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Vendor’s lawyer downplays city audit highly critical of marina operations

A city audit highly critical of Erie Basin Marina operations amounts to nothing more than a landlord-tenant dispute, according to a lawyer for the vendor.

The vendor also intends to continue operating the marina for another two years.

“This is a dispute between landlord and tenant,” said Mark S. Carney, lawyer for Brand-On Services, which owes the city $343,245, according to the audit by the office of City Comptroller Mark J.F. Schroeder. “There is no criminality here whatsoever.”

The comments mark the first public response to the audit from Brand-On Services, which has had a contract with the city to operate the marina, including the Hatch restaurant, since 2001.

Schroeder and Mayor Byron W. Brown last week referred the audit’s findings to Erie County District Attorney Frank A. Sedita III, State Attorney General Eric T. Schneiderman and U.S. Attorney William J. Hochul Jr., and suggested that “there may have been possible criminal wrongdoing committed by Brand-On Services.”

When the audit was released Sept. 12, the city said that it would seek a new operator for the marina in time for the 2014 season.

Brand-On Services, however, will seek a contract extension so it can operate the marina for two more years, Carney said. “I believe that my clients have acted in good faith and have helped to contribute to the marina’s success,” he said, adding that the next two years are expected to be lucrative for the marina, as the waterfront becomes more of a destination.

The city also is spending $1.8 million to improve and expand the Hatch, which sells food, beverages and ice cream.

Brand-On Services fully complied with its lease and cooperated with the audit, Carney said.

He declined to comment on the figures cited in the audit, which cover five years of operations, and said a full response would be provided to the Common Council and the public after the company’s accountants have had a chance to analyze it.

Carney and Michael J. Wolasz, whose family runs the company, attended a meeting of the Council’s Finance Committee on Tuesday, prepared to make some preliminary remarks to lawmakers, because the audit was on the agenda.

But the committee’s chairman, South Council Member Christopher P. Scanlon, quickly tabled the item for two weeks so the lawmakers and the vendor could better prepare themselves to discuss it.

Wolasz was accompanied by some family members and marina users who were there in a show of support.

In their letter to prosecutors, Schroeder and the mayor question what happened to 20,000 gallons of gasoline, which represents the difference between the number of gallons supplied to the company by its fuel vendor and the number of gallons that Brand-On Services told the city that it had sold.

The letter also notes that the company underreported sales of food and other items to the city by $164,204, according to the audit.

Schroeder questions whether the company paid all appropriate taxes on the gasoline and the underreported sales of food and other items, and stands by the audit’s findings, he said Tuesday.

Carney rejected the idea that there is any “missing fuel.”