Oyster Bay has terminated its concession agreement with indicted restaurateur Harendra Singh at Tappen Beach, town officials announced Monday.
The town’s outside legal counsel sent an emergency request for proposals to six companies on Friday to operate the concession for the summer season.
“It became clear there was no possibility of a negotiated resolution,” the town’s outside counsel, Jonathan Sinnreich, of Central Islip, said Monday. “We have to be open for Memorial Day, we couldn’t wait any longer.”
The termination is the first by the town of Singh’s agreements since his financial problems became public and he was charged in federal court on Sept. 9, 2015, with 13 felony counts including bribing an Oyster Bay town official to obtain $20 million in loan guarantees. He has pleaded not guilty.
The termination comes as the town faces a $1.8 million lawsuit from one of Singh’s creditors that alleges the town guaranteed a loan for improvements at the facility, Singleton’s Seafood Shack at Tappen Beach.
The concessionaire, HVS Tappan Beach Inc., a company registered in the name of Singh’s wife, Ruby, was offered the opportunity to take care of the default last year and meet with town parks commissioner but did not, Sinnreich said.
“Today I got notice that they were declining that opportunity to have a meeting and were not contesting the termination,” Sinnreich said.
That notice, he said, came from Mineola attorney Joseph Conway and from Ruby Singh, neither of whom responded to requests for comment.
Singh’s company was about $56,000 behind in payments to the town, Sinnreich said. At a rate of $2,077 per month due to the town, the arrears equal approximately 27 months of payments.
Although the town could have terminated the agreement 60 days after the default notice last year, it did not, though Sinnreich said he began contacting potential replacements last fall.
Singh’s company will not receive a termination payment, Sinnreich said, because the agreement was canceled because of the default. The termination payment would have allowed the company to recoup some of its investment in improvements at the facility.
The terms of Singh’s agreement at Tappen, his payments to the town and his financial statements have not been made public by the town. Earlier this year Newsday sued Oyster Bay to obtain access to those documents after the town denied a Freedom of Information Law request submitted in August.
The town has argued in court filings that the information was exempt from disclosure under a provision of the law regarding information compiled for the purposes of law enforcement.
One of Singh’s creditors, New York City-based Atalaya Asset Income Fund II LP, alleged in a lawsuit filed in New York State Supreme Court in Mineola in January that the town had entered into an indirect guarantee of debt for improvements made at the facility.
Emails obtained by Newsday show that in March 2014, former Oyster Bay deputy town attorney Fred Mei and Singh corresponded about a modified agreement at Tappen that contained a loan guarantee with another lender that ultimately did not make the loan.
The following month the Town Board approved 20 year extensions of Singh’s agreements at the Woodlands, a catering hall at the town’s golf course in Woodbury and Tobay Beach. In July 2014, Atalaya loaned HVS Tappan $1.8 million, according to its lawsuit.
Sinnreich said the only Tappen Beach agreement he was aware of was the one entered into in 2013 that ran through 2037. Atalaya alleges in court filings that Oyster Bay “induced” it to loan Singh’s company money by entering into an agreement with the lender and Singh’s company, so that Atalaya would be fully repaid if the HVS Tappan failed to make loan payments.
Atalaya, according to its court filings, notified Oyster Bay in October 2015 that Singh’s company had defaulted, requiring the town to repay the loan.
In January, Atalaya filed suit against Singh, several of his companies and the town, records show. Atalaya’s attorney, Steven Cohn of Carle Place, said the town’s termination of the agreement would not impact their lawsuit.
Oyster Councilwoman Rebecca Alesia said the town would defend itself against the lawsuit.
The Oyster Bay Town Board plans to hold a work session to discuss the requests for proposals at Tappen before its regularly scheduled meeting next week.