BREAKING:Navy Terminates Key West Mole Pier Lease After Months of Growing Tension Over a Lack of Cruise Revenue Repairs
Federal notice ends current agreement Aug. 3; critics fear private lease could reopen door to larger cruise ships at Mole Pier.
KEY WEST, Fla. — The U.S. Navy has formally terminated the City of Key West’s lease agreement for use of the outer Mole Pier at Naval Air Station Key West, escalating a growing dispute over cruise ship revenue, infrastructure obligations and the future control of one of the island’s most politically sensitive waterfront properties.
In a May 5 letter obtained and reviewed by Above the Fold sent “To Whom it May Concern,” at the City’s P.O. Box, the Department of the Navy informed the city that Lease N69450-12-RP-00166 would terminate effective Aug. 3, 2026, pursuant to a 90-day notice provision contained in the agreement.
The lease allowed the city use of approximately 800 linear feet of the Navy-controlled outer Mole Pier and associated ingress and egress routes.
The issue had already surfaced publicly during an April Key West City Commission meeting and was expected to be discussed again during Thursday’s commission meeting before the item was abruptly pulled from the agenda last week.
During the earlier discussion, City Manager Brian Barroso warned commissioners that the city’s financial model for the property had become increasingly difficult without substantial cruise ship revenue tied to the pier.
According to Barroso, the city could no longer afford insurance costs or lease-related obligations associated with the property absent continued cruise activity.
The newly obtained termination letter now appears to formalize a dispute that had largely been unfolding behind the scenes between city leadership and the Navy.
“This letter serves as the termination notice,” Navy Real Estate Contracting Officer Heath Adams wrote in correspondence addressed to the city.
The Navy did not specify a reason for the termination.
But additional correspondence obtained and reviewed by Above the Fold reveals significant concern within Naval Air Station Key West leadership over the potential collapse of the long-standing City-Navy partnership surrounding the Mole Pier.
In an earlier email sent to Mayor Danise Henriquez, city commissioners and Barroso, NAS Key West Commanding Officer Capt. Colin Thompson expressed dismay over discussions surrounding possible termination of the lease arrangement and warned it could jeopardize ongoing infrastructure projects funded through the partnership.
“Be assured, the Navy’s commitment and appreciation of our strategic defense community partnership with the City of Key West is unwavering, and we look forward to continuing the shared success that has long benefited our entire community,” Thompson wrote.
Thompson also pushed back against suggestions that the Navy intended to unilaterally restore minimum annual rent payments previously removed through lease modifications.
“We were surprised by the suggestion that the Navy may reinstate the minimum rent, especially as we were not contacted for discussion on this matter,” Thompson wrote.
The base commander emphasized that the lease could only be modified through mutually signed written agreements between the city and federal government.
The correspondence also raised concerns about the future of major sinkhole repair work tied to the Mole Pier partnership.
“This raises a question about the path forward for the sinkhole project,” Thompson wrote. “Since the funding for this was generated by our partnership, how does the City intend to see this project through to completion if the lease that funds it is terminated prematurely?”
The Navy’s formal termination notice separately states the city remains obligated to complete the pending Mole Pier seawall repair project despite termination of the lease.
According to the letter, the seawall repair obligations “will survive termination of the Lease,” and the city must continue the work “to completion” under previously negotiated terms.
The dispute also threatens future Race World Offshore powerboat events traditionally associated with the Mole Pier area.
“Ending the lease may impact our ability to support the annual boat races, as we may not have sufficient time to get a required real estate vehicle in place for this year’s race,” Thompson warned in the email.
The Navy’s termination notice similarly states that any future use of Navy property for Race World Offshore championships or other events would require a newly negotiated real estate agreement with the Department of the Navy.
Heath and Thomspon did not respond for comment by deadline.
Beyond the immediate financial and operational fallout, critics say the larger concern is what happens if the Navy ultimately negotiates directly with a private operator rather than the city.
Some residents and cruise ship activists fear such a move could reopen the door to larger and more frequent cruise ship calls at the Mole Pier, particularly because the property exists outside direct city ownership and operates under federal control.
