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May 21, 2019 5:11 PMPublication: The Southampton Press

Rowan, Van Scoyoc Offer Differing Accounts Of How Controversial Montauk Restaurant Settlement Was Reached

The owner of Duryea's Lobster Deck says town officials invited him to sue to provide
May 21, 2019 5:11 PM

The hedge fund manager who owns Duryea’s Lobster Deck in Montauk claims that East Hampton Town Supervisor Peter Van Scoyoc urged him and his lawyers to sue East Hampton Town to provide “political cover” for a broad resolution of several longstanding legal sticking points with the popular restaurant—a characterization the supervisor calls “totally wrong.”

In a phone interview last week, Marc Rowan, who bought the waterfront restaurant and retail complex in 2014, said that Mr. Van Scoyoc and other town officials had met with him and his attorneys in February 2018 and offered a suggestion: Suing would be the best way to resolve zoning conflicts that had swirled around the increasingly popular business for years.

The billionaire investor said that he is frustrated by the town’s backing out of the settlement agreement after residents complained it conceded too much to the property owner, and said that the town seems to be spending thousands in legal fees simply to avoid admitting its officials had okayed the deal.

“On February 14, 2018, I met with Peter, [former Town Attorney] Michael Sendlenski and David Lys, and we discussed the issues that were at hand: that nobody had said they are opposed to what we’re doing there, that the dock was hazardous, and that I’ve been trying to get a [certificate of occupancy] for the uses there,” Mr. Rowan said.

“And Peter said to me, ‘That’s fine—I want the money for road improvements, I want you to promise you’re never going to bring a ferry in there, and we want the septic upgrades.’ And they said, ‘We want you to bring these lawsuits so we can have judicial supervision.’”

According to an affidavit Mr. Rowan submitted in the newest of five lawsuits he now has pending against the town, which seek to block the Town Zoning Board of Appeals from rescinding a certificate of occupancy issued in accordance with the settlement stipulations, Mr. Rowan said that Mr. Van Scoyoc had been seeking “political cover” for granting the various stipulations for the property that were not worth disputing in court.

“At that meeting, Mr. Van Scoyoc stated to me that he wanted to globally resolve the issues relating to the premises, but that the Town Board did not feel that it could negotiate a resolution without judicial assistance because of town politics and public pressure,” the affidavit reads. “Mr. Van Scoyoc accordingly asked petitioner to file suit to provide the Town Board with political cover.”

Mr. Van Scoyoc this week said that Mr. Rowan’s characterization of the discussion is “totally wrong.”

Rather, the supervisor says, he told Mr. Rowan that the town position was that much of what he requested was not something that the town could grant in accordance with its laws, and that if Mr. Rowan thought otherwise, he would have to take the matter to court.

“They came in saying, ‘You should grant us all this stuff—why are you giving us a hard time about the dock and everything?’ And I said our position is that they have to follow the laws of East Hampton, and that if they think they don’t have to, and that the patents give you some other right, then let the court decide,” Mr. Van Scoyoc said. “Our position was: ‘We don’t think you have these rights.’”

Attorneys for Mr. Rowan filed three separate lawsuits in March 2018 addressing different issues on which the property’s owners—current and former—had long been unable to come to agreement on with the town.

One sought to force the town to issue a certificate of occupancy for the existing uses of the property, including a restaurant with 90 seats.

The second insisted that the town has no jurisdiction over the shoreline of the property—where Mr. Rowan had conducted a major reconstruction of the property’s deteriorating pier and rock revetments in 2015, without seeking any permits from the town—by virtue of rarely applied state “patents” issued decades earlier by state officials at the behest of the former owner, the political power broker Perry B. Duryea.

The third lawsuit also sought to undo another bit of wrangling by the late Mr. Duryea, which the suit claims created a separate tax map lot for the family home at the northern end of the property, even though the property itself had never been legally subdivided. The suit insisted that the lot be considered a single parcel, all of it zoned for commercial use, even though a town residential zoning line runs through it along the tax map line boundaries created for the residence improperly.

Over the ensuing months, the town attorney, Mr. Sendlenski, filed no opposing documents to any of the three lawsuits. Mr. Rowan said there were, however, seven settlement conferences between the two sides. Town Board members have said that Mr. Sendlenski gave them at least two closed-door updates on the progress of the settlement discussions, but that they never authorized him to sign a settlement and never saw any documentation of the stipulations.

But in January, a settlement between Mr. Rowan’s representatives, and signed by Mr. Sendlenski on behalf of the town, was filed. The stipulations in the settlement said that the property would be issued a certificate of occupancy, declared the property to be a single, commercially zoned parcel and conceded that the town did not have authority over the shoreline areas. It also dismissed a handful of code violations for improvements made without building permits.

Mr. Rowan, in turn, would agree to make roadway improvements, ban any use of the large pier for ferry or cruise ship docking and install a nitrogen-reducing septic system to serve the entire property.

When first asked about the settlement, Mr. Van Scoyoc said it was a reasonable agreement that would address some concerns of the town and allow the popular business to continue operating while allowing improvements to the property.

“This puts to rest some of the jurisdictional issues and other questions about what he can and can’t do there,” Mr. Van Scoyoc said in February. “It puts to rest the cruise ship and ferry concerns there, which could have been out of the town’s control, and they had a failing septic system there, and they’ll be fixing the drainage issues at the bottom of the hill. It just cleans everything up.”

