VENTNOR The Board of Commissioners Thursday, July 22 agreed to settle a lawsuit brought by the organizers of a Latino festival that never happened. According to the resolution, the breach of contract lawsuit brought by Sandstock, Inc. for events that took place during Mayor Michael Bagnell's administration was settled for $30,000.
Mayor Beth Holtzman said Sandstock sued for a very large sum, reportedly more than $400,000, but city solicitor Tim Maguire was able to reduce the city's liability to $30,000. Atlantic City, which was also sued, would pay twice as much to settle its portion of the case, she said.
"We tried to do the best we could with the facts presented to us," Maguire said.
The case was originally filed in the Camden County vicinage April 24, 2018 and was later moved to Atlantic County Superior Court. It was scheduled for trial, Maguire said, but the trial was delayed due to the coronavirus, and eventually it was settled out of court.
According to allegations brought by Sandstock attorney Conrad J. Benedetto of Voorhees, the for-profit company planned to hold a Latin freestyle festival being promoted as the largest Latin style festival on the East Coast on the beach in Atlantic City, attracting up to 14,000 attendees over the multi-day festival. A portion of the proceeds from the event would support the non-profit American Red Cross Sandy Relief Fund and the NJ Latino Leadership Alliance.
Atlantic City would charge $5,000 for the use of the beach, but the city subsequently moved it to the Bader Field site and upped the charge to $100,000 for the two-day event, although other organizations using the site were not asked for such a large fee, the suit alleged.
There was no rationale for Sandstock being charged $50,000 per day other than a discriminatory animus on behalf of AC given that Sandstock was a Latin music festival. Based on information and belief, statements were made within the AC government that they did not want a Latin festival in AC because of the Hispanic participants," the suit alleged.
Sandstock sought an alternate site in nearby Ventnor and Bagnell's management specialist, Tom Quirk, said the Ventnor beach would also not be available. He suggested negotiating with the owner of a vacant property on Wellington Avenue, with a $1,000 per day payment to the city for the use of a paper street that abuts the property. According to the lawsuit, Quirk requested a $5,000 donation quietly be made to the Ventnor Home and School Association and promised the city would do whatever was necessary to ensure the event took place.
Sandstock came to an agreement with the property owner to lease the site for the festival, which would be held Sept. 20-23, 2013, for $10,000. Quirk indicated Sandstock would have to file an application at City Hall to hold the event, but that it was just a formality that he would take care of it, the lawsuit stated.
City ordinances at the time required the Recreation Board review and approve special events applications, and again Quirk assured Sandstock the permit would be issued, and Sandstock started booking entertainment and promoting the event to the media, the complaint stated.
Later, Quirk advised event organizers they would have to meet with the Recreation Board. Then-Solicitor Amy Weintrob requested copies of Sandstock's agreements with the non-profits, but Sandstock said the non-profits would not consent to their release. She also advised them to appear before the Recreation Board on Sept. 10, 2013 to obtain a permit.
During the hearing, the Recreation Board denied approving the permit because the property was in poor condition and not suitable for a large festival and the company was not a non-profit organization. The event was cancelled 10 days before it was scheduled to take place.
The Board of Commissioners in September 2013 hired attorney Frank Corrado to investigate the events surrounding the cancellation of Sandstock. In his report filed in April 2014, Corrado, who was paid $13,783, cited a substantial failure of proper governance and of proper governmental process, and said that the city failed to do it's homework by not properly investigating Sandstock or the city's ability to put on such a large festival, which would require in-depth review to ensure public safety.
Corrado said Quirk mishandled the festival, that city ordinances were vague on organizing large events and that he and the mayor did not possess an adequate understanding of how government should work.
In June 2014, the city completely revised its special events ordinance, and when a new slate of commissioners took office in 2016, it was updated again.
In the lawsuit, Sandstock alleged that Atlantic City discriminated against the ethic festival and breached the contract when it asked for more money to use Bader Field. It also alleged that Ventnor breached its verbal contract and that Sandstock incurred more than $100,000 in monetary damages.
The flap prompted residents to petition the commissioners to eliminate the management specialist position. Upon taking office in May 2016, the commissioners told Quirk his services were no longer needed due to hiring a deputy administrator who would help the newly elected commissioners transition to governance. The Civil Service position was eliminated on July 21, 2016, along with its $50,700 salary.
In defending the case, Maguire said the city relied on the fact that the Recreation Board denied Sandstock's application based on safety concerns.
Atlantic City Council passed a resolution approving the settlement at its July 21 meeting, but it is subject to the approval of Gov. Phil Murphy due to state oversight of Atlantic City.
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