Town seeks new Sands operator

Hempstead Town Supervisor Laura Gillen announced on Tuesday that the town was seeking a new partner to run the Sands in Lido Beach, and that the current vendor did not have a contract with the town to run the catering hall.

At a news conference in front of the facility, Gillen told reporters that the operator of the facility, Dover Sands Inc. –– owned by the Dover Group, based in Freeport — has not had a valid contract with the town since 2011, and called on the company to cease operations. Since the agreement expired eight years ago, the arrangement between Dover and the town, Gillen said, appeared to be a “verbal or oral agreement” and she described it as “highly questionable.”

“To be absolutely clear, it is illegal under New York state law to authorize a deal such as this one without a properly executed contract,” Gillen said, “and without a public vote.”

Her order that the Sands cease operations continues an ongoing battle between Gillen and the Dover Group CEO, Butch Yamali. The dispute began in July, when Gillen criticized a contract extension allowing another townowned Lido Beach property, the Malibu Shore Club, to stay under the operation of Yamali. The extension was agreed to by Yamali and town officials, but was not brought to Gillen’s attention. She described the agreement as a “backroom deal.” Yamali responded by accusing Gillen, who is seeking re-election in November, of politicizing the contract dispute. Yamali and the town are now in litigation over the Malibu contract extension.

The only known agreement to operate the Sands, Gillen said, was a 2011 letter stating that Dover Sands Inc. would pay the town 10 percent of its profits in lieu of rent for its first year of operations, and granting Dover control of the catering hall for 30 months beginning that January.

Gillen said that Dover Sands rarely threw parties at the venue. She added that in 2018, Dover paid the town about $20,000 for eight events there, and so far this year, the town has received about $11,000 for four parties. Those payments, Gillen said, amounted to less than the 10 percent of profits Dover agreed to pay the town.

The Sands property is valued at $66 million, Gillen said, adding that Dover’s operation of the property is not benefiting taxpayers. The town issued a “request for expressions of interest” to attract a new partner to operate the Sands and “revitalize” it in order to better benefit town residents and bring in revenue, she said.

Brian Finnegan, of Todd Shapiro Associates Public Relations, which represents the Dover Group, denied any wrongdoing.

“Dover is under contract with the town to operate the Sands at Lido Beach,” Finnegan said in a statement. “A request for proposals process was completed, and a contract was negotiated and agreed upon. Dover is current with all payments, and the town has been fully compensated pursuant to the terms of the contract.”

The town issued Dover Sands a cease-and-desist order to stop booking future events at the Sands, and Gillen said that town officials hope to speak with people who already have reservations to “make sure no one gets harmed in the interim.” According to Gillen, the town does not have the proper insurance to host events, and there is no protection for taxpayers from potential liability at the facility.

For his part, Finnegan said that Dover has the proper insurance to operate the catering hall. “There has never been a lapse of insurance,” he said. “Supervisor Gillen is again incorrect. The supervisor would be well served to review town records before attacking a well-respected vendor who has provided four decades of quality services to Hempstead residents.”

Finnegan did not immediately respond to a request to provide copies of the contract and the insurance policy.

Through a spokeswoman, Susan Trenkle-Pokalsky, Republican Town Councilman Anthony D’Esposito said that Gillen and her staff received “copies of contracts and related materials for the Sands and the Malibu” two weeks after taking office in 2018. He also accused Gillen of “playing politics.”

When asked for copies of the contract and additional information, Trenkle-Pokalsky was unable to provide the documents, but directed the Herald to file a Freedom of Information Law request.

Mike Fricchione a spokesman for Gillen responded to D’Esposito’s claims. “Supervisor Gillen has been actively cooperating with law enforcement since last year to bring about much-needed change in the town, so it’s a little surprising that the councilman’s focus isn’t on how the taxpayers have been getting the raw end of what looks like a clearly illegal deal,” Fricchione said. He added that if Dover and D’Esposito have a contract, they should produce it.

Dover is facing scrutiny from the U.S. attorney’s office for the Eastern District of New York for its operation of the Malibu Shore Club. Town records released in July showed that Dover owed the town over $500,000 in back rent for the club, which Gillen said has now surpassed $800,000.

In August, the U.S Attorney’s office subpoenaed the town for contracts and other documents related to concessions at Malibu and other town properties in Lido Beach run by the Dover Group, including the Sands.

Gillen said at Tuesday’s news conference that she would turn over all documents to the U.S. Attorney office in order to further investigate the town’s dealings with Dover. “What is clear is that the taxpayers of the town have been getting the short end of the stick when it comes to this deal,” she said, “[which] was made behind closed doors with handshakes, slaps on the backs and nods.”

Nadya Nataly contributed to this story.