The following week, however, after Springs resident David Buda, who had pored over the settlement documents, said that the stipulations seemed to allow expansions of use and facilities that hadn’t been previously acknowledged, neighbors became outraged at the agreement.

Councilman Jeff Bragman offered that he didn’t think the town had done enough to fight the case—a point that led to an impassioned defense of the town attorney’s office by Mr. Sendlenski—and shortly afterward the board agreed to hire an outside law firm to review the settlement.

In April, that firm, Sokoloff Stern, filed a court request to have the settlement vacated, and after courtroom testimony from Town Board members and Mr. Sendlenski, State Supreme Court Justice David T. Reilly issued a temporary stay on the stipulations of the settlement.

Last week, the judge clarified that stay, saying that the certificate of occupancy for the property that had been issued by Building Inspector Ann Glennon—who also testified in court that she had done so with objections—in accordance with the settlement be left intact until he has ruled on whether the settlement in full should be entirely vacated.

That clarification allowed the restaurant to open last week.

Mr. Rowan has since filed two more lawsuits, one demanding that he be allowed to install the waste treatment system, the other seeking to block the ZBA from revoking the certificate of occupancy.

And the owner—who is the co-founder and managing director of the private equity and venture capital company Apollo Global Management—said that the renewing the fight over the property is folly.

“Does anyone really think this settlement was negotiated for over a year without the town’s approval?” he said. “They’ve probably spent $250,000 now—at the rate they’re spending, they will spend $1 million, just to not tell Lisa Grenci the truth,” he said, referring to a neighbor of the restaurant.

Mr. Van Scoyoc brushed off the criticism, however. He said there was no effort to cloak anything and that parts of the settlement did make perfect sense, while others perhaps did not.

“We know that upgraded septic is a benefit to everyone at that location, but, at the same time, what’s the owner entitled to?” he said. “But there’s no political cover in my position, nor have I ever sought political cover. We take on some of the most difficult issues the town faces, head-on … and we’ll get to the bottom of whether the concerns raised by neighbors are correct or the issues raised by [Mr. Rowan] are legitimate. We have to continue to sort through it.”

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Political cover? Yikes! And considering the Town Attorney bid a hasty retreat this is getting really ugly really fast. It will be interesting to see which law firm he lands at. Anyone care to make a friendly wager that it's one that he's negotiated one of his sketchy settlements of stipulation with?
By dogtired (29), north sea on May 23, 19 11:14 AM
Political Cover? Add to the fact that he said to Bragman at a Town Board meeting "4 of the 5 of us worked very hard on this Jeff"; the fact that he and Cantwell sat on the water pollution problem in Wainscott for over 6 months without letting the residents know the potential harm to their drinking and bathing water; the Deep Water debacle where he was more interested in thte potential compensation they would receive than the disruption and potentail hazards to the community; the hamlet plan for ...more
By pluff (60), East Hampton on May 23, 19 4:36 PM
1 member liked this comment
Spot on pluff!
By BonacPlague (11), Gansett on May 23, 19 6:32 PM
It is amusing to read tag team comments from disgruntled former employees.
By fusioncontusion (13), East Hampton on May 25, 19 7:42 PM
fusionconfusion, obviously a new moniker for the upcoming campaign, believes like many in his party, that the public is generally stupid and everything will blow over. Well, fusionconfusion, the public doesnt have their heads buried in the sand and can actually make fact-based observations about past events. And the public has a memory of patterns of performance. One doesnt have to be an insider to make such observations.
By pluff (60), East Hampton on May 26, 19 11:50 AM
Fusioncontusion...need to clean the glasses. And you are correct, the public has a long memory of performance and demeanor.
By fusioncontusion (13), East Hampton on May 26, 19 1:44 PM
Fusioncollusion - Talk about demeanor. Over the last six years when any citizen asked the Board a question, the board dialogue was as extensive as "Thank you for your comments"..That because all the dialogue was in executive session. No need to have transparent discussions. Hey, when push comes to shove, blame it on the former Town Attorney even in the face of the Supervisor saying " 4 out of 5 of us worked very hard on it Jeff". Blame it on Mikie. That's it, Blame it on Mikie.
By pluff (60), East Hampton on May 26, 19 4:29 PM
Pluff, I like where your going with the fusion rhyme idea. Fusion this year in East Hampton has certainly led to confusion and collusion, but it will not lead to substitution because the public is greatly satisfied with the board's current constitution and is not interested in fusion retribution.
By fusioncontusion (13), East Hampton on May 26, 19 9:37 PM
Fusiondilution - Dont take the demise of the Republican Party as public support for Van Scoyac et al. That was just a total lack of leadership on their part. And why is a platform that is opposed to yours considered retribution. With the exception of Bragman, the current Board is not smart enough not to listen to all of the Town. They have chosen not to do that..That is deliberate on their part. The election will satisfy whether we are satisfied with the boards current constitution.
By pluff (60), East Hampton on May 27, 19 8:58 AM
And thus we have the fusion delusion eloquently stated by Pluff.
By fusioncontusion (13), East Hampton on May 27, 19 9:55 AM
After reading the lead article this week Pluff was right....FUSIONCONFUSION. However, Fusiondelusion and Fusionillusion also apply. How about Fusion mess?
By fusioncontusion (13), East Hampton on Jun 5, 19 7:35 AM
Meanwhile Rome is burning!

Fiddle Fiddle Fiddle !!!
By Nero (301), Sag Harbor on Jun 5, 19 8:10 AM