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Town ups legal budget to handle lobster restaurant case

The owner of Duryea's Lobster Deck in Montauk

The owner of Duryea's Lobster Deck in Montauk is suing to turn the property into a sit-down eatery. Credit: Gordon M. Grant

East Hampton Town could now pay more than $400,000 defending litigation brought by the billionaire owner of Duryea’s Lobster Deck following the filing of the eighth lawsuit in the ongoing dispute over the Montauk property.

Marc Rowan, who has a home in Southampton and is the co-founder of equity firm Apollo Global Management, bought the property under Sunrise Tuthill I LLC for $6.3 million in 2014 and soon after rolled out a more upscale menu at the seasonal eatery and began seeking approvals to offer a sit-down restaurant at the takeout. The Duryea family had tried to operate a restaurant on the site, but the town Zoning Board of Appeals decided in 1997 it could not. 

Rowan began filing petitions against the town in March 2018, essentially requesting that a restaurant with waitstaff be approved.

But Rowan is refusing to abide the traditional land review process and has filed multiple proceedings against the town as “leverage” in gaining the approvals, said Steve Stern of Carle Place-based Sokoloff Stern LLP, the law firm representing the town in the matter.

“They’re trying to strong arm the town,” Stern said. “But the town continues to insist that Sunrise Tuthill comply with these processes for a reason.”

The town board voted 5-0 at its Dec. 19 meeting to increase the cap to pay Sokoloff Stern LLP from $270,000 to $420,000. Stern noted that Sunrise Tuthill has attorneys from at least three firms working on the case and has likely spent more.

“At every turn, we seem to be hit with another one of these,” Stern said.

The most recent lawsuit, an Article 78 petition filed in state Supreme Court on Nov. 25, asks that Sunrise Tuthill I LLC be allowed to install a septic system on the property after the town building inspector’s office denied its permit application. Principal building inspector Ann Glennon in a November letter noted the planning board decided in July the property would need a variance to install a commercial system on the property, which is in a residential zone. 

Sunrise Tuthill attorney Michael G. Walsh wrote in the petition the building department “moves the goalposts” in evaluating his client’s application and asked that the septic permit be granted without full site plan approval.

“The town is trying to force petitioner into a broad site plan review, which will give the town the opportunity to cut back the long-standing food service on the property,” the petition states.

Walsh could not be reached for comment.

The town earlier this year had reached a settlement with Rowan that, among its stipulations, would allow the business to offer waitstaff service. The town hired outside counsel to defend the matter following criticism of the deal from the public, including neighbors who thought it would bring too much traffic into the community. The settlement was later stayed by a judge.

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