The East Hampton Town Board agreed last week to sell its 50-percent share of Poxabogue Golf Center to partner Southampton Town for $2.2 million, hoping to pay off the debt it incurred in purchasing the property, and to do it years earlier than expected to save on interest.
In 2004, East Hampton and Southampton towns each paid $3.25 million to purchase the nine-hole golf course in Sagaponack, a joint move to keep the 40-acre property out of developers’ hands.
Southampton used the Community Preservation Fund for the original purchase, and is expected to tap it again to buy out East Hampton, ensuring that the property will be preserved as a golf course.
Southampton Town Board members said they’ve been discussing the deal, but they haven’t taken any action yet. An appraisal of the property has already been conducted. Town Councilwoman Nancy Graboski said the board seemed supportive of buying the golf course.
“The Town Board reviewed the matter,” she said. “We discussed it and we felt that we would [be] amenable to purchasing it for that price. And East Hampton was amenable also. There’s agreement on both sides.”
East Hampton had to borrow money for the original purchase because it could not use its Community Preservation Fund outside town limits. It still owes $2.4 million for the property. East Hampton also expects to earn an extra $200,000 from the sale, drawn from its share of a joint reserve fund for maintenance.
The $2.4 million in revenue from the sale will be put in a reserve fund and used to pay off the related debt by 2016—the earliest date the town is allowed to fully pay off the bond. If the town did not sell the golf center, it would have finished paying off the debt in 2023.
The town plans to pay about $685,000 toward the principal of the debt over the next four years, because the town is barred by law from completely paying off the bond before 10 years. The town plans to pay the remaining $1.72 million in 2016, according to Budget Officer Len Bernard. By that time, there should be about $1.75 million remaining in the reserve fund, including the interest the fund would earn over the next four years.
Due to accumulated interest on the debt, the reserve fund will not cover the debt completely. Taxpayers will ultimately have to pay about $330,000 toward the debt, Mr. Bernard said.
But Mr. Bernard said the plan has two major benefits. Firstly, by paying off the debt in 2016 rather than 2023, the town is saving about $250,000 per year in debt payments it would have had to pay in the interim. Secondly, by creating the reserve fund to pay the debt, taxpayers are saved the $685,000 in debt service payments they would have had to pay over the next four years.
“It’s a no-brainer as far as I’ve concerned,” Mr. Bernard said on Friday.
Jordy Mark, a former Wainscott Citizens Advisory Committee chairwoman, said before the vote last Thursday, October 6, that she wanted the town to maintain its partial ownership of Poxabogue to keep some control over the golf center. She said ideas were floated in the past to add an upscale restaurant and night lighting at the facility.
“This will come up again,” she said. “There is no doubt in my mind that over the years there will be different ideas and proposals to expand the golf course and change it from the wonderful local facility it is to a more expensive and more exclusive place, or perhaps a night place with night use.”
Ms. Mark also said the decision at least deserved a more public vetting. “It feels like its being brought in so quietly as a resolution rather than as a public hearing,” she said.
“I think it’s pretty well-known that Poxabogue has been on our short list for a long while,” Supervisor Bill Wilkinson replied. “We’ve discussed it quite openly.”
The resolution to sell Poxabogue was approved 3-0, with Councilwoman Julia Prince abstaining, saying she believed the measure first should have been put up to a public hearing, although she said she supported the sale. Councilwoman Theresa Quigley did not attend the meeting but previously said she supported the sale.
Zachary Cohen, who is challenging Mr. Wilkinson in this year’s election, said in a press release on Sunday that Southampton “could drastically change the style of the course” when it becomes the sole owner.
“Supervisor Wilkinson has completely ignored the fact that people care about Poxabogue and embrace it as a beloved East Hampton institution, not just as a public golf course,” Mr. Cohen said. “People from East Hampton go to ‘their’ course for meals and recreation. Hundreds of people mobilized to buy Poxabogue. From the East Hampton residents’ perspective, the purchase of the residential development rights in 2004 was much less important than was the purchase of a golf course.”