Restore Dyckman Marina

Hearing Loss

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“Why should we believe [Manhattan River Group]?  We can go into the drug sales by a manager, we can go into the fact that they felt like they could do valet parking all over upper Manhattan and not care where they left the cars, we can go into the fact that they were having concerts or whatever events that they had already told the city they weren’t going to have.  They lied every chance they got.

Now all of a sudden because we’ve shut them, and their investment is going out the window, or their golden goose, whatever you want to call it, now they’re going to find God. It gets to the point where, to me, based on when I’m here, I don’t care what they promise me, I don’t think I’ll ever believe them, the guys that are involved in this thing.  “

– NY State Liquor Authority Chair Vincent Bradley, La Marina Disciplinary Hearing April 10 2019

 
During the last month, there were two important hearings concerning the bankrupt, landlord-suing La Marina.  Let’s break them down and see if they give any indication of what might happen next.
 
 
BANKRUPTCY STATUS CONFERENCE 4/4/19
 
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Shuttered, bankrupt, and not open for the start of the season.  (Photo 4/16/19)

On April 4th, 2019 attorneys appeared in US Bankruptcy Court for the Southern District of New York to give the presiding judge a status update on the Chapter 11 filing by the concession operators.
 
One attorney (Mr. Brian Hufnagel) represented Manhattan River Group, the holder of the Restaurant and Marina concessions at Dyckman Boat Marina, operating as “La Marina”.  Also present was an attorney (Mr. Zachary Kass) from the New York City Corporation Counsel’s office representing the Parks Department and the City overall.  
 
A Chapter 11 filing (a “reorganization” filing) means the business intends to restructure their debts and emerge from bankruptcy to operate again, if possible.  They have to work out deals with their creditors and come up with a business plan that the court will approve.   In the meantime, they have to meet from time to time with the judge to give him or her an update on the status.  
 
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This area was supposed to be “holly trees and native grasses”.  Photo taken 4/16/19

 
Obviously MRG is not going to have a viable plan to restructure their debts unless they can:
 
1) Hold onto one or both of their concession agreements
2) Get a liquor license (the current liquor license was suspended on Dec 6th, 2018)
 
And so, stalling for time, the first status conference in February contained little of note other than that they claimed to be close to agreements with the City and SLA:
We’ve identified a new operating partner who has a — it’s a well-known restaurant chain who’s operated in the city for thirty years. I really can’t disclose a name until things are final, but it’s one we believe will be hopefully more acceptable to the City and to the community, and will allow the place to reopen with a new type of operation and a more acceptable — but he’s on board. We have to nail down the final details, as we hopefully reach an agreement with the City.

We are also close to a potential resolution with the State Liquor Authority that will allow reopening with a liquor license as well. We’ve had discussions with them. They’re very far along. I can’t say we have a deal until everything kind of falls in place, but that’s been taking place as well.
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Area behind the Quonset hut.   4/16/19

In the April status conference, the attorney for MRG claimed that a proposal was sent to the Parks Dept in March, a proposal that Parks refuses to discuss with Inwood residents:
 

There is nothing final yet, unfortunately, but they have moved along. We submitted, probably about a month ago, a proposal — settlement proposal to the City. The debtor and the Parks Department met in person to — let me back up.  Before that, we — before we submitted the proposal, we met with the Manhattan Borough President as well as some members of the local community that are up in that neighborhood to try to fill them in on what our thoughts were and to get their input from it.

The MRG attorney also claimed that the Manhattan Borough President supported their proposal.  (One wonders what Gale Brewer thinks of such a representation given her past concerns about operations):

The community response is mixed. Some people like the place, some people don’t like the place and would like to see something different there. The Manhattan Borough President was pretty much on our side in terms of our proposal for how to reopen the place going forward. 

 

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Photo taken on the first day of the boating season, 4/16/19.  Docks not installed.

It also appears that there was a second proposal sent to Parks – also not shared with the public:

So after that, we submitted a proposal to the Parks Department and met with them to discuss it. And we then submitted a revised proposal after the meeting that took into account some of their comments. We did meet with them. And at this point, we’re waiting, really, for their feedback, to see whether we’ll have a settlement and have something put in place.

One can surmise from the following though that these proposals likely refer to Brother Jimmy’s:

Without going into too many specifics, in general, we’re going to be bringing — we’re hoping to bring in a new investor who’s — slash — kind of co-operator with us for the place, so it’ll be reopened with a little different food, probably better price points for the area, we’re hoping, as well. And the investor will put some money into the case that will allow a plan to come together as well.