Unlike city-owned waterfront property, the Outer Mole is part of an active military installation controlled by the federal government. While the city historically operated there through lease agreements with the Navy, critics argue a direct lease between the Navy and a private operator could significantly reduce the city’s practical leverage over cruise operations at the pier.
The Mole Pier has long occupied the center of Key West’s bitter political wars over cruise ships, tourism economics and waterfront control.
The fight over cruise ships in Key West has stretched across multiple election cycles and court battles, becoming one of the island’s defining political and cultural fault lines.
In November 2020, Key West voters overwhelmingly approved the “Safer, Cleaner Ships” referendum package, which sought to cap daily cruise passenger arrivals, prioritize smaller vessels and effectively block the largest cruise ships from city-controlled docks.
But in 2021, Gov. Ron DeSantis signed legislation overturning the local measures after an intense lobbying push by the cruise industry and allies tied to the state’s maritime sector. Critics of the repeal pointed to a broader political campaign surrounding the legislation, including heavy lobbying efforts linked to billionaire Pier B operator Mark Walsh, whose companies controlled privately operated cruise infrastructure in Key West and who later donated $1 million to DeSantis’ reelection campaign.
Cruise ship opponents regrouped in 2022, when the Key West City Commission unanimously adopted the so-called “One Ship Policy” through Resolution 22-073, limiting city-controlled docks to a single cruise ship per day. Supporters of the measure argue the policy has effectively eliminated the largest cruise ships from city-managed piers at Mallory Square and the Outer Mole while reducing overall cruise traffic into Key West waters by roughly 50%.
Because the Mole Pier is federally controlled Navy property operating through lease agreements rather than traditional municipal ownership, critics have long argued it represents a unique wildcard in the city’s ongoing cruise ship debate.
The property’s dual role as both an active military installation and major cruise berth has repeatedly complicated negotiations between local officials, state leaders and federal authorities.
It remains unclear whether the Navy intends to pursue a replacement agreement with the city, another governmental entity or private operators following termination of the current lease.
City Commissioner and Mayoral candidate Sam Kaufman had his agenda prep meeting earlier on Wednesday, meeting with City Staff.
“This decision by the Navy appears to have come quickly and, from what we understand, was not expected by City staff. Given how these types of agreements are typically handled, the speed of this action raises important questions about how we got here and what communication took place,” said Kaufman.
“The Outer Mole has been an important part of our long-standing partnership with the Navy and plays a key role in events like the November boat races, which provide a meaningful economic benefit to our local community. The reference to needing a separate real estate agreement for those races creates uncertainty that we need to address right away.”
Kaufman said that he had also began hearing concerns that a change could open the door to private leasing of the property, including for uses like cruise ships.
“That’s a fair question,” Kaufman said. “Because the Outer Mole is federal property, the legal framework is more complex, and it’s not as simple as applying City code in the same way as other locations. That’s exactly why we need clarity right away.”
Kaufman continued, “What I can say is this: the people of Key West have been very clear about their expectations when it comes to cruise ship activity. Any proposal that moves in that direction needs to be fully transparent, carefully reviewed, and consistent with the will of our community.”
“Moving forward, we need clear communication and a coordinated approach, said Kaufman. “My focus is on preserving our relationship with the Navy, protecting important community events, and making sure the public is fully informed as we work through what comes next.”
City officials had not publicly commented on the formal termination notice as of Wednesday afternoon, with Barroso and Henriquez not responding to emails.
“What impact, if any, this may have on cruise ship operations, is unclear. While under City control, the Mole has been governed by Key West’s One-Ship Policy. Our Committee plans to engage Capt. Thompson proactively to ensure continued NASKW awareness of Key West’s voter-supported referendums, legislation, and policies regarding large cruise ships and their adverse environmental impacts.”
Although not listed on the agenda, the issue is expected to surface again during Thursday morning’s Key West City Commission meeting, which begins at 9 a.m. at City Hall, 1300 White St. The meeting will be live-streamed on the city’s website.