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May 14, 2012 3:55 PMPublication: The East Hampton Press

East Hampton Town and Surf Lodge Settle For $100,000

May 16, 2012 10:28 AM

East Hampton Town officials and the Surf Lodge, a popular Montauk summer nightspot, agreed to a $100,000 settlement in East Hampton Town Justice Court on Monday, finally closing the book on hundreds of Town Code violations the business racked up during its operations last season.

Attorneys for the Surf Lodge and town attorneys agreed that the business would plead guilty to 100 of the nearly 700 charges leveled against it and pay a fine of $1,000 for each guilty plea.

The violations stem from the business’s site plan, illegal clearing of wetlands, overcrowding and other categories, according to Assistant Town Attorney Robert Connelly. East Hampton Town Justice Cathy Cahill presided over the case.

The settlement offer was the same one that town attorneys extended to the business back in October, said Mr. Connelly.

The Surf Lodge was represented by attorneys Thomas Horn and Richard Hammer. Assistant Town Attorney Patrick Gunn and Mr. Connelly represented the town.

Talks of a settlement have circulated since at least October, when Mr. Connelly first proposed one in court, but the case then took several twists and turns. In March, the Surf Lodge hired a new attorney, Thomas Horn, to replace former attorney Colin Patrick Astarita. Last month, Mr. Horn filed a motion to dismiss many of the alleged violations against the business. Not long after that, news broke that the Surf Lodge was purchased by Montauk Properties LLC.

Mr. Hammer said he represents Montauk Properties LLC, the entity that recently purchased the Surf Lodge from Edgemere Montauk LLC late last month. Montauk Properties LLC, an investment company focused on real estate and hospitality investments, is managed by Michael Walrath, who owns a home in Montauk. Mr. Walrath also recently purchased Lenny’s On the Dock in Montauk this past winter with his partner, James Tchinnis. The new business will be called Swallow East—named in part after Mr. Walwrath’s restaurant in Huntington Village called Swallow. Swallow East will be open this summer.

After the court proceeding, Mr. Gunn, who is also the town’s public safety division administrator, called the settlement the “largest” case enforced by the town’s Ordinance Enforcement Department and the “largest fine” achieved by the Town Attorney’s Department.

Mr. Gunn also spoke positively of the new management and said they have been “proactive” with the town. “The new season’s starting,” Mr. Gunn said. “We’re happy this is behind us.”

Surf Lodge will be open on Friday, May 25. Jayma Cardoso, an original owner of the Surf Lodge, will remain in the mix. She will be a managing partner in the business. In a recent interview, she said the business plans to scale its Friday and Saturday hours back, from closing at 4 a.m. to closing at 2 a.m. The establishment also plans to shut down around 11 p.m. from Sunday through Thursday.

East Hampton Town Councilman Dominick Stanzione, the Town Board liaison to the hamlet of Montauk, lauded the success in court, and said the town’s legal team “should be proud” of the work they accomplished.

“I think it’s an outstanding example of our judicial system working through complex issues,” Mr. Stanzione said. “I am proud with the outcome of that litigation.”

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First a financial miracle, correcting the $30 million mess created by the Democrats, now the single biggest entertainment code violation payment in the history of the town, those are real results by real management. The Wilkinson team keeps hitting it out of the ball park and the Dems and their flunkies continue to moan and groan and obstruct the business of good government in East Hampton. East Hampton has been ahead of the curve on everything. We now see Suffolk and Nassau Counties and Towns ...more
By connwatcher (112), east hampton on May 14, 12 5:28 PM
So the club can continue to pollute the environment and disrupt family life in Montauk as long as the Town gets paid. Got it. Thanks for clearing that up.
By johnj (1024), Westhampton on May 15, 12 12:20 PM
2 members liked this comment
Connwatcher - hate to point this out but there is no "entertainment code" so there couldn't be an "entertainment code" violation. If in fact, "the settlement was the same one that town attorneys extended to the business back in October" why wasn't it settled then? Seems to me the presiding judge, who wouldn't go along with it then, simply didn't like the former attorney and probably should have recused herself ... high drama in the "unbiased" court of Cathy Cahill.
By Board Watcher (534), East Hampton on May 14, 12 5:37 PM
Thanks for the correction...the thought was town code sections that are used or are often used in relation to entertainment/club industry no-no's. Things like occupancy, fire safety, etc.
By connwatcher (112), east hampton on May 14, 12 8:49 PM
This is an example of "free" money to the attorneys. You know the right wingers are always political about all news, usually angry and dumb in their anger hence they miss such important financial related information:

"The settlement offer was the same one that town attorneys extended to the business back in October, said Mr. Connelly.