Overall the MRG attorney painted a rather vague yet rosy picture:

So it could be — again, we’re — I think — I can’t really speak for the City, because we don’t really know, and they don’t know either, but we think in terms of the concept we’re pretty close. And then there’s some monetary elements that kind of go along with it. And those are still being worked out — worked out — as well. So this case could be done very quickly and it could still go further. But we’re going to know one way or another, I think, before we come back here next time, whether we’re going to have an agreement with the City.   I think we’re — we could have still some back-and-forth, but I think it’s moving along and we should know fairly soon.

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The “greenhouse” structure erected over the north patio as the new “indoor” concert area, never approved legally by DOB, SBS or any other agency.  Photo 4/16/19

At the prior status conference the city attorney called the marina concession “sort of a snack bar.”  This month he was paying more attention:

It is my understanding that there have been some discussions with the businesspeople. I know there are internal discussions at Parks to consider the revised proposal. Debtor’s particular status conferences always tend to be a little bit more rosy than everybody else in the room, and I must say that what I’ve heard from the City isn’t quite that rosy about where things stand.

Still, he confirmed meetings and discussions all somehow “moving forward” but being hidden from the public:

But it’s my understanding that they are moving forward, both sides, in good faith, and that there has been some progress on some open issues, and that Parks is seriously considering what to do next.

A pause here to reiterate that Parks is meeting with a bankrupt concessionaire who owes them rent and members of the public their deposits, who is suing them for enforcing their agreement, who is facing four pages of SLA charges including drug sales and has a suspended liquor license, taking revised proposals from them, and now “seriously considering” what to do next?  Anywhere else, even at this very concession site a decade ago, there would be nothing to consider but immediate cancellation of the concession agreements.  This is insane.

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Nowhere to dock on the first required day of the marina season, April 16th 2019

To return to the status conference, the City attorney still seemed to not quite understand how the marina actually worked:

The main operation is at the restaurant, of course. There are some conversations about what to be — what use the marina should be made of.  I understand there are other issues about the marina in terms of some federal involvement, as there usually is with waterways and — things of that nature. So I understand that’s among the various components that’ll have to go into this that’ll enter into it as well.

The marina is not up for conversation – it’s required to be a marina, for the next 28 years, per the terms of its funding that paid for the docks, restrooms, electric hookups, etc.  It’s not up for debate.  The attorney seems to be confused that the “federal involvement” is the US Army Corps of Engineers, the agency that does deal with waterways and navigation, but in this case it’s not them.  It’s the Boating Infrastructure Grant program of US Fish and Wildlife.

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Bar in beach area that was supposed to be a cafe, not a concert venue, 4/16/19

The next status conference will now be on May 14th, well into the boating season that opened on April 16th and the restaurant season that opened on May 1, per the concession agreement terms.  There is some cause for concern that the timing will cause the city or the judge to rush something that should not be rushed, no doubt a strategy of MRG:

MR. KASS: — I know there is considerable concern, actually, on both sides that the summer season  — is approaching —
THE COURT: Right.
MR. KASS: — and that having the place unavailable simply because parties aren’t in synch, wouldn’t serve the community.
THE COURT: Right. Well, if there’s anything I can do on that front, just let me know.
MR. KASS: Sure.
THE COURT: And if you decide that there’s some artistic license that you want to take in terms of anything I said today to get any of your clients to move at the City, feel free to take such license. Having represented government clients in the past, sometimes the wheels of justice grind exceedingly slowly, so but that’s fine.

What wouldn’t serve the community is allowing MRG to emerge from bankruptcy still holding the concession agreements which they have violated so many times and clearly are not qualified to hold.  Judge Sean H. Lane turns out to be an Inwood native (!!!) so perhaps this will all be sorted out properly in the end, no matter what the timing.
 
 
SLA HEARING 4/10/19
 
mrg sla

MRG attorney presents plea at SLA hearing.  Jimmy Goldman and Josh Rosen at left.

 
The second major hearing was the disciplinary hearing at the State Liquor Authority on April 10 (video: skip to 3h42m).  The purpose was for the Board to hear a Conditional No Contest (CNC) plea from Manhattan River Group.  This is an option that license holders have when charged with infractions to, instead of fighting the charges, instead offer the Board a “No Contest” plea, conditional upon an offer of a fine, as a way to address and dismiss the charges. 
 
