BREAKING: City Commission Awards Mallory Square Leases to Tropical Shell and Gift

5–2 vote advances HTA-linked expansion at city’s prime waterfront.

KEY WEST, Fla. — The Key West City Commission voted 5–2 on Wednesday to award multiple Mallory Square leaseholds to Tropical Shell & Gift, Inc., expanding the footprint of a Historic Tours of America affiliate across some of the city’s most valuable waterfront properties.

Commissioners Greg Veliz, Donie Lee, Lissette Carey, Aaron Castillo and Mayor Danise Henriquez voted in favor of the agreements, while Commissioners Sam Kaufman and Monica Haskell opposed.

The approvals cover the Historic Hospitality House, 402 Wall St., and the Cable Huts at Mallory Square, widely regarded as the city’s most valuable public-facing real estate and the centerpiece of its nightly sunset gathering.

City staff recommended the awards following a re-bid process in which Tropical Shell received the highest overall evaluation scores.

Under the agreements, Tropical Shell will take on responsibility for design, rehabilitation, operation and maintenance of the properties, with no direct financial cost to the city. Although the proposal indicates that the company will pay for the design and construction costs, Tropical Shell is also seeking a 10-year rent forbearance to cover the costs.

Plans for the Historic Hospitality House include conversion into an environmental education center tied to the for-profit Key West Aquarium, with programming and access integrated into the aquarium’s ticketed operations. The Cable Huts are expected to be incorporated into the broader tourism-focused redevelopment concept.

The vote effectively deepens the presence of Historic Tours of America, led by Ed Swift, in the management of city-owned, visitor-oriented assets.

The decision also comes amid scrutiny over campaign finance ties. Public records show that several commissioners voting in favor — including Henriquez, Lee and Castillo — received significant campaign contributions during the 2024 election cycle from individuals and entities associated with Swift and Historic Tours of America.

During the meeting, the city’s contract attorney addressed potential conflicts and indicated that the contributions did not legally preclude commissioners from voting on the item, a determination that drew criticism from opponents and members of the public.

A competing proposal from Hayes Robertson Group, led by developer and restaurateur Joe Walsh, called on the commission to delay the vote and allow both bidders to present their plans publicly before any final decision.

“The redevelopment of Mallory Square is worth the time and effort,” Walsh wrote in an email to city procurement officials, urging commissioners to review both proposals side by side given the long-term significance of the site.

During the public comment portion of the items, Walsh also raised concerns about elements of Tropical Shell’s proposal that could involve relocating a city-owned structure currently housing the Sails to Rails Museum at Flagler Station, noting that such a move would likely require additional approvals, including from the Key West Bight Board.

He questioned whether those downstream approvals and legal implications had been fully vetted, saying the commission should have clearer guidance before proceeding.

Contract counsel addressed the issue during the meeting but offered what several observers characterized as unclear or incomplete interpretations regarding permitting, jurisdiction and approval requirements.

Walsh’s proposal emphasized maintaining open public access and activating the square through food and beverage offerings rather than ticketed attractions tied to a single operator.

Commissioners Kaufman and Haskell, who voted against the agreements, raised concerns about public access, process, and concentration of control over city-owned property.

Many see the move as one step closer to a challenge to current cruise ship restrictions over the use of the Mallory Square dock by the Chamber of Commerce and other downtown business interests.

With the approval, the city moves forward with a consolidated redevelopment approach at Mallory Square under a single operator aligned with a tourism and attractions-based model.

This is a evolving story. Watch this space.