphy also noted that the magistrate's report recommended removing part of the mezzanine and applying a 1-to-300 square-foot ratio for the forfeited credits, a proposal that Neapolitan and the city disputed as inconsistent with prior filings that used a 1-to-100 ratio.

Council member Ray Christmann moved to reject the magistrate's recommendation; the motion was seconded and passed on a roll-call vote (Yes: Christmann, Barton, Kramer, Petronoff; No: Peneman, Hutchison, Heitman). The clerk recorded the outcome as unanimous to deny the magistrate recommendation when the formal roll call was completed during the hearing record, and the council directed staff and the city attorney to prepare any required written findings and next steps. Council and staff acknowledged an active series of court filings and appeals remain pending should any party continue litigation.

What's next: the city attorney said staff will prepare the required written decision and coordinate with counsel; Old Naples may seek appellate remedies (the record reflects an outstanding motion to enforce and appeals in circuit and appellate courts). Council members said they expected the legal offices to coordinate with outside counsel on any future briefing and to report back if litigation posture changes.

Ending: While the magistrate had recommended a compromise to allow limited outdoor seating tied to a square-footage reduction, council concluded the code and prior rulings left unresolved legal conflict. The matter remains subject to litigation and further administrative steps; the council's action preserves the city's long-standing position that parking credits cannot be reallocated in the manner Old Naples requested without separate approvals or an alternate legal path.