BELMAR, NJ — Belmar’s recent settlement of a lawsuit with the developer of a stalled riverfront project has prompted new legal action by the bar owners who are suing Belmar for preventing them from opening an outdoor establishment on that site.
Brothers Timothy and Matthew Harmon are asking the court to invalidate the borough’s recent settlement with Loko Co., LLC, that allows for the second “permanent” phase of the original redevelopment project at 710 River Avenue to proceed — specifically the construction of two mixed-use buildings of 10 residential condominiums and first-floor commercial space, which would include a restaurant and bar.
The settlement does not include the first phase of the original project approved in 2014, which called for the construction of a temporary outdoor bar and café that would have been operated by the Harmons from 2015 to 2017. Those plans did not materialize after the Belmar Council rejected the Harmons’ request to have their liquor license transferred from their now-closed 507 Main restaurant across the street to Salt, the proposed tiki-style bar built overlooking the Shark River that still sits empty.
As a result, Loko, owned by developer Gregory Kapalko of Belmar, filed suit against the borough in November 2016, claiming it violated the redevelopment agreement by denying the liquor license transfer and engaging in a host of actions that prevented the project to commence — legal action that was resolved with the breach-of-contract settlement finalized earlier this month.
However, the Harmons are seeking to have that latest agreement between the borough and its landlord overturned, according to their four-count complaint filed on August 24 in New Jersey Superior Court, Monmouth County, against the Borough of Belmar, Belmar Council, Belmar Mayor Matthew Doherty, Belmar Business Administrator Colleen Connolly and Loko Co.
According to the complaint, they claim that the new redevelopment agreement does not permit the use of their liquor license as stipulated in its lease with Loko at 710 River Avenue and “destroys its right” to operate an outdoor café and bar on the site.
They are asking the court to deem the settlement agreement between the borough and Loko invalid and to direct the borough to transfer the liquor license to Salt and to permit them to operate the outdoor bar for a three-year period. The Harmons also are seeking unspecified punitive and compensatory damages related to substantial construction and approval costs associated with Salt, lost business and loss of goodwill, according to the lawsuit.
In response to the latest legal action, Mayor Doherty said that he finds it odd that the Harmons, as tenants, are trying to undo a settlement by a business partner, Greg Kapalko,
“They’re suing the town because the town settled a lawsuit,” he said. “It is disappointing because we’re trying to settle a lawsuit, and with the Harmons trying to interfere, it’s only going to cost the taxpayers in Belmar more money.”
Roger McLaughlin of Wall, the Harmons’ attorney, issued this response to Mayor Doherty’s comments. “The mayor, as usual, ignores the plain facts. Belmar has prevented the Harmons from using the property they leased from Loko — intentionally and repeatedly.
In fact, he said, the proposed “settlement” is nothing more than another effort by Doherty to cause damage to Tim and Matt Harmon. “It actually proves the points made by the Harmons in their federal civil action,” McLaughlin said, referring to the separate $10 million federal lawsuit filed in April that seeks damages resulting from what they claim has been the borough’s deliberate attempt to prevent them from opening Salt.
“The mayor shuts them out of an outdoor café/bar, while at the same time promoting the outdoor facilities of others, like the Anchor Tavern and 10th Avenue Burrito,” the attorney said. “We don’t think anyone will be fooled by his comments that the Harmons are trying to ‘interfere’ with a settlement. They are the ones targeted by the ‘settlement,’ which is obvious to everyone we’ve spoken with. Our clients have no intention of letting him get away with it.”
With the settlement agreement signed, Loko is expected to file an application for site plan approvals with the planning board within 90 days. It is unclear whether the Harmons legal action will have an impact on that process.
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