1260 Palm Properties pursued state mediation process after commission’s vote last year against construction
In May, the Sarasota City Commission is expected to consider terms of a settlement reached through mediation with the developer of the proposed condominium complex at 1260 N. Palm Ave. in Sarasota, known as the Obsidian.
The terms will come out of a state process provided through the Florida Land Use and Environmental Dispute Resolution Act, known as FLUEDRA. Steps in that act lay out how a Special Magistrate — hired upon mutual agreement of the parties — works with representatives of both a developer whose plans have been denied by a local government and representatives of that local government — to hammer out details of an alternative plan, in an effort to finally achieve a positive outcome for a project.
Yet, even when considering the Special Magistrate’s recommendation at the conclusion of a FLUEDRA process, state law says the local government may reject the proposed terms.
The City Commission voted 4-1 in May 2025 to halt plans for the Obsidian, siding with the Bay Plaza Owners Association’s assertion that, at an estimated height of 327 feet, the condominium tower was not compatible with neighboring structures at its planned location.
Only then-Mayor Liz Alpert agreed with the developer — Matt Kihnke, principal of 1260 Palm Properties LLC and president and founder of MK Equity Corp. of Sarasota — that the project’s design complied with all of the necessary city regulations and building standards for the Downtown Bayfront zoning district.
The Bay Plaza Association members had turned to the City Commission after the city’s Planning Board voted 4-1 in February 2025 to support Kihnke’s plans.
As The Sarasota News Leader has reported, opponents of the Obsidian have contended that Kihnke’s design used interstitial space in the building — the area between floors where mechanical, plumbing, electrical and fire suppression equipment is placed — to make the tower rise well above Bay Plaza, so the owners of the Obsidian’s 14 units would have views of Sarasota Bay.
Kihnke originally proposed a 342-foot building. However, after the Planning Board voted against that in 2024, an agent for Kihnke — Sarasota land-use consultant Joel Freedman — filed a new application with city staff, seeking approval of Kihnke’s revised plans.
Already, as made clear by the Feb. 2 formal remarks of a Bay Plaza Association member to the City Commission — as it sat in session that day — the condominium organization is working to defeat this latest effort by Kihnke to construct the new tower.
In the meantime, Assistant City Attorney Joe Mladinich told the News Leader via email that two mediation sessions had been conducted in the FLUEDRA process that Kihnke initiated. They were held on Jan. 7 and Jan. 26, he wrote in a Feb. 6 email, responding to a News Leader request for information.
The mediator is attorney Mark S. Bentley of the Johnson Pope firm in the Tampa area, Mladinich added.
A new fighting with Bay Plaza residents
On Aug. 11, 2025, attorney Robert Lincoln, whose eponymous firm is located in Sarasota, sent a letter to then-Mayor Alpert, explaining that 1260 Palm Properties had decided to file a formal FLUEDRA petition in the aftermath of the May 2025 hearing.
As he wrote in the petition, “1260 Palm owns eight contiguous parcels located on North Palm Avenue” in the Downtown Bayfront zoning district, which allows mixed-use developments up to 18 stories in height and 50 dwelling units per acre.
“The stories included [14-foot-high] ceilings, as expressly permitted by the City’s Zoning Code,” Lincoln continued. Moreover, he pointed out, the interstitial space between stories “is expressly not regulated by the applicable provisions of the City Zoning Code. Regardless, 1260 Palm provided explanations and justifications for its use of interstitial space.”
Then Lincoln noted the “immediate and long-term opposition” to the project from the residents of Bay Plaza. “Even though Bay Plaza was the tallest building in the area when it was constructed,” Lincoln wrote, “residents of Bay Plaza objected to the legal and authorized height of the 1260 Project because it would be significantly taller than Bay Plaza’s building.”
Lincoln added, “Bay Plaza residents stoked opposition to the 1260 Project based on its height. While the Applications were under review by City Staff, Bay Plaza residents appeared repeatedly before the City Commission attacking the project and its developer and demanding that the City deny the project.”
Lincoln contended that Bay Plaza residents also published “false and misleading advertisements, letters, and posts in publications and social media.”
In spite of the Bay Plaza objections, he continued, Lucia Panica, director of the city’s Development Services Department, approved the plans for the 1260 N. Palm Ave. building on Oct. 2, 2024. Then he referenced the Planning Board and City Commission hearings.
After the latter proceeding, Lincoln pointed out, “Regardless of no evidence that the Applications failed to meet the requirements of the Code, and bowing to the unrelenting political pressure brought by Bay Plaza, the City Commission voted to grant the appeal.” The board members voted formally on July 7, 2025, he added, to approve the resolution that laid out the reasons for that vote.