In this case, Manhattan River Group (again, this is the business that holds the Restaurant and Marina concessions, operating as “La Marina”) made an offer of $125,000 in exchange for pleading Conditional No Contest to THREE PAGES of violations dating back to July of 2017.  The attorney also made an attempt to tie the offer to a promise of a change in operations.
 

The licensee understands that it has had its problems in the last year…. but what I want to emphasize and why I have Brother Jimmy’s with me is they will make part of the Conditional No Contest (CNC) that they will change the operation, they will not be open past midnight any night of the week, they will not have ticketed events, they will not have any of these loud parties that they have been accused of, and what you will have is a very kid-friendly Brother Jimmy’s, a place that is known to the liquor authority, is a good licensee, has relatively no problems (a charge here and there) but nothing of major concern to the SLA.  So part and parcel of the CNC is that will we assure you what was will not continue, and that is critical I believe.

Before we go further, let’s remember that the concession license itself limits the hours to 11 pm most nights and 12:30 am only on Thurs, Fri and Sat.  It also prohibited concerts while the city charter makes outdoor music (at any volume) past 10 pm illegal in a park.  The fact that MRG was the very party that ignored those rules for seven years rather undermines any promise to now all of sudden abide by them.

The Board answered as follows:  “Why should we believe them”?  The MRG attorney then tried to again tie in the CNC to the promise of this new operation, which could be closed down if there were any further violations.  This led to a discussion about how MRG had apparently negotiated some sort of “global settlement” behind closed doors with the former SLA General Counsel Christopher Raino.  This special treatment seems highly unorthodox — but might explain why La Marina had never come to administrative trial for charges dating back a year and a half.  (That delay also caused the SLA to automatically renew the license because it was awaiting a hearing even though CB12 asked them not to.)

 

bikinipalooza

The July 2, 2017 Bikini Palooza event that resulted in Disorderly Premises and Over Capacity charges.

The MRG attorney also attempted to bring Fernando Mateo into the offer, namely that he had been removed from the partnership.  While this may explain why Fernando Mateo recently gave interviews on Hot97 and then on Power 105 blaming everyone else, the Board wasn’t having it:

This idea that one person, and I’m going to put all the activities that occurred here, which were obviously substantial, on the majority being caused by that  one person just isn’t accurate in my mind.. They were all equal partners in this thing, they all had equal responsibility”.

And then Chairman Bradley went back to Commissioner Ford’s question, why believe MRG now when the same partners would still be holding the liquor license?

Why should we believe your client?  We can go into the drug sales by a manager, we can go into the fact that they felt like they could do valet parking all over upper Manhattan and not care where they left the cars, we can go into the fact that they were having concerts or whatever events that they had already told the city they weren’t going to have.  They lied every chance they got. Now all of a sudden because we’ve shut them, and their investment is going out the window, or their golden goose, whatever you want to call it, now they’re going to find God. It gets to the point where, to me, based on when I’m here, I don’t care what they promise me, I don’t think I’ll ever believe them, the guys that are involved in this thing.  

At this point the MRG attorney fell back on the (incorrect) claim that somehow the concession holders here did something special and that they had a clean record.

Mr Chairman, there’s been a tremendous investment put in this place.  They took a rotted old pier and made it into a viable entity.  For the seven or eight years, you had no problem with them – in the past year, all sort of things have occurred”

Well, no, not quite.  Yes there was investment, but don’t forget some of it came from the city, some of it came from the federal government, and all of it was what any party that won the RFP would have done.  The concession agreements literally required those investments as a condition of holding the concession.   As for the claim of “no problems” since opening, all you have to do is read the years of headlines to understand that something was very wrong with the operation.

Again, the SLA Chair was not accepting any of this argument, pointing out that:

We had no problem with them based on the history in the records in our agency but it’s quite obvious to me now that the majority of that neighborhood and the majority of that area of Manhattan did have a problem.  It appears to me that the city administration for whatever reason was either turning a blind eye or not listening to that problem.

What followed was then a long discussion about the valet parking issues at La Marina.  The MRG attorney tried various arguments to minimize this massively illegal large-scale disruption that occurred every summer weekend since 2012:

  • “The parking issue, as you put it, was never an issue until it became one all of sudden.”

