September 19, 2007
On Thin Ice: Cop's Corporation Has Lucrative "No Bid" Town Contract
A company owned in part by suspended East Hampton Town Police Sergeant Rob Wood was awarded a "sweetheart deal" that could be worth hundreds of thousands of dollars for the firm but nothing for the town.
The East Hampton Town Board gave East End Ice, Inc. an exclusive five-year deal to run the newly renovated roller hockey rink in Amagansett on January 14, 2006. The corporation is co-owned by James P. LaGarenne, who signed off on the deal, and Wood, among others. LaGarenne is a retired New York City detective; Wood, a sergeant, is on unpaid suspension from the East Hampton Town Police Department following his arrest two weeks ago.
Wood and East Hampton Town Supervisor Bill McGintee served on the police force together for some 18 years, and McGintee has publicly downplayed the officer's troubles.
McGintee and Councilman Pete Hammerle are also on the East End Ice Board of Directors but LaGarenne stressed neither have received any compensation to date. The contract with the town calls for the appointment of one board member from the parks and recreation department.
"This is a sweetheart deal, pure and simple," said Brian Gilbride, a member of the Sag Harbor Village Board for 14 years and a Republican candidate for the East Hampton Town Board. "This couldn't happen anywhere but here."
It appeared those involved in the project attempted to distance Wood from it when quizzed. "His name doesn't appear on anything," LaGarenne said referring to town documents. Councilwoman Pat Mansir also pointed out LaGarenne alone signed the paperwork and appeared before the board. "We always dealt with Jim," said Councilwoman Deb Foster. Hammerle, when asked about the contract, also did not mention Wood initially. It is common knowledge LaGarenne and Wood are partners: jim@eastendice and rob@eastendice are the two "contacts" listed on the East End Ice website.
Wood appeared before the town board and along with Hammerle, gave a presentation about how the facility would operate – a full year before his firm was given the contract. The minutes of that town board meeting were not included in a packet The Independent requested under The Freedom of Information Act.
Gilbride said McGintee should have recused himself from voting on the matter. "I would disclose this guy is a friend of mine. McGintee and Hammerle were the shakers and movers for this deal and now they are on the Board of Directors. That has got to be a conflict."
Wood is an officer of the corporation, LaGarenne acknowledged, stressing he voluntarily does not take a salary, though he does get paid for performing duties for the East End Hockey League, which the pair also run. "There is no sweet deal," LaGarenne said. "We're the only ones who wanted this. It's more of an aggravation than anything."
"It was a natural fit," Hammerle said. "There really was no one else qualified," the councilman continued, acknowledging the town didn't consider anyone else to manage the facilities.
According to documents obtained by The Independent, East End Ice grossed $123,265 in 2006 – charging user fees to a facility that was renovated by the town for about $3 million. Over $78,000 of the money went towards salaries and benefits for LaGarenne and a handful of other employees.
LaGarenne said the revenue figures were swelled by an anonymous donor who contributed a lump sum "start-up" donation. He said he took a $36,000 salary.
In addition, the town agrees in the contract to contribute towards "operating costs" and "compensation" for the "manager" – amounts left blank in the contract. The Independent requested documentation of any additional monies paid to East End Ice, LaGarenne, and/or Wood by the town. The contract makes no provisions for the town to share proceeds beyond a clause to give the town "any surplus that remains" after the contract expires in five years.
Mansir and Foster both denied being aware of the terms of the deal, which freeze the town out of any revenue. "I honestly didn't know," Mansir said.
Nor were they aware that East End Ice was charging adult soccer leagues $100 an hour to use the facility, sometimes turning away community youth groups who wanted to use the facility. In fact, the soccer league has the facility to itself virtually every weekend during the winter.
According to Minor Huerta, who had been involved in the men's league, Union Deportiva Amistad Soccer League, some 20 teams with as many as 600 players paid as much as $50,000 to East End Ice last season. Amistad, in turn, sometimes charged admission to spectators, Huerto said.
LaGarenne said "that doesn't happen" because it is prohibited under the terms of the contract. According to the Fire Marshall's office, the facility fits 287 spectators as well as up to 50 players.
Marco Abad, the president of Amistad, said he personally "paid about $18,000 to Jim and Bob" last winter. Abad said Wood and LaGarenne told him, "We have to pay. Before we had trouble with the town."
Huerta, who coaches youngsters for the Town's Parks and Recreation department, also said he asked to run a youth soccer clinic at the rink on Saturday mornings and was told there wasn't any room. For the fiscal year 2006 East End Ice reported $37,572 in user fees.
"I have no reason not to trust these guys," Hammerle said.
The children's leagues pay, too. One letter writer to The Independent complained fees as much as $150 per player are charged. "Parents ask where the money goes, they say insurance . . . Can they account for all the cash . . .? Who approves all this?"
According to the financial records of the corporation, East End Ice spent $5579 to insure the premises in 2006. The town purchases "additional commercial public liability insurance."
"[Some] parents hate these guys," Hammerle said. "It goes back to the kids. These guys were coaches. There are parents who think their kids should be all-stars."
Sources said at least two different concession operations – prohibited under the terms of the contract – were being run during the season. At least one was run out of an office in the building used by East End Ice. Hockey equipment and supplies were sold, two sources said. One former player said a truck on the premises was "selling something out of the back." Mansir said, "I saw a vendor selling something" and that the town's Code Enforcement Department was asked to investigate.
