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Hempstead votes unanimously for new oversight powers for contracts

The operator of Malibu Beach Park has asked

The operator of Malibu Beach Park has asked a court to declare the contract with Hempsted Town valid. Credit: Howard Schnapp

The Hempstead Town Board voted unanimously Tuesday to require greater board oversight on changes to town contracts, one day after a vendor, whose contract prompted the reform, took legal action against Hempstead.

The board will now have to sign off on any modifications, renewals or extensions to town contracts that change their value by $50,000 or more.

The reform follows Newsday reports on Dover Gourmet Corp.'s contract to run the town-owned Malibu Beach Park in Lido Beach. Newsday reported that Hempstead's comptroller, Kevin Conroy, and parks commissioner, Daniel Lino, signed a five-year extension of the contract in April without the supervisor's knowledge or the board's approval. Supervisor Laura Gillen has decried that extension as a secretly negotiated "sweetheart deal" that will cost taxpayers $169,000 a year.

Newsday also reported that Dover has not paid Hempstead rent on the beachside recreation facility for nearly a year, accumulating a balance of $531,400.

Gillen and Councilwoman Erin King Sweeney, who leads the board's Republican majority and whose district includes the Malibu park, praised the passage of the new oversight measures.

"Commissioners cannot just go renegotiate contracts and amend contracts on their own. They're not elected officials," Gillen said after the vote.

"It's a great first step," King Sweeney said. "This will get to the heart of the problem."

 On Monday, Dover filed for declaratory judgment against the town in Nassau County Supreme Court. The Freeport company asked the court to declare the contract was "lawfully and validly extended, and remains in effect," and that Dover is entitled to a credit against any fees it owes the town for expenses "exceeding its contractually mandated capital improvement obligation."

The contract, for which Dover is to pay Hempstead $560,300 in rent this year, states the company would perform up to $10 million in capital improvements. Butch Yamali, Dover's chief executive, has said he has spent more than $12 million. The contract does not say the town will cover improvement costs beyond $10 million. But Yamali said town officials agreed to do so verbally and instructed him not to make the rental payments until the two sides came to terms regarding his improvement costs.

Yamali declined to comment Tuesday, referring questions to his attorney, Daniel Deegan, who said in a statement: "While there have been comments made to the press, the proper forum for determination of these issues is a court of law."

The U.S. attorney for the Eastern District of New York served Hempstead with a subpoena last week for records related to Dover.

Lino, whom Gillen has called on to resign for his role in the contract extension, attended Tuesday's town board meeting but declined to comment.

"Not until I'm vindicated," he said.

Also on Tuesday:

  • A measure to hire law firm Hogan Lovells to investigate the Malibu contract extension failed, with the five Republican board members and Senior Councilwoman Dorothy Goosby, a Democrat, abstaining from the vote. Gillen voted in favor.
  • The board instead hired the firm Tully Rinckey to represent the town in the Dover litigation.
  • The board tabled a measure annulling the Malibu contract, citing the pending litigation.

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