Delay tour ordinance until HTA deal expires

Editorial

Sunday, November 15, 2009

Delay tour ordinance until HTA deal expires

As Key West continues to be popular with tourists, representatives of various current, new and expanding tourist attractions eye the city for the potential profits they can reap.

Establishing a nude beach to attract vacationing naturists, widening the shipping channel to accommodate 5,400-foot passenger cruise ships, allowing watersport activities in the Key West National Wildlife Refuge, larger aircraft and airport expansion, and providing new franchise agreements for trolley vehicles and amphibious tours to operate on city streets and in city waterways are some of the current actions underway or under consideration.

A lot of folks seem to want a slice of the tourism pie. But do city officials really know how big the pie is and how many pieces are left to serve? And the most important question: Who gets the pieces?

The current process of writing a sightseeing tour ordinance sheds a spotlight on how contract language can result in unintended consequences, having an adverse impact for decades.

The now-infamous Duck Tours case cost the city an $8 million settlement as the court decided that the city's franchise agreement with Historic Tours of America (HTA) constituted granting a monopoly and created an "unreasonable restraint of trade." In order for the city to move forward and rectify this issue, it needs a sightseeing tour ordinance that reflects a competitive market environment while ensuring the health, safety and welfare of the public.

Stipulations in the current franchise agreement with HTA cloud the city's attempt to write a new ordinance or issue new franchise agreements as they are encumbered by the existing agreement. The HTA agreement includes a provision that prevents the city from providing more favorable terms and obligations to competitors, it lacks specifics regarding the number of vehicles allowed, and it generates confusion surrounding the minimum guarantee franchise fees to be paid by competitors. These terms are coupled with a request from HTA to include a 150-foot buffer zone separating competitor "depots" or stops in the new ordinance.

The buffer zone is controversial in as much as City Attorney Shawn Smith recommended against including the provision, as the court interpreted the previous 1,000-foot buffer zone as a restraint of trade. So why would some of the city commissioners ignore their legal counsel and approve the first reading of a tour sightseeing ordinance that contained the buffer zone?

HTA's current 20-year agreement ends in early 2015; it currently operates 16 trains, 19 trolleys and four shuttles and enjoys a competitor-free market.

CityView Trolleys is currently negotiating a franchise agreement and the Duck Tours company is considering entering the market.

We believe the city would be better served by writing a sightseeing tour ordinance reflecting the city's needs and requirements versus one written with terms set by tour companies.

Issues of traffic congestion, safety, infrastructure needs, capping the number of vehicles, size and dimensions of vehicles, noise and environment concerns, the best economic value for city coffers, and most important, the quality of life of residents are all important considerations for a sightseeing tour ordinance.

Considering these current circumstances, it may be wise for the city to offer shorter-term franchises to new competitors and reset the entire sightseeing tour ordinance in 2015 when the HTA agreement expires.

This will allow the city the time to thoroughly research how other tourist destinations handle tours -- including employing independent traffic engineers -- to design a plan that minimizes the negative impact on Old Town.

We further believe Key West needs a viable long-term strategic plan that provides guidance for economic sustainability of the tourism industry without imposing unacceptable impacts on the capacity of the island to provide a quality of life for residents and a pleasurable experience for tourists.

The city needs a strategic plan that anticipates and manages tour operators and other tourism attractions, one that recognizes it is a privilege granted and not a right to operate a private enterprise on public property.

-- The Citizen

Full disclosure of HTA payments needed

Submitted on Tue, 11/17/2009 - 7:11am

"...reset the entire sightseeing tour ordinance in 2015 when the HTA agreement expires." Better yet, if underpayment to the City by HTA has occurred, the franchise agreement should be revoked for breach of contract. Mr. Scales apparently provided information on HTA payments to the City from 2002-2008, citing an underpayment of $4,300 for one year, but what about payments for the years 1983-2001? Has restitution for this underpayment been made? Full disclosure of payments for all years is needed and should be provided to both the commissioners and residents.

Login or register to post comments
Flag as offensive

Compehensive tourism plan

Submitted on Sun, 11/15/2009 - 11:50am

I hope your editorial shapes the future decisions. Your position is clear, simple and makes sense -- fiscal, environmental and "common." As a homeowner on the sightseeing trails, and as someone who fully appreciates the power of the tourism dollar, I think your editorial is spot on.

Login or register to post comments
Flag as offensive

'entering the market?'

Submitted on Sun, 11/15/2009 - 9:37am

let me correct your editorial perceptions. duck tours seafari inc is not 'considering entering the market' as your editorial implies but has been in the market since its inception in april of 1994. it is an active corporation in good standing in florida which any simple secretary of state online check would verify. we were suppressed in 1996 in our operations because 7 CRIMINAL counts were leveled against me and in 1998 the jury took but 5 minutes to find me NOT GUILTY of that henious crime of being in business in my own country. the civil lawsuit continued and finaly in 2005 the case went before a 3 week jury trial and the city was found guilty of violating the United States Constitution under the Commerce Clause and the Florida Anti-Trust Act of 1980 and awarded duck tours seafari $13.5 million dollars in damages. an appeal was launched by the city and in 2007 the 3rd DCA dismissed all the city's many points of appeal as 'having no merit' except the financial one of $13.5M and remanded back to the trial court on a new trial for one purpose only and that was damages. the Florida Supreme Court agreed. this year a trial was held in march on the damages and into the second week the city and the ducks settled for your noted $8 million. duck tours seafari inc also holds a Permanent Injunction or one can say the most 'powerfull licence' in the land and we have been working with city staff and the commission in designing an 'Amphibious Franchise Agreement' which would satisfy and implement the terms of the injunction and be not only of benifit to the ducks but of equal benifit to the city. so you see editorial dept we have been active since our inception in 1994 and plan on RESUMING our operations which were illegaly blocked and suppressed in 1996. john murphy ceo duck tours seafari inc.