A process server representing the owners of a proposed bar and restaurant in Gravesend that was denied a liquor license interrupted Community Board 15’s September meeting last night, serving papers for a $180 million lawsuit that claims the Board conspired to defame the owners, and discriminated against them based on their Russian roots.
Pleasure Island, also known as Galaxy, located at 816 Avenue U, was denied a liquor license by the State Liquor Authority in 2011 – and again by the Community Board earlier this year – after locals learned of plans to reactivate a bar that some said was a hotbed for underage drinking and rowdiness. The lawsuit claims, though, that those neighbors were misled by numerous community leaders in a smear campaign orchestrated by Community Board 15 Chairperson Theresa Scavo, possibly for discriminatory reasons.
“She’s saying these people aren’t Jewish enough,” Susan Bernstein, the plaintiffs’ attorney, told Sheepshead Bites. “She wants what she wants in that neighborhood. A Community Board isn’t a despotic agency that can decide what business can open and close. They spread intentional lies about the two individuals involved.”
According to the documents, the plaintiffs – listed as Pleasure Island (d/b/a Galaxy Island), and owners Marat Zagorin and Mark Shteynshlyuger – purchased the location of a shuttered sushi spot that previously operated as a bar named Pleasure, and were renovating it between January 2011 and May 2011. Zagorin is the majority shareholder, with 90 percent interest, and Shteynshlyuger, a former shareholder of the previous bar, came aboard with 10 percent interest.
The duo claim to have spent $425,000 during construction and $190,000 in additional expenses – all of which is lost due to the opposition, along with $4.5 million in gross revenues.
Although they say their intent to build a restaurant and bar at the spot was clear from the beginning, they claim in the documents that the defendants did not raise any objections until work was completed. They point out that Scavo lives two blocks from the location and visited the work site.
It wasn’t until after the money was spent, the papers say, that Scavo, Assemblyman Steven Cymbrowitz, and State Senator Marty Golden set out on a malicious campaign to smear the owners and prevent them from obtaining a liquor license.
“These are two guys who made huge investments, as our complaint states. Scavo saw the work, and nobody said stop work because we’re going to be against this. They waited until they finished,” said Bernstein.
The local leaders made claims regarding violations for sales of liquor to minors, noise issues, parking violations and general disturbances – allegations the bar owners say are false and say there’s no proof of.
Zagorin and Shteynshlyuger also said that Scavo’s claims that Community Board 15 had received “300 phone calls in opposition to the granting of this license” has not been proven, and FOIL requests they sent to the Board produced no documentation.
The complaint goes on to target Scavo specifically for allegedly discriminating against the business owners for opening a Russian non-Kosher restaurant. They say Scavo “is emphatic in her position that she does not want a Russian non-Kosher restaurant opening in that community,” and, “personally does not want a Russian non-Kosher restaurant near her residence.”
“They can’t say you can’t open a business here because you don’t meet our standards or religiousity. And that’s what they did. That’s what their objections are based on. Plus nonsense,” Bernstein said. She adds that the plaintiffs have an audio recording of Scavo to back up their claims.
They also allege Scavo purposely spread false information to the community, saying the business would be an “adult establishment, strip club or a topless dance club.” Bernstein notes that this was aided by the establishment’s proposed name, Pleasure Island, which carries an implication that the owners, two Russian nationals, weren’t aware of.
“They didn’t realize when they named it that it would have ambiguous meanings,” Bernstein said. “The Community Board seized on that name and then spread those rumors that it would be a gentleman’s club or a strip joint.”
The lawsuit names the Board, each of the Board’s executive members, the State Liquor Authority and its commissioners, Assemblyman Cymbrowitz, Senator Golden, and the City of New York as defendants. The lawsuit demands a minimum of $10 million in compensatory damages and $10 million in punitive damages for each of its nine complaints. The complaints are as follows:
- Violations of the First Amendment, Equal Protection and Due Process Rights
- Conspiracy to Deprive Plaintiffs of Constitutional Rights
- Neglect to Prevent Conspiracy
- National Origin Discrimination (state)
- Religious Discrimination (state)
- National Origin Discrimination (city)
- Religious Discrimination (city)
- Tortious Interference with Contract
Even if the money doesn’t come through, Bernstein said that’s not necessarily the end goal.
“What we’re hoping is to have the State Liquor Authority reverse their denial on the grounds that the objections are illegal,” she said.
Sheepshead Bites will reach out to the defendants for a response.