That resolution, Lincoln asserted, “was unreasonable because the City Commission ignored the competent substantial evidence that the Application complies with all aspects of the Zoning Code …” He contended that the denial “improperly followed the ‘clamor of the crowd’ in clear violation of [the commission’s] obligations under Florida Law.”
The City Commission conducted what is called a “quasi-judicial hearing” on the Bay Plaza appeal of the Planning Board decision. As the term implies, such a proceeding is akin to a court case in that the commissioners were charged with considering only testimony and evidence in making their decisions; they were not to rely on their opinions.
That resolution, Lincoln continued, “unfairly burdens the 1260 Property because it denies 1260 Palm the right to use the 1260 Property in accordance with and in compliance with the height, density, and uses expressly permitted to it under the [Downtown Bayfront] zoning district and the City’s Zoning Code. The Denial Resolution singles out the 1260 Property and the 1260 Project for discriminatory and unfair limitations on height.”
He attached a copy of the July 2025 resolution to his August 2025 letter.
That resolution does include information about the adjustments that the developer had requested of city staff to make the project design feasible. The following “Whereas” clause provides those details:
Rejecting trivial assertions about the City Commission’s decision
In the city’s response to Lincoln’s FLUEDRA letter, Clearwater attorney Jay Daigneault, of the Trask Daigneault firm, laid out the seven criteria of the city’s Zoning Code that the City Commission had to consider in its review of the site plan for the Obsidian. They are as follows:
The commissioners, Daigneault continued, also had to consider whether the requested administrative adjustments for the construction were appropriate, in the context of city Zoning Code regulations:
“Alternatively,” Daigneault wrote, 1260 Palm Properties had to demonstrate the following to the City Commission’s satisfaction, in regard to the same section of the Zoning Code:
- “Application of the regulation in question would preclude all reasonable economic use of the site; and
- “Granting the adjustment is the minimum necessary to allow the use of the site; and
- “Any impacts resulting from the adjustment are mitigated to the extent practical.”
Daigneault further contended, “The assignation of purely political motives to the City Commission’s decision trivializes the obvious efforts it made, both singularly and collectively, to review the matter in a fair and unbiased manner guided by the evidence.”
While understanding the developer’s disagreement with the outcome of that hearing, he continued, Kihnke’s view is not a validation of his “facile dismissal of the Commission’s decision as unsupported by competent substantial evidence. Indeed,” Daigneault pointed out, Kihnke’s “position appears to be that the City Commission was required to approve the proposed development because City staff and the Planning Board did so. Were that the case,” he added, “there would be no need for” a six-hour hearing, which the City Commission conducted.
‘Round 3 has begun’
During the Citizens’ Input portion of the Feb. 2 City Commission meeting, Ron Shapiro, a leader of the Bay Plaza opposition to the Obsidian, told the board members, “As you may know, Round 3 of 1260 N. Palm has begun.”
Having attended the second mediation session, Shapiro said, he had learned that the following are key elements of the proposed settlement:
- Two new parking spots and a new loading zone on North Palm Avenue will be allowed in front of the property. “This will be achieved by taking away about half of the existing sidewalk (public land owned by the city) — creating an even more negative pedestrian experience on this block,” Shapiro said.
- “Modified landscaping for the first two stories of the building.
- “A living wall at the parking garage entrance and near the FPL [Florida Power & Light Co.] power connection box.”
- The development of a 90-ay staging plan for the construction.
- A guarantee that the 100-year-old palms that would have to be removed from the site “will live for two years.”
Shapiro stressed, “The size and scope of the project, including building footprint and height, remain unchanged.”
And given the proposal that part of the public sidewalk space would be allowed for parking spaces, Shapiro continued, “One could argue this plan is even more egregious than the last one.”
He concluded his statement thus: “We’re counting on you — our elected officials and city leaders — to do what’s right and deny this project again when it comes before you …”
During the period for remarks of the commissioners on Feb. 2, after the conclusion of the other agenda business, Mayor Debbie Trice asked City Attorney Joe Polzak about the FLUEDRA process.
His office will have recommendations for the board members before the May 4 hearing, he said.
Trice did note that Shapiro had “implied that there was an agreement between the city and the developer. Is that the case?” she asked.
“It’s kind of a unique process,” Polzak responded of the state law’s provisions. Much of it must be kept confidential, he told Trice.
“The goal,” he added, “is to result in a compromise.”
The commission will have the Special Magistrate’s recommendation, Polzak said, but the board members will make the final decision on whether to accept the terms of the proposed agreement.