Yacht Broker Plans First US-Cuba Voyage Charter Under New Rules

August 04, 2015

It is reported that a Palm Beach County yacht broker received a license issued by the U.S. Office of Foreign Assets Control ("OFAC") to operate a 78-foot yacht between the United States and Cuba. Paul Madden, a longtime luxury yacht broker with Paul Madden Associates LLC, reportedly received the license on July 1 and the vessel is already scheduled to carry and documentary filmmaker and a Wall Street Journal reporter, along with other passengers.

As previously reported in my blog, several other vessel operators have received OFAC licenses to operate to Cuba, including Carnival Cruise Lines. Cruise and ferry companies have applied for government licenses to sail to Cuba since the Obama administration restored diplomatic ties with Cuba and loosened rules for U.S. travel to the island. Carnival is the first cruise line to obtain a license, which plans to start service in May.

But the 78-foot yacht will reportedly be the first vessel to sail between the United States and Cuba in decades. The 4-cabin vessel received a research license from OFAC and the trip is being arranged by a New York educational tour guide, Academic Arrangements Abroad. An advantage to traveling by yacht rather than other forms of transportation, such as planes, is the provision of lodging and food without having to rely on the Cubans. Additionally, a yacht can offer secure Internet access, which is severely limited in Cuba. Furthermore, a smaller yacht can be accommodated within the shallow depths of most Cuban ports. Cruise ships will require much more infrastructure to operate.

Fifteen people are booked to sail from Key West to Marina Hemingway nine miles west of Havana on the historic 4½-hour excursion. Passengers will stay on the yacht, which reportedly plans to proceed afterward to Havana Harbor, Cuba's main port. The plan is for the tour to head back to Key West.

The biggest challenges to passenger services to Cuba is the lack of Cuban infrastructure. In addition, most marine insurers will not insure travel to Cuba, as it is generally outside of the navigational limits of most marine insurance policies.

If you are interested in reaching me, you may contact me via this blog or at mov@chaloslaw.com.

Key Biscayne Sues Again Over Miami's Plan for Marine Stadium

July 16, 2015

It is reported that less than two weeks after agreeing to try to hammer out a deal, Key Biscayne has filed a third lawsuit over Miami's plan to redevelop Virginia Key. The June 25th petition filed in Miami-Dade Circuit Court is looking to push back the construction that the City of Miami is pursuing around the decaying Miami Marine Stadium.

In one corner, Miami plans to spend $16 million to turn the entrance and several vacant parcels next to the waterfront stadium into a "flex park" capable of hosting large events. Because some of the construction is on historically designated stadium grounds, the City obtained a special dispensation from the historic preservation board and the City Commission in May.

In the other corner, the Village of Key Biscayne maintains that the special dispensation was improvidently granted. The Village claims Miami officials prevented the board from hearing evidence about future uses in violation of Miami's own code. Key Biscayne also claims permission was rushed and lacked all the needed documentation, and the Miami city attorney's office showed bias during the hearing to approve the permit. This latest lawsuit is the Village's third court action over redevelopment of the stadium and surrounding land.

The Miami Marine Stadium, a 1963 marine amphitheater on Biscayne Bay, has been a venue of major contention. Last November, the nonprofit group Friends of Miami Marine Stadium was working behind the scenes to push a plan to renovate the stadium. The non-profit failed to consult Key Biscayne politicians before they held a glitzy event announcing the stadium renovation, which of course, prompted outrage from the politicians who feared a large development on the stadium site.

Then in February, Key Biscayne filed a complaint in Miami-Dade Circuit Court after the City of Miami independently pushed plans to redevelop the stadium site and bring the Miami International Boat Show there as an anchor tenant. Key Biscayne sought an emergency injunction when Miami began preliminary site work with the lawsuit pending.

On April 22nd, the Village filed a second lawsuit against the boat show operator. Key Biscayne has portrayed a boat show on Virginia Key as a traffic and environmental catastrophe. It does not help that contractors doing preliminary work in the basin near the stadium chopped down hundreds of square feet of protected mangroves.

Now this latest lawsuit could affect a scheduled mediation that is supposed to be taking place between the City and the Village. The public comments made by the Village is that the lawsuit was not intended to affect the mediation but was filed to avoid missing the 30-day deadline for challenging the City's action in the Circuit Court. It is true that there is a 30-day deadline to challenge administrative actions. It is reported that some politicians at the City of Miami may now be "back pedaling" due to the "intrusiveness" of the proposed project. Both sides state that the stadium should be renovated, but they are bitterly divided on how this should be done.

Those of us that rely on the marine industry hope that the politicians can work through this for the benefit of the industry.

If you are interested in reaching me, you may do so by writing to me at mov@chaloslaw.com.