  • “The Parks department was permitting those cars to be parked inside the park.  When that was taken away, well there were problems.”
  • “I understand what you are saying about this complete disregard for what should have been going on but it’s NOT TRUE.  It’s just NOT TRUE. And it hasn’t been true.”
  • There was an agreement and a contract of a sorts with the Parks Dept which allowed for this valet parking, so these claims about valet parking all up and down the streets and avenues is not correct.  

 

no valet2012

Parks told MRG that their valet parking was illegal back in 2012.

 

The problem for this particular hole he was digging was that the valet parking was always an issue, Parks never allowed anything close to what went on every weekend, the valet was supposed to be confined to the Parks lot only (but clearly wasn’t), plus Parks has no authority without a separate concession to offer anything anyway and the disregard was total and complete, every summer, every year, causing huge traffic problems

As for that contract?  It was with the valet company, not the Parks Dept, and it was as worthless as a rusted-out AMC Gremlin — because it was not legal to park cars on public land for which there was no concession license.

Fortunately the SLA Chair saw through the smoke (maybe even the actual smoke) and  understood the underlying issue:

“You’re missing my point. It’s not about the valet parking. It’s about the way that they felt like they could operate, that they didn’t have to operate within the bounds of what they agreed they would do.

The MRG lawyer continued to try and talk about the proposed future of the site rather than address the charges from past operation.  (Note how none of this description resembles the former La Marina — someone might want to tell the Save La Marina folks.)

I’m not going to argue with you about what you perceive to be their problem.  They had a problem. They’re trying to solve their problem by completely changing the method of operation to a kid-friendly place that will close no later than 11 or 12 o’clock at night, will have no ticketed events, will have no speakers blaring in the middle of the night, will have none of these things.  We’re going to have a concept that has been a proven winner in the city of New York for 34 years as well as other states?

…Our plan is to convert the sand area to a kid-friendly area with bocce court, shuffleboard court, and other things.  we don’t work with outside promoters, idea is to do what we do for 30 years. Kids eat free. Beach area Parks has asked us to make accessible to the community, we’ve spoken to the community, talks about Brooklyn Crab and corn toss.  I don’t do outside shows, I don’t do HipHop, I don’t do Reggaton, not what we do.

 

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Had the concession been re-assigned in October this would be open by now.  (4/16/19)

 

To all of this the SLA’s general response was “Why not lease it to Brother Jimmy’s then?”  The MRG attorney responded, incorrectly, with:

That’s the problem, in a nutshell.   Because the Parks department has a licensing agreement with the current licensee and it’s not as if ok Brother Jimmy’s  here’s your license. It doesn’t work that way in the City of New York.  

The above is simply not true.  There is a process called “assignment” which is defined in the concession agreements (just go to Section 14).   The original operator, in this case MRG, would find another party, such as Brother Jimmy’s, willing to step into their shoes and assume the terms and conditions (and current year) of the lease, exactly as written.  The Parks Commissioner would have to approve such a process, but not the community board or any other party, which is logical since the new party is assuming all of the responsibilities and obligations and restrictions that were already approved.  This is exactly what happened with New Leaf Cafe in 2015 and it could happen at Dyckman Marina too.  So yes, in fact, it does work that way, exactly, in the City of New York.

 

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An unapproved restroom trailer parked for years in the marina area.  4/16/19

There was one more outrageous claim made by the MRG attorney at this hearing:

They’ve made a mistake, they made a big mistake, they’ve paid for it in many ways in that they’ve been closed for five months, there are  number of weddings that didn’t go on in the winter because of this, they’re paying a severe price for what they did.

Here he is trying to create sympathy that being closed from December to March has been a “severe price” to pay for the operators.  He mentioned this two other times during the hearing as well.  But let’s remember,

1) December to March has a name, it’s called “winter“.  Any review of past revenue reports shows very little revenue during these months ($30k to $100k) compared to summer months ($1.8M to $2M), as one would expect for a mostly outdoor operation.  Not exactly a “severe price”.

2) La Marina is a summertime concession, literally.  The concession license agreement only allows the restaurant to operate from May to October.  That’s it, period.  There is no piece of paper anywhere that allows for any legal operation of the restaurant premises between October and May.  The fact that MRG has used public property as a private event venue with no concession agreement to do so for YEARS does not make it legal.  How can being denied activity you were not legally entitled to host be a burden?

