Judge suspends settlement process between town, Montauk restaurant

A state Supreme Court judge issued a stay to East Hampton Town that will suspend the implementation of a settlement between the town and Montauk restaurant Duryea’s Lobster Deck over zoning issues and operations at the restaurant, East Hampton officials announced Thursday.

The central issue revolves around the restaurant — located on Tuthill Road in Montauk — seeking a certificate of occupancy to allow the traditionally counter service eatery and fish market to function as a sit-down restaurant. The restaurant’s initial site plan approval request to the town’s Planning Board was withdrawn, according to town officials, after several issues were raised during the review process regarding what activity was legally permissible on the property.

Marc Rowan, a private-equity billionaire who owns the Montauk restaurant, later filed three lawsuits against East Hampton in March 2018 at State Supreme Court in Riverhead.

The town initially agreed on Jan. 25 to a settlement with Rowan that would allow Duryea’s Lobster Deck to operate as a sit-down restaurant, among other stipulations.

The agreement to settle drew criticism from residents and Town Councilman Jeff Bragman.

“When it got to the end point, I was uncomfortable because the settlement was very far-reaching and it basically conceded all of the points in favor of the property owners,” Bragman said in an interview Friday. Bragman said he was also alarmed because the board had not had a chance to review the settlement.

According to a Town Hall statement, East Hampton Supervisor Peter Van Scoyoc, Councilwoman Sylvia Overby, and Bragman — along with Town Attorney Michael Sendlenski and other officials — testified at a Wednesday hearing at State Supreme Court in Riverhead that the stipulation of settlement was invalid.

The reason, town officials told the court, was because the board did not vote whether to authorize the settlement before it was finalized, a practice which governing bodies typically undergo with settlements.

“The agreement was not signed by the supervisor and was signed only by the town attorney before it was finalized by the court,” the statement read.

"As has been discussed with the town for years, the only new construction here is for an advanced septic system which the town has expressly authorized and encouraged — and as the town announced, the whole matter is now before the board of zoning appeals," Michael G. Walsh, a Water Mill-based attorney representing Rowan, said in a statement Friday.

Van Scoyoc did not return immediate requests for comment Friday. However, in a statement, Van Scoyoc said the town was “pleased that the judge granted the town’s request, as it will allow continued review and discussion of a potential settlement of the three lawsuits” filed by Rowan.

Van Scoyoc also stated the stay will allow both parties to continue negotiations to “achieve a settlement that takes into account both the rights of the property owner and the concerns of the town.”

Bragman said he was “relieved” by the court’s decision.

“It was essential that not only we see the [settlement] stipulation, but it was essential that a formal vote be conducted. Adherence to the law is extremely important,” Bragman said.