Bellport Residents Urge Delay in Country Club Contract

Tap the breaks was the message from residents to the trustees considering an extension of the catering contract for the Bellport Country Club, the village’s largest generator of cash. With the majority of the board, including Mayor Ray Fell, not standing for reelection, they’re looking to lock in a long-term license agreement with South Country Catering before they leave office this summer.

The issue prompted a larger than usual turnout for a village meeting with the trustees rearranging their regular agenda to accommodate the crowd. Up first was Village Attorney David Moran who provided a detailed outline of the contract renewal process and sought to dispel misconceptions about COVID-interrupted negotiations that started back in 2015. “The board believes that this agreement is in the best fiduciary interest of the village,” Moran said, noting that there was no legal requirement to make the draft public prior to the meeting, “but the board chose to be transparent, open and honest about the entire process.”

Residents complained that “transparency,” however, is not the watchword for the process the village used in providing the public with information. While the draft document was made available to residents, they complained that the mayor directed the village clerk to sit with them and not to let anyone have a copy, take a photo, or even take notes on the agreement. “Indeed, the village clerk actually ended sessions if note taking occurred,” one resident said. “The village’s actions prompted the swelled audience who were demanding answers.”

With a few years left on the existing 20-year deal, a dozen residents out of a crowd of about 100 questioned the need to renew the lease at this time, especially with new trustees coming in with the June 20 election. “This is a breach in the spirit of the term limit law,” resident Peter Shulte told the five village board members. “It is normal to give a new board time to handle it. This is not a particularly good policy decision,” he added, urging the officials to have faith in their successors.

Mayor Ray Fel

Moran stressed that the deal is advantageous to the village since it addresses various issues that may not be resolved through a new bidding process. Under the proposal, the village authorizes the caterer to undertake upwards of $1 million in improvements to the country club including a new roof, an oil-to-gas conversion, and electric upgrades to an asset that generates about $2.5 million annually. These may not be offered by a new licensee, Moran suggested, and would leave the village liable to make the improvements, especially the roof. According to the village attorney, a $1 million capital expenditure would amount to a 9.6 percent tax increase to village residents, while $1.5 million would jack up taxes 11.2 percent.

“Nonetheless, the authorization does not require competitive bidding and violates the state’s municipal construction bidding laws,” village resident Lee Snead said. “Moreover, if such work were to be undertaken by the caterer and the village later cancelled the agreement, a provision in the agreement requires the village to repay the caterer.”

Bellport is already facing a 6.6 percent tax increase to cover a $5.6 million spending plan that is 6.2 percent higher than last year’s, according to Mayor Fell, who noted that $2.5 million of the village budget is covered by income generated by the country club. The tax hike, which pierces the two percent state-mandated tax cap, represents a $165 increase for the average Bellport homeowner. The budget will be the subject of a village hall hearing April 10 at 6 p.m. There are currently no announced candidates in the June election for the open board seats, currently held by the mayor and trustees Michael Ferrigno and Robert Rosenberg, each carrying a two-year term.

The payment of $288,000 in rent not paid by the caterer while the facility was shut down during COVID was another hot topic among residents leading up to the meeting. The deal on the table recoups the money, paid over eight years, Moran said, and would not subject the village to litigation in trying to collect if the South Country lease is not extended. Interest on the money does not appear to be part of the deal. Paving work previously performed by the village would not be reimbursed under the agreement. “This draft is the result of a negotiated process, Moran said, “and with any negotiated process, you win some and you lose some.” The proposed agreement would run 30 years starting this year and locks in three percent increases in the rent each year.

When asked by residents why the proposal had not been reviewed by the village’s Budget and Fiscal Policy Committee, the Mayor stated that it had been reviewed by them, only to be corrected by the committee’s chair, Michael Foster, who pointed out that their review had been done when the village attempted to hash out a deal in 2018. Foster reported that the caterer had changed 20 major points that were previously agreed to. “It was take-it-or-leave-it and they dropped the negotiations,” he said, adding that the committee would be willing to analyze the new proposal if requested by the trustees. Another member, Jay Diamond, said leaving the policy committee out of consideration for the new deal was an “extremely bad process foul.”

Leslie O’Conner, who was deputy mayor in 2015 when the lease renewal talks began, echoed resident requests to delay approval and allow for a finance committee review. “We greatly value the work of Mr. Foster and the budget committee,” O’Conner told the board. Another resident, Ann Hayes, urged the entire board to vote on the agreement, not just give the mayor the authority to sign the deal. The trustees voted unanimously to postpone action on the matter until their April 24 meeting.

Brian Ursino, a village resident who said he has 22 years-experience in commercial real estate, honed in on the formula used to arrive at the rent for the country club. “You have it backwards,” he told the board. “You don’t base the rent on what the renter can afford, but what the market will bear.” He urged the trustees to put the lease out to bid, stating, “Tenant improvements can be required in the bid. There’s a lot you can do with a willing tenant, including higher rent.” Ursino expressed his opinion that improvements to the facility would allow the caterer to generate more income and pay higher rent. He also commented that provisions allowing the village to cancel the new lease at any time, as recommended by an attorney hired by the village to review the current contract, would be open to litigation. “You cannot sign this in its current form,” Ursino stressed.

“After the country club was closed for 18 months, we were not sure we would even have a caterer,” Moran told the village residents. “They have a strong management team and have top-line quality standards. The solvency of the entity is important,” Moran noted, adding that the village has never received a complaint about South Country’s services. He pointed out that when the village put out a request for a company to operate the club’s Grill Room, the operator that appeared to be the best responsible bidder left after three months. “They left us scrambling,” Moran said. “We don’t want that to happen again.”

“The Village appears poised to sign an agreement that is unreviewed as to what the proper rent should be, contains provisions that clearly violate the public bidding process and would subject the village to litigation and cost recovery if it were terminated, all while the present agreement still has four and a half years left in it,” Snead concluded. Residents have clearly stressed the need for additional review and to allow the next administration to negotiate the deal. The proposed agreement looks like what it is, a “sweetheart deal” by a Mayor who will not have to deal with the consequences of his actions.”

Requests for comment from South Country Catering went unanswered.