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Nov 18, 2017 7:57 AMPublication: The Southampton Press

East Hampton Approves Sale Of Three Lots At Airport

The lessees of the parcels at 3, 39 and 41 Industrial Road have excercised their option to purchase their lots from East Hampton Town. Google
Nov 20, 2017 5:12 PM

The East Hampton Town Board last week approved the sale of three properties that are part of the East Hampton Airport industrial park, for a total of more than $4.5 million, to the tenants who have been leasing them for decades.

All three sales approved on Thursday, November 16, were the result of buyout options in the original leases, inked 20 years ago, which had also set lease rates that had since been far outpaced by demand in the market.

One of the lots, at 3 Industrial Road, is just over 2 acres and is owned by Wainscott Farms, a landscaping company. The property will be sold for just over $1.4 million.

The other two, at 39 and 41 Industrial Road, which house a number of business in two large buildings across from the East Hampton Police Department headquarters, are owned by limited liability companies controlled by Robert Rattenni. The two lots, which total nearly 6 acres, will be sold for a little more than