West Palm Beach to appeal ruling that would have it pay $1.2M in Sunset Lounge legal costs

West Palm Beach Mayor Keith James said the city will appeal a Palm Beach County Circuit Court judge's ruling that would require the city to pay $1.2 million in attorney fees and costs associated with a legal battle against the local group hoping to manage the Sunset Lounge.

According to a transcript of recent legal proceedings, Circuit Court Judge Carolyn Bell intends to rule — for a second time — that West Palm Beach must cover the legal fees and other costs associated with Vita Lounge's suit against the city's Community Redevelopment Agency, which picked the group to manage the Sunset Lounge and then disqualified it after a procurement official said the group violated city rules against lobbying during a bidding process.

Vita sued, won and was granted the right to collect attorneys fees and other costs. The CRA contested those fees and costs, but Bell determined they had been calculated fairly. The judge is expected to issue a formal ruling within the next few days.

West Palm Beach, though, won't be whipping out the checkbook to pony up any time soon.

"The decision on attorney’s fees will be appealed, and we feel quite confident about prevailing at the appellate level," James said.

A lengthy timeline: Why has the Sunset Lounge negotiations dragged on for so long?

The legal fee dispute between the CRA and Vita is playing out as the two sides are supposed to be working toward an operations/management agreement that would spell out the terms of how Vita would oversee the Sunset Lounge, a 1920s era supper club that hosted entertainment greats like Ella Fitzgerald, James Brown and Count Basie and was the cultural hub of the city's mostly-Black Northwest community. Both the community and the lounge fell on hard times, and the lounge was eventually shut down and sold to the CRA.

The CRA has spent at least $20 million purchasing and rebuilding the Sunset, which was supposed to open in late 2022 or early 2023. But negotiations between the CRA and the Sunset have crawled along, with Vita arguing in court documents that the agency was not negotiating in good faith and agency leaders telling its board members the group does not appear to have the financial wherewithal to successfully oversee the lounge.

City Council members, who serve as the CRA's board, gave the agency and Vita until late May to hammer out an agreement, which is to be considered during a CRA meeting on June 10. Some council members have made clear that, if an agreement is not reached before that meeting, they will direct the CRA to begin another search for a group to oversee the lounge.

Now, with the city's decision to continue contesting Vita's legal fees and costs, the question of whether the CRA and the group can come to an agreement looms larger than ever.

James, who opposed Vita's initial bid to manage the Sunset, said the ongoing dispute will have "no effect" on the CRA-Vita negotiations.

An ongoing dispute between the mayor and Vita is at the center of the issue

Some of Vita's backers, however, wonder if the mayor — not known for quickly forgiving a slight — is quietly poisoning negotiations so Vita won't get to manage the lounge.

Those backers have refused to voice their opinions on the record for The Palm Beach Post, citing fear of retribution.

Vita's lawyer in its battle with the CRA, F. Malcolm Cunningham Jr., serves as Exihibit A in what that retribution could look like, the group's supporters say.

The Post reported in February that James ordered his staff to rescind the purchase of tables that would help pay for an awards dinner of the Black Chamber of Commerce of Palm Beach County.

West Palm Beach had been a significant supporter of the Black chamber, but emails obtained by The Post showed that James ordered an employee to rescind the table purchases after he learned Cunningham was to be the dinner's keynote speaker.

"Rescind the purchase of the tables," James wrote to the employee. "The city will not support any event at which he is the keynote speaker."

The group went ahead with Cunningham as the keynote speaker, making remarks a city department director, Frank Hayden, likened to "advocating for violence" against James.

Cunningham said his comments were misunderstood and that he did not call for violence against the mayor or anyone else.

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Wayne Washington is a journalist covering West Palm Beach, Riviera Beach and race relations for The Palm Beach Post. You can reach him at [email protected]. Help support our work; subscribe today.

This article originally appeared on Palm Beach Post: West Palm Beach must pay $1.2 million in Sunset Lounge legal costs