Carnival Announces Cruises from Miami to Cuba

July 07, 2015

The world's largest cruise ship operator could be heading to Cuba by May 2016. Various sources report that Carnival Corp. has received U.S. government licenses to offer "purposeful" cruises from the U.S. to Cuba for people-to-people, humanitarian and other exchanges. Carnival says it would become the first American cruise company to visit Cuba since the 1960 trade embargo. The trips will be through its new "fathom" brand, which focuses on trips where passengers sail to a destination in order to volunteer there.

The weeklong cruises are reported to be aboard ADONIA, a small cruise ship which carries 710 passengers. ADONIA is relatively small for the industry, as ships sailing under the company's namesake line can carry nearly 3,000 passengers. ADONIA is a deluxe ship that offers no casino or Broadway-type shows but rather features Spanish classes and workshops on the island's art and heritage. The itinerary is still being finalized, as Carnival is awaiting approval from the Cuban government. The ship is expected to visit several ports and passengers will sleep onboard each night. Carnival is expecting high demand for the voyages and has priced them accordingly. Prices start at $2,990 per person plus taxes and port fees. A similar service-oriented trip on the same ship to the Dominican Republic starts at $1,540 per person.

Cruise ship ADONIA
Photo supplied by Carnival Corp.

Cuba is still closed for general tourism for Americans under the terms of the U.S. embargo against communist-led Cuba, unless they have family on the island. This measure must be lifted by Congress. Nevertheless, new rules permit U.S. visits to Cuba without a prior license in 12 categories of travel, including the people-to-people type tours now planned by Carnival. Carnival's license comes as part of recent approvals for six passenger vessels from the Treasury Department. The U.S. government has not named the companies who have received these licenses, though as I previously blogged on May 6, 2015, Airline Brokers Co., Baja Ferries USA, Havana Ferry Partners, United Caribbean Lines and America Cruise Ferries have all announced that they have received these licenses. See that article here => Ferries Between Florida and Cuba.

Of the six that have received the licenses, four of them are reportedly authorized to allow passengers and crew to spend the night aboard. The vessels are not allowed to stop at other countries, so an ADONIA cruise from Miami to Cuba will not be a typical Caribbean cruise where the ship will stop at four or five other ports.

There is a lot of interest in waterborne travel to Cuba. Tourism is reportedly a $2.6 billion-plus industry in Cuba and has been one of the main economic drivers keeping Cuba's economy sputtering along. Last year, the country reportedly welcomed a record 3 million visitors. Several sources report that Cuban officials estimate that 1.5 million Americans would travel to the island annually if all restrictions were removed, potentially adding some $2 billion a year to Cuba's economy.

There are many challenges ahead for the country as it opens up to U.S. visitors. There is not enough infrastructure to handle the demand. Reportedly major travel companies including Delta Air Lines, JetBlue Airways, United Airlines, Hilton Worldwide and Marriott International have been closely eyeing developments in Cuba. JetBlue, which has run charter flights from Florida to Cuba for years, just launched a new nonstop flight from New York. It is only open to travelers who are approved to visit Cuba. American Airlines and Sun Country Airlines also offer charters.

If you are interested in contacting me, you may do so by writing to me at mov@chaloslaw.com.

Defeating Liability Waivers Resulting in $12M Settlement

June 05, 2015

In the case of Adkins v. Big Dipper Charters, et al., Case No. 14-cv-10030-KlNG, the plaintiffs alleged the Florida Keys Dive Center caused the Adkins family economic and non-economic damages, including pain, suffering and past and future lost income. The Florida Keys Dive Center and its boat operator Big Dipper Charters Inc., along with the boat captain, owners and dive master, were named in the suit. The lawsuit alleged the dive master told the father and son team to "dive, dive, dive," then failed to communicate to the boat captain that there were divers in the water. The captain put the boat in reverse, and the propellers struck a boy and his father, causing severe traumatic injuries.

As expected, the defense argued their clients were protected by liability waivers signed by the father for both himself and his son that are common in dive boat operator forms. The plaintiffs argued the liability release forms signed were void because they violated several provisions of federal and state law. The plaintiffs set out several state and federal stator violations undertaken by the defendants which all ultimately boiled down to failure to have a proper lookout.

The defendants also asserted a limitation of liability defense. This limits a boat owner's liability to the value of the vessel, post incident. In this case the vessel had a value of about $250,000. The plaintiffs argued that the limitation of liability did not apply because the vessel was not seaworthy, which is also defined generally as a vessel that is fit for its intended purpose. The plaintiffs were participating in a drift dive, where divers follow the current. However it was alleged that the dive master and boat captain had no method of communication other than yelling or stomping on the deck to signal. Thus, it was argued that the combination of drift diving without a method of communication and without a direct line of sight to the back of the vessel created a situation where the captain decided to maneuver the vessel around without knowing there were people in the water, which ultimately lead to the accident.

The Daily Business Review reports that the settlement was reached during a 15-hour mediation. Reportedly, the son will receive $11 million of the settlement and his father will receive $1 million. The settlement now has to be approved by the court, given the son is a minor.

If you are interested in learning more about this case or wish to reach me, you may write to me at mov@chaloslaw.com.