Lawsuit: Miami Beach Sidewalk Café Crackdown Would Be 'Death Sentence' For Restaurants

A crackdown on sidewalk cafés in Miami Beach means that 13 existing establishments could fail to qualify for renewed permits and be shut down by Tuesday, Nov. 30, potentially causing a ripple effect for landlords, a lawsuit warns. 

The Lincoln Theater and Lincoln Associates, parent companies of Tapelia restaurant and Ole Ole steakhouse, are suing the city of Miami Beach, which changed criteria for sidewalk café permits in March. The revised law gives the city manager expanded power in issuing, renewing or denying sidewalk café permits, using criteria that the restaurants argue are too vague. Under the expanded criteria, even long-settled violations and negative Yelp reviews could contribute to having permits denied.

If the law stays, the restaurants, which are on the main shopping drag, Lincoln Road, will be forced to shutter and it would be terrible for the commercial real estate industry, the complaint alleges.

Lincoln Road, the popular outdoor mall on Miami Beach that spans 14 blocks and has about 85 landlords, was created when the road closed to traffic in 1960. Now it has benches, plants and fountains; retail stores from major brands and trendy boutiques; and usually, some of the best people-watching in the world, with tourists and locals from all over the world taking in views from the sidewalk cafés that line the street. In 2018, retail rents there hit a record $300 per SF.

But those high rents, and the coronavirus pandemic, contributed to vacancies. Meanwhile, Miami Beach struggled with problems a few blocks away on Ocean Drive, a beachfront strip with restaurants where tourists frequently reported being ripped off. The city sought to crack down on hawking, misleading signage and bait-and-switch tactics.

In March 2021, the city overhauled its code of ordinances, adding criteria that can be considered by the city manager in granting sidewalk café permits. That criteria can include past violations or “any other information which the city manager, or designee, deems to be relevant, applicable or essential to such a determination.”

The lawsuit filed Nov. 22 says these new criteria are nonspecific and undefined.

“As written, the City may deny a permit to an applicant due to a decade old unverified noise violation and a stale negative review on Yelp of a patron complaining of their steak being served overcooked," the lawsuit said. 

Under the rules, establishments are not able to appeal, and once an application is denied, the applicant has to wait a year before reapplying.

“It is a death sentence to the business and its employees,” the lawsuit states, and “will essentially force a lease default, potentially exposing the landlord to foreclosure proceedings.”

“Should these businesses be stripped of their ability to provide outdoor dining, the cascading impact is threefold,” the lawsuit says. “First, the restaurants would go out of business, effectively creating mall vacancies on Lincoln Road. Second, over a hundred employees working for these businesses would lose their jobs. Third, the property values of the real estate on Lincoln Road would suffer a precipitous decline.”

A manager who oversees both Tapelia and Ole Ole told the Miami Herald that about 90% of their revenue is from sidewalk tables. 

City Commissioner Mark Samuelian, who sponsored the ordinance with the new criteria, said other restaurant operators had thanked him for cracking down on bad operators, according to the Herald.

"We are going to raise the bar on performance on folks that want to make money on public property," Samuelian told the Herald.