There are also a handful of vending machines that are said to be heavily used. East End Ice keeps that money according to its contract; there was no breakdown for vending machine revenue in the 2006 financial report. The 2007 report is due in February.
LaGarenne said Plaza Sports kept a small satellite shop at the facility for convenience sake. He said his firm did not benefit from it. Peter Ferraro, owner of Plaza Sports, said, "We have sticks and tape and stuff there for the kids," but it is on a consignment basis. "[I've known] Jimmy and Rob a long time and they are dedicated." Ferraro said the pair do not profit from the goods sold there. Ferraro defended LaGarenne. "I've seen him work until three in the morning and then get up at eight to volunteer for the kids."
Wood, also, is generous with his time, LaGarenne said. "He's involved with a travel team for the kids. He's always at the rink making repairs. He does a lot on his own time."
Republican critics – the board members are all Democrats - argue the "No Bid" contract was illegal, that the town should have put out a Request For Proposal to see who else might be interested in running the facility. "That is a town board decision," said Laura Molinari, the East Hampton Town Attorney. "It can be viewed as a personal services contract, like hiring an outside attorney."
It is also traditional, like the beach concessions and Poxabogue golf shop, for the town to charge a fee for the license to operate. "Again that comes down to the judgment of the board," the attorney said about the decision not to charge a fee for the operation. Usually, the town requires individuals and firms who run concessions to bid for the job and to pay the town a piece of the action. "In terms of putting my eyes on the final contract, I didn't," Foster said. "It would seem to me we have to take a look at this."
"It should have gone out for an RFP," Gilbride said. "People who specialize in this type of thing would have had a chance to respond."
Foster said the board may have talked to a couple firms before deciding on East End Ice. Mansir said she didn't recall the board considering anyone else. "This was a Pete Hammerle project. He pushed hard for them. He wanted them," Mansir commented.
Larry Bertram, a longtime local hockey player, said LaGarenne bragged they would get the contract for the rink before it was even built, as early as 2004.
LaGarenne acknowledged as much. "We got the town through our hard work to cover this building," LaGarenne said. "They wanted us to run the rink."
"What happened here is these guys came up with the idea and the board went along with it without asking anyone else," Gilbride said.
East End Ice and East End Hockey are intermarried, meaning the hockey league's one adult and one children's league presumably pay money to East End Ice, and LaGarenne and Wood charge to referee the hockey games. Bertram, who played regularly in the adult league, estimated East End Hockey grossed "easily over $200,000" above and beyond refereeing and clean-up fees during his 10 years in the league.
According to filings by East End Ice. Inc with the town, the facility is booked constantly throughout the year. The adult hockey league in 2006 booked 232 hours, the adult soccer league 475 hours, the youth hockey league 341 hours. There were also 572 hours set aside for open skating.
LaGarenne said during many of those hours the rink was empty. He allocated 126 hours for senior citizens, he said, but none came.
East End Ice spent about $15,000 on equipment and for its office, including rugs, desks and computers. The corporation also made some improvements to the rink. The town pays all utilities. The Independent has asked the town to divulge how much it spent to maintain the facility.
Wood was arrested and subsequently suspended without pay after he allegedly tipped off two drug dealers that they were being observed by East Hampton Village Police. An undercover officer captured the exchange on tape, police said. Wood was charged with beating a teenager in his custody, Greg Monaco, in 1992. Wood denied it, but the town paid Monaco $40,000 to drop his civil suit. In a subsequent interview Wood maintained his innocence.
In 2003 a Montauk couple Wood arrested for playing music too loudly on their deck charged Wood used excessive force and allegedly broke the man's elbow. Sources said the town settled that case as well, for $80,000. But other sources said the "victim" was abusive, slammed the door on Wood, and spit at him prior to the arrest. "He may have screwed up as a cop but he did a lot to promote youth hockey in the town," Hammerle said of Wood.
In April 2005 Bertram, at the time an employee of The Independent, was playing in an adult hockey game at Buckskill when Wood's son came on the ice. When he was asked to leave Bertram said the elder Wood arrived on the scene and jumped him. Wood was suspended for that incident. Sources said police higher-ups urged the board to fire Wood, but McGintee and the board overruled them. Bertram subsequently moved out of town.
The contract between the town and East End Ice states, "the facility shall be made available for use by the general public during reasonable hours." The agreement appears airtight in favor of East End Ice. Even if the town were to identify a "failure to comply with the terms" the company would have two months to "make a good faith effort to rectify the problem." The town also agreed to pay maintenance costs.
The potential for profit is enormous, Gilbride pointed out. Renting the space at $100 per hour, charging league dues, officiating games for a fee, selling equipment and controlling the vending machines could yield a fortune – in cash, no less. "There is a certain degree of trust involved," Hammerle acknowledged.
Bertram said he believed any number of individuals would have come forward to bid for the chance to manage the facility, himself included. He scoffed at Molinari's suggestion a high level of expertise was needed. "I could run it in my sleep." He said. For the soccer league, he said, "you unlock the door and turn on the lights."
The town board resolution to hire East End Ice states, "Retaining them to operate the rink will be in the best interest of the town."
"Yeah," Gilbride commented wryly. "Except the town gets zero. They gave these guys a public facility."