3) MRG declared bankruptcy in December, stiffing several people out of their wedding deposits.  And wedding parties could have brought in caterers with a special event permit for serving alcohol at a wedding.  It was MRG’s decision to close, so the “severe price” was paid by the cheated couples, not by MRG.

 

 

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“Concerts are strictly prohibited” say the concession agreements.  Yet this stage for performers has been here since 2012.   Photo taken 4/16/19.

Fortunately the SLA chair did not buy any of these arguments — at the end of the hearing when the vote was taken by the Board, the Chair said:

I just can’t in my conscience do this.  Just like the community board said this to me is not about Brother Jimmy’s.”  Refers to letters where Parks told valet to stop and it continued. Drug dealer who was selling to an undercover.  “At one point there was a group of people who were their customers at an event who were poisoned by some kind of powder.  

There were just too many instances where they either through political influence or just complete disregard for the law decided that they were going to do what they wanted, and I don’t believe that that would not happen again with these owners.

 
The Board voted 3-0 to counter the MRG offer of paying a penalty and getting their license back with “bond and cancel“, i.e. cancel the license but with no restrictions on applying for another new license, and seize the bond that was filed with the license application.  MRG can now decide whether to accept this offer to turn in their license and pay the bond, or fight it at a trial before an Administrative Law Judge.  The penalty at administrative trial could include fines as well as revocation, preventing anyone from MRG from holding a liquor license anywhere for two years, or denying a license at the site for two years. 
 
Regardless of whether there is now a disciplinary trial or not, or the outcome of that trial, what is certain is that there will be no liquor license for months at the Dyckman Marina site so long as the concession is held by Manhattan River Group.
 
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It’s right there in the name, yet La Marina has never run a full marina as legally required and now sits shuttered.  (Photo 4/16/19)

 
 
SUMMARY
 
What is clear from these two hearings is:
 
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The “no standing at night” signs that were installed by Manhattan DOT at the (improper) request of La Marina remain in place, for no reason at all.  (4/16/19)

Since these hearings, there have also been two additional filings in the bankruptcy case.  The first filing replaced the original attorney, Hufnagel, who was a lawyer at one of the MRG partner’s firm.  The new attorney is Robert Rattet of the outside firm Rattet PLLC.
 
Likely because of the SLA’s refusal of their settlement offer, MRG also filed with the court for an emergency hearing for an extension until July 18th, 2019 to submit their restructuring plan.   Note the following text from the filing, which contradicts the “severe penalty” claim above of not operating during the winter.  It also talks about an “assumption” of the lease, for which a letter was later filed on May 2, 2019. This means MRG is intending to stay in possession of their Parks concession licenses if they emerge from bankruptcy, although they seem to hint at possibly surrendering the Marina license to Parks if they can keep half of the Quonset Hut (a marina concession property).
 
First, the Debtor is currently not operating (traditionally the Debtor’s “off season”) and needs to immediately obtain debtor-in-possession financing to become current with post-petition rent (approximately $31,975) and pay for other administrative expenses pending its negotiation of a plan of reorganization with its hopeful plan funder, with whom it has just commenced negotiations.
 
The parties are already contemplating an assumption of the License as part of the Plan. However, DIP financing is needed now to cure the post-petition arrears to the City and provide some additional working capital to get the Debtor through the plan negotiation and confirmation process shortly thereafter.
example of lamarinanyc hashtag 2019

Although La Marina has not hosted concerts since July 2018 and is currently shuttered, DJ promotions as far away as Miami continue to use the #lamarinanyc hashtag to attract traffic to social media nightlife posts.  This instagram post is from April 29th, 2019.

 

Finally, on May 1st, 2019 the SLA cancelled the liquor license after receiving a  letter indicating that Manhattan River Group was accepting the Board offer of cancellation and bond.  So the liquor license has now been surrendered, so to speak, and any new operator at the site (such as Brother Jimmy’s) will have to go through the process of applying for a new liquor license under a different name.

And so without a liquor license, and without emerging from bankruptcy court, why hasn’t Parks terminated or re-assigned these concessions?  Why is the Parks Dept keeping the facility dark in these desperate attempts to retain Manhattan River Group?    What secrets are creating such leverage?  Restore Dyckman Marina.  Now.

 
 
 

2 thoughts on “Hearing Loss

  1. EXCELLENT. THANK YOU.

    Like

  2. Just had lunch Saturday on Dyckman & Payson; had no idea the restaurant and marina were not open…

    Like

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