Butch Yamali at Malibu Beach Club on Monday, Aug. 25,...

Butch Yamali at Malibu Beach Club on Monday, Aug. 25, 2019, in Lido Beach. Credit: Howard Schnapp

The Hempstead town board is scheduled Tuesday to vote on awarding a 15-year contract to operate a town-owned beach club to a company that has amassed debts to Hempstead and faced scrutiny from federal law enforcement.

The board is to consider a resolution to grant the vendor, Dover Gourmet Corporation, of Freeport, a new license agreement to run Malibu Beach Park in Lido Beach until 2036. Dover has operated the facility since 2009.

The resolution would also settle litigation brought by Dover last year over the validity of a prior contract extension to run Malibu.

The measure, if approved, would conclude more than a year of controversy in Hempstead over Dover, whose work at Malibu led to allegations of corruption and political grandstanding traded between from the former town supervisor and Dover's chief executive Butch Yamali.

Neither Yamali nor Hempstead Supervisor Don Clavin responded Sunday to requests for comment.

Donald Chesworth, an attorney representing Hempstead, said in a statement the settlement "is in the best interests of the Town residents and provides predictability as to the outcome of all outstanding claims by both sides without further litigation costs." He also said the new agreement "includes important institutional safe guards by requiring all changes and amendments to be subject to the approval of the Town Board."

According to the proposed contract, Dover has amassed $1.2 million in unpaid license fees to the town to operate Malibu.

Dover would have until April 2022 to pay them back to Hempstead. But, as part of the new contract, the town would also offer Dover $2.4 million in credits for prior capital improvements at Malibu.

If the contract is approved, Dover would pay Hempstead a $560,000 license fee annually to operate Malibu. Under a previous contract extension, Dover was to pay the town around $534,000 annually.

Hempstead’s former parks commissioner and comptroller authorized that extension in April 2019, enabling Dover to run Malibu for another five years.

But the company had gone months without paying the license fees on the property.

Former Hempstead Supervisor Laura Gillen, the only Democrat to hold Hempstead’s top office in the past century, criticized the town’s dealings with Yamali last summer, arguing Republican officials in Hempstead had offered him a "sweetheart deal" because of his connections to the local Republican leadership.

Newsday reported last summer Yamali had paid Nassau County Republican Committee chairman Joseph Cairo and Cairo’s son more than $1 million over 10 years for legal and project management work at Malibu.

In August, the U.S. Attorney for the Eastern District of New York subpoenaed Hempstead for records related to Dover. A spokesman for the U.S. Attorney's office declined Sunday to comment on whether the probe is ongoing.

Yamali contested Gillen’s claims, arguing she was seeking to politicize the issue to bolster her reelection campaign. He went to state Supreme Court in Nassau to get the contract declared valid. Gillen lost her seat to Clavin, a Republican, in November 2019. Republicans now control the town board by a six-to-one margin.

Yamali disputed that his firm owed Hempstead anything. He said town officials had instructed him not to make the rental payments until the two sides agreed how to factor in millions of dollars in capital improvements he made at the aging facility, which features hundreds of beach cabanas, a restaurant, pools and tennis courts.

In an interview shortly after he took office in January, Clavin declined to state his position on the Dover contract, saying he was awaiting the conclusions of the litigation and any federal investigation.

He did not respond to questions Sunday about whether he supports the proposed settlement and contract, whether Dover’s history of delinquent payments was a concern and whether Hempstead considered proposals from other firms to operate Malibu.

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