Brett's Payout: Legal Exposure, Aging Substructure, and Fee Risks Drove City decision

Editor's Note: The Observer obtained the deliberations of City Commissioners in ultimately agreeing to pay $660,000 to settle litigation with the leaseholders of Brett’s Waterway Café. Documents from two closed-door “shade” meetings held on February 4 and April 15 offer a rare look inside the deliberations, legal calculations, and diverging opinions among city commissioners that ultimately led to the six-figure deal.

At the heart of the dispute was the deteriorating condition of the supporting pier pilings beneath Brett’s Waterway Café, the city-owned structure leased to the Centre Street Restaurant Group. In 2021, the city had issued a notice of unsafe conditions, initiating a chain of events that spawned lawsuits, appeals, and finger-pointing over maintenance responsibilities.

The dispute dates back to 2021 when the city issued a Notice of Unsafe Building to Brett's, citing severe deterioration in the substructure beneath the restaurant. While Brett's lease required them to maintain part of the foundation, the city was responsible for three of the five foundational pilings.

Litigation Counsel Hal Houston reminded commissioners of that shared responsibility during the February 4 shade meeting: "There was such a deferred maintenance on at least the three if not all five of the pilings below it was going to be of such a, likely hundreds of thousands or millions of dollars to address and fix."

Vice Mayor Darron Ayscue didn’t mince words in assessing the city’s exposure: "Just imagine we shut them down and we were responsible for three of those... Then this number would be in the millions."

Houston agreed, adding, "There was almost no way we were going to keep it under (code thresholds)... and so the entire building would have to be brought up to the new code."

By February, the city had already spent more than $63,000 on legal fees. Houston estimated that going to arbitration could add over $100,000 more in city legal costs and possibly expose Fernandina Beach to paying Center Street’s attorneys’ fees, which had already surpassed $200,000.

“We could 90 percent win the case and still have to pay both sides’ attorneys' fees,” Houston warned.

City Attorney Pro Tem Harrison Poole echoed that sentiment, reminding commissioners of the McGill Aviation case, a previous dispute in which the city ended up paying more than $1 million in fees after years of litigation — even after largely prevailing.

Then there were the legal and financial stakes for the city.

By early 2025, the leaseholders had made a formal demand of $685,000 for lost profits and legal fees.

Hal Houston

Houston described the risks: "They are seeking $200,000 of attorneys' fees for the past work... Whoever is the prevailing party will get their fees."

Commissioner Tim Poynter, drawing from his experience in the restaurant business, challenged the legitimacy of the leaseholders' lost profits claim.

"I'm only interested in the gross sales because I'm not running their operations and no one here is running their operation... According to the State... (gross sales) were virtually the same."

Houston acknowledged the complexity, stating, "They've at least made a prima facie showing of support for damages. Then the burden would shift to us... to prove alternative reasons for why the numbers dropped."

Still, Poole emphasized the bigger picture: "You can win the battle and lose the war when you're talking about attorneys' fees."

Then came a gut punch from Poole.

"Sometimes you might call it the white hat versus the black hat. We don't have the white hat," Poole said.

According to Poole, even if the city prevailed on some claims, it could still be found liable for fees. "If they win 51 percent of the case, they will get their attorneys' fees," he said.

Two months later the commission considered a measured exit.

On April 15, the city received a final offer bracket from the plaintiffs: they would settle for $400,000 if the city came up to $360,000.

Outside counsel Fred Isaac, hired for his lease and real estate expertise, presented the Commission with a clear choice: continue litigation with potentially high costs and an uncertain outcome, or settle for $660,000 and regain control of the property without further risk.

Isaac recommended settling. While maintaining that the lease could have been terminated for failure to operate as a restaurant or for being closed for a substantial period, he emphasized that litigation would likely become a battle of expert witnesses, muddying the facts and increasing costs. He called the settlement “a business decision” and noted that once the lease is terminated through agreement, the city would have the flexibility to decide the site’s future.

Commissioner Genece Minshew voiced support for a counter at the midpoint: "I'm fine with $380,000. We need to get this off our desk, off the table."

Commissioner Joyce Tuten agreed, saying, "I feel like we're spending that amount sitting here right now."

Mayor James Antun added little but signaled consensus: "At this point I don't know that I have much more to say. Pretty much spot on there."

Vice Mayor Ayscue pushed for closure as well, noting, "We've got another one that just popped today... I'm ready to move on."

Houston confirmed moments later: "With the four kind of non-monetary terms at $380,000, we will be settled."

Those terms included honoring the lease through December 31, 2025, non-disparagement, inspection protocols after storms, and a waiver of any claims for future rent.

There was one small step toward accountability earlier in the February meeting as Mayor Antun raised a critical point about procedural risks in how the city had handled the lease termination:

"Yeah. I think that's something, even if we haven't (given Brett's notice), that would be a little threat of liability we would want to close up."

The comment acknowledged concerns that the city may have failed to issue formal notice of termination per the lease requirements, which could have added further liability.

With the $380,000 settlement added to a previous $280,000 lease buyout, the city’s total payout came to $660,000.

In the end, the commissioners chose a path that avoided prolonged arbitration and a possible seven-figure loss — even if it meant conceding that the city, at least this time, wasn’t the one wearing the white hat.

With the settlement now finalized, the city regained control over one of its most iconic waterfront properties. The city now plans to demolish the building during 2026 and simply replace the existing bulkhead with a walkway and railing on the riverfront.