The Surf Lodge was represented by attorneys Thomas Horn and Richard Hammer. Assistant Town Attorney Patrick Gunn and Mr. Connelly represented the ...more
By KRich (2), East Setauket on May 17, 12 4:19 PM
Clearly a very significant result, and Messrs Connelly and Gunn (as well as all the Ordinance Inspectors invovled in issuing the Charges) should take pride in a job well done. Now, the Town needs to see the wisdom of hiring more Ordinance Enforcement Inspectors so the Department does not fall down on the job due to the current unanticipated staffing problems. David Buda
By davbud (127), east hampton on May 14, 12 7:48 PM
Where are all the Democrats and the yappers from Montauk who are first to criticize everything the Wilkinson administartion does? No where to be found because this $100,000 fine is THE most significant code enforcement action in the history of the Town. For all the Democrat talk over the last 20 years about enforcement and quality of life violations, their elected officials have never ever had this kind of result. This sends the message that in the end you have an administration and staff that ...more
By Yesouthh (21), water mill on May 14, 12 9:19 PM
It is satisfying to see the Surf Lodge punished for its egregious misbehavior, although if one is to credit "the Wilkinson team" for the result, one might just as well credit them for sunny weather. Code enforcement and the town attorneys prosecuted the case. Board members of both parties were observers.
By highhatsize (4217), East Quogue on May 14, 12 10:25 PM
1 member liked this comment
The "Wilkinson team" re-vamped the Public Saftey Division, hiring new management for Code Enforcement. The Attorneys who prosecuted are Wilkinson hirees as well. Credit all involved for hard work and due dilligence in the face of constant criticism.
By blanketsmama (6), Springs on May 15, 12 11:11 AM
Why did The Surf Lodge get away with being scofflaws for YEARS?

In the case of The Surf Lodge, while Town code enforcement officials were issuing hundreds of code violations, elected Town officials were offering these epic code violators cheap parking on public land at the Playhouse, forgiving noise violations, etc.

No matter what "party" comes to power, East Hampton seems destined to have dysfunctional government!...with more 'tude than thought. This time, all the while our ...more
By Thinkhampton (3), Montauk on May 15, 12 12:18 AM
Are you serious? The reorganization of the enforcement effort in East Hampton and the decision to put a seasoned prosecutor in charge of the Public Safety umbrella was Wilkinson's initiative. You have multiple enforcement departments under the direction of an individual with extensive experience in making cases and dealing with those breaking the law - an approach never used in East Hampton. That Wilkinson decision is paying off big time. Look at what we had before - the friend of the former ...more
By Yesouthh (21), water mill on May 15, 12 8:37 PM
1 member liked this comment
$100,000 is a good get, but the purpose of the penalty is not to add to the town coffers but to prevent the original abuses from being repeated.

The 700 code violatiions cited did not change anything last Summer and now that a fine has been paid , we will see if it is just a cost of doing business nuisance to the new owners, or if their behaviour will change this coming Summer.

At issue, is the quality of life for for those Montaulk citizens who do not patronize late night ...more
By Sag (54), Sag harbor on May 15, 12 9:24 AM
1 member liked this comment
I agree that the goal is to ensure quality of life. Businesses howver now have 100,000 reasons to be compliant. The "cost of doing business" has never cost anyone close to $100,000. I seriously doubt the new owners of the Surf Lodge want to go to court in the future. I am also sure that those in court thinking they can skate by are having serious second thoughts about pending violations and future violations.
By Yesouthh (21), water mill on May 15, 12 8:42 PM
That yuppie pallace should have been shut down each and every night code enforcement went in and observed gross overcrowding, fire code violations, intoxicated individuals, illegal parking etc. When they continuously and purpously gave the town the "bird", they should have felt the wrath of the town full force. Garbage thrown about every morning, some of it going into the lake and nobody gave a crap!!!!!!!!!!!!
By mtkfishman (76), montauk on May 16, 12 1:16 PM
Unfortunately, you have to go to court before you can close anyone down. We learned that 15 years ago with P Diddy who continued to disrupt his neighborhood with parties but could not be denied permits until the cases went through the court system.
By Yesouthh (21), water mill on May 16, 12 6:08 PM