Hempstead Supervisor Laura Gillen’s resolution to hire outside legal counsel to review a contract with a Freeport catering company that manages Malibu Beach Park passed on Tuesday.
The Hempstead town board approved hiring Hogan Lovells US LLP to provide legal and investigative services to investigate the April 12, 2019 extension of a contract with Dover Gourmet Corp.
Michael Fricchione, Gillen’s press secretary, said Dover Gourmet Corp. filed a lawsuit on Monday to review the contract and that the town has hired civil legal counsel in response.
“Two weeks ago, it was revealed in the media that the town’s parks commissioner and comptroller entered into a secret, unauthorized contract with Dover Gourmet Corporation relating to the town’s Malibu Beach,” Gillen said on July 31.
At a July 31 news conference, Gillen said the contract concerning the town’s Malibu Shore Club at the town’s Lido Beach with the Freeport company led to discounted and reduced fees that resulted in a giveaway of approximately $169,000 in “taxpayer resources” every year.
Dover Gourmet Corp. has had a contract with the town to manage Lido Beach’s Malibu Beach Park since 2009.
She cited a Newsday report in which it was reported that Dover failed to pay the Town of Hempstead $674,000 from 2013 to 2014 and has not paid $531,400 owed in rent in nearly a year.
“The vendor says he was told by town officials, ‘Do not pay,’” Gillen said in reference to Dover’s chief executive, Butch Yamali.
Dover Gourmet Corp. and Yamali did not respond to requests for comment. Yamali said in Newsday he has not paid the rent because he is owed more than $2 million for capital improvements he has carried out at the park.
Gillen said Parks Commissioner Daniel Lino has said that if Dover exceeded its contractually mandated obligations, there would be an offset for rental and PILOT program payments. According to Newsday, Dover’s balance owed is $504,700 in rent and $26,700 in PILOT fees, or payments in lieu of taxes. This agreement not in the contract, Gillen said, but rather that Yamali has said that it is a “secret side oral agreement with ‘town officials.’” Gillen said this claim has been disputed by the town attorney.
“So we have the vendor saying one thing, the parks commissioner and the town attorney saying another. I submit that certainly any purported, preposterous oral agreement would not be legally binding or enforceable,” Gillen said.
Her position is that the contract and alleged oral agreement should be investigated by people outside of the Town of Hempstead to avoid conflicts of interest.
She also called on Lino to resign from his post saying, “Employees, no matter how long they have been with the town, do not have the right to secretly execute contracts involving taxpayer money without authorization from publicly elected representatives.”
Lino did not respond to requests for comment.