The father-and-daughter team that runs a popular lobster roll shack in Rye Harbor is suing the state — as well as the harbor’s longtime director — alleging that they were subjected to years of mistreatment including the imposition of an illegal “concessions fee” on their sales.
The lawsuit by Rye Harbor Lobster Pound is the latest foray in the ongoing public dispute between the restaurant and the Pease Development Authority (or PDA) and Geno Marconi, who was placed on leave as the director of the state’s ports last April.
According to the filing, the seasonal restaurant’s owners, Nathan Hanscom and Sylvia Cheever, allege that the PDA’s decision in 2023 to collect an “unauthorized and illegal tax” of 10% on the restaurant’s gross sales — labeled as a “concessions fee” — cost the restaurant more than $116,000 during the past two summers.
The restaurant alleges the fees are illegally and unequally applied. They also contend that the leases that Pease requires all businesses that operate out of the harbor to enter into lack any grounding in state law, and are therefore invalid.
The lawsuit further accuses Marconi — who has served as director of the state’s ports and harbors since 2002 — of targeting the business with a steady stream of regulatory burdens ranging from parking disputes to the placement of the lobster pound’s propane tanks. The suit claims Marconi was motivated to do so because his family runs its own decades-old lobster restaurant in Portsmouth, which they view as competition.
The New Hampshire Attorney General’s office, which is representing the Pease Development Authority in the suit, said Tuesday that it “takes seriously any allegations of misconduct by public officials,” and that it is still reviewing the complaint.
While the Attorney General reviews the suit, it is simultaneously seeking to prosecute Marconi for alleged criminal conduct. In October, Marconi was indicted on allegations that he improperly shared confidential motor vehicle records belonging to Neil Levesque, who serves on the Pease board of directors. Levesque has defended the Rye Harbor Lobster Pound’s operations in recent years during public board meetings.
Claims of “intimidation,” “corruption”
According to its legal filing, the Rye Harbor Lobster Pound opened in 1996, nestled amongst the other shacks in the harbor that house an array of waterfront businesses including charter fishing boats and the Granite State Whale Watch.
After initially selling live lobsters and steamers, the restaurant has since grown its menu to include lobster rolls and other prepared foods. In 2020, during the pandemic, customers formed long lines and overwhelmed the parking area at the harbor.
According to the lawsuit, Pease chief executive Paul Brean, as well as Marconi, have used forms of “intimidation” and “corruption” since then, including the imposition of the concessions fee.
State agencies commonly charge concession fees at private businesses that operate out of state-owned properties, including at Odiorne Point State Park and the State House cafeteria.
In early 2021, the Pease board alerted Rye Harbor Lobster Pound that it could no longer serve prepared foods under its existing lease, which are known as Right of Entry agreements. That dispute eventually led to former Gov. Chris Sununu stepping into the fray; he signed a waiver allowing the restaurant to operate as normal.
According to the lawsuit, the PDA and Marconi then moved to alter the parking rules for the harbor, including eliminating short-term free parking spots, which the lobster pound alleges in its lawsuit was intended to negatively impact its customers.
Right of Entry agreements already under review
The restaurant's allegations that the PDA is improperly crafting lease agreements outside of state administrative procedures is already under review by the Attorney General’s office.
In a January public hearing, Steve Duprey, the PDA’s board chair, said that he raised the issue with the attorney general last September, and is still awaiting a response. The PDA has used Right of Entry agreements for decades, according to shack owners, who are in the unique position of owning the quaint structures, and even paying tax on them to the Town of Rye, but not owning the land beneath them, which is state property.
The shack owners have said they haven’t received clarity on if they will be able to operate their businesses this summer out of the harbor, including the popular Granite State Whale Watch. The PDA then announced it would begin crafting one-year extensions of the existing Right of Entry agreements, but warned that a ruling by the attorney general that the agreements are illegal would create an unclear environment moving forward.
