Mystery of Fla. island ownership still unresolved as court date looms

It was 1953, and the offshore drilling industry was just beginning.

Companies raised platforms in shallow coastal waters, states fought for control of leasing rights and the Supreme Court had recently ruled that the federal government owned undersea property rich in oil off the California coast.

In response, Congress passed the Submerged Land Act, granting states ownership of submerged land within 3 miles of their borders.

Sixty years later, a lawyer from Miami is hoping the act will be the key to proving his ownership of an uninhabited island off Key West, Fla. Its worth is not tied to oil and minerals; this time around, it's all about vacation homes and prime real estate.

Roger Bernstein's company, F.E.B. Corp., bought Wisteria Island in 1967. But in 2011 -- in the middle of a local battle over Bernstein's development plans -- the Bureau of Land Management announced a bombshell: It claimed the federal government owned the island, after more than a half-century of forgetfulness (Greenwire, Aug. 17, 2012).


Now the case is in court, where a judge must decide whether Wisteria belongs to the government or the family that has been paying taxes on it for more than 40 years.

"This is an abominable waste of taxpayer money," Bernstein said in a recent interview, asserting that no federal agency has expressed interest in using the island. "There's no agency that I can think of that could manage it or use it."

Bernstein is pursuing a "quiet title" lawsuit, asking the U.S. District Court for the Southern District of Florida to affirm his ownership of the island and "quiet" the government's claims to it. His complaint reads like a history of the United States, beginning with Florida's admittance to the United States in 1845, through the Civil War and the Reconstruction Act, and up to BLM's 2011 claim that Wisteria is federal property.

While the federal government says the island never left federal hands, Bernstein claims it was always in Florida's possession -- until state officials sold it off in 1951 to Bernie Papy Jr., a state representative known as the "King of the Florida Keys."

At the time, the U.S. Navy opposed the sale, informing state officials that the federal government owned the island. The state sold it anyway, with Papy's agreement that he would take the risk.

In a letter to Bernstein's lawyer last year, a BLM official points to that interaction as proof that Florida never had the right to sell the property -- and knew it.

"The grantee and his principal were clearly on notice as to the claim of ownership by the United States," the official writes. "When Florida was contemplating a sale of the spoil island in 1951, the Navy notified Florida that the spoil island was property of the United States."

In a motion to dismiss Bernstein's lawsuit, U.S. Attorney Wifredo Ferrer also pointed to this evidence to argue that the 12-year statute of limitations under the Quiet Title Act had run out in the 1960s. But U.S. District Judge Jose Martinez denied the motion, pointing out that it was still unclear whether the 1951 events would have started the limitation clock.

The trial is now set to begin on March 24, 2014, opening the door to a flood of forgotten memos and bureaucratic correspondence in a 150-year-old mystery.

"It would be more interesting if it was happening to someone else," Bernstein said, but, he admitted, "intellectually, it's fascinating."

The fight for a forgotten island

Whatever the outcome of the case, one thing is certain: BLM's announcement in 2011 that Wisteria Island was federally owned came as a surprise to everyone.

Known as "Christmas Tree Island" to locals -- after the invasive Australian pines that have taken root -- the 23-acre pile of sediment was created when the Navy dredged Key West Harbor to make a channel for traveling ships. In the touristy world of Key West, it is one of the last remnants of the area's laid-back roots, where residents have moored their boats, hosted parties and built makeshift shelters.

During that time, the assumption was that the island was privately owned, albeit vacant. As recently as 2006, the Navy's SEALs entered into a license agreement with F.E.B. Corp. to use Wisteria for training, confirming in the process that Bernstein was the owner.

But in 2007, Bernstein began efforts to develop the island, drawing strong local opposition. He wanted to build a residential community, complete with a bar and restaurant. The development, he argued, would put to good use an island that had become a trespasser's paradise.

But Naja Girard, who led efforts to stop Bernstein's plans, did some research on the island's history -- and discovered the 1951 letter from the Navy objecting to Florida's right to sell the island to Papy.

At first, BLM, along with the Fish and Wildlife Service, denied that the federal government owned the property. But in 2011, BLM reversed its position and announced that Wisteria was always part of public lands.

Now Bernstein's plans are in stasis. Not only are many Key West residents opposed, but Bernstein's petition with Monroe County -- which he believes has the jurisdiction to approve a land-use category for development -- is on hold. Bernstein said county officials cannot proceed "until it's clear who owns the land."

Right now, the value of the property is minimal, and it's unclear why the government wants it (though locals hope for a park or other public use). The Monroe County property appraiser lists the island's market value at $17,980, ostensibly because of the substantial hurdles to development.

Ferrer's office declined to comment on the government's interest. But in a response to Bernstein's complaint -- filed in court last week -- Ferrer argues that BLM and FWS officials who denied the government's claim to the property did not represent the federal government. The Navy SEALs similarly were "without authority" to enter into a license agreement with Bernstein in 2006, according to the government's response.

But much of the disagreement is around the Submerged Land Act. To Bernstein, it is a "catch-all," reaffirming Florida's ownership of Wisteria, which was once submerged land, and restarting the clock of the statute of limitations. Since 1953, he argues, everything the government did "was not assert ownership."

The federal government believes the exact opposite.

The act, BLM asserts, reaffirmed federal ownership, thanks to an exception for "all lands filled in, built up, or otherwise reclaimed by the United States for its own use."

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