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Town of Hempstead settles Dover lawsuit

Town board awards company 15-year operating contract in Lido Beach

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The Hempstead Town Board voted on Tuesday to settle a 2019 lawsuit brought by Dover Gourmet Corp., and to award the company a 15-year contract extension to operate a restaurant, concession stand, day camp and beach club at Malibu Beach Park in Lido Beach.

The vote was 5-0, with Supervisor Don Clavin and Town Councilman Anthony D’Esposito abstaining. The board is majority Republican, with Councilwoman Dorothy Goosby the lone Democrat on it. She had her own attorney present on Tuesday, and agreed to the settlement and extension.

Clavin said in a statement that he abstained from voting because the controversy between the town and Dover preceded his tenure.

"Furthermore, I did not serve on the Town Board during this time period, nor was I involved in any aspect of the review of the contract dispute," Clavin said.

Dover’s contract will begin on April 15 next year, and run through April 14, 2036. The company, under the direction of CEO Issac “Butch” Yamali, has operated facilities at Malibu since 2009. According to the terms of the contract, Dover will pay the town an annual $560,000 licensing fee to operate them, compared with roughly $534,000 a year under the previous contract.

The new agreement states that Dover will repay $1.2 million in license fees owed to the town by April 2022, and Dover will receive a credit for roughly $2.4 million, which will be amortized each year over the term of the agreement, for past “capital expenditures” to upgrade facilities on the property.

Going forward, the company must make a minimum of $300,000 in annual capital improvements to Malibu over the life of the contract, at no cost to the town, for a total of $4.5 million in upgrades. Dover may receive a credit for improvements in excess of $300,000, if deemed necessary and approved by the town.

The town’s dealings with Dover came under scrutiny in July 2019 after then Town Supervisor Laura Gillen held a news conference criticizing a five-year contract that Dover was awarded to operate the facilities at the park, which is open to all town residents. According to Gillen, Daniel Lino, a former town commissioner of parks and recreation, and former Town Comptroller Kevin Conroy wrote the contract in April that year, without Gillen’s approval or that of the town board. Lino and Conroy no longer work for the town.

Gillen, who was the first Democrat elected supervisor, lost her seat to Clavin in November 2019.

Several Town Board members and Yamali accused Gillen, who was up for re-election at the time of the news conference, of politicizing the matter. But her criticism was followed by a subpoena from the U.S. attorney’s office for the Eastern District of New York, which asked for contracts and other documents related to concessions at the park and other town properties in Lido Beach run by Dover.

John Marzulli, a spokesman for the U.S attorney’s office, declined to comment on the investigation.

Donald Chesworth, an attorney who represents the town, recommended that the Town Board settle Yamali’s lawsuit. “I think it’s in the best interest of the taxpayers in the town,” Chesworth said at Tuesday’s meeting. “We believe that it resolves the questions which have been raised over the last couple of years. We think it would bring the litigation to a close, which would be a very economically wise thing to do at this point.”

The town’s new contract with Dover states that it may receive an additional credit of just over $560,000 for “Covid business interruption” expenses this year. Dover has until Jan. 8 to present proof of expenses to the town comptroller in order to receive the credit.

Hempstead resident Felix Procacci, who ran for supervisor in 2013, said the settlement was premature and advised the council against approving it.

“First the town should not be renegotiating this contract without putting this contract out to bid,” Procacci said. “Second, the problems with the current Malibu haven’t been fully investigated.”

Procacci said the results of the U.S attorney’s investigation should be concluded and presented to the public before negotiating the new contract.

Yamali and D'Esposito could not be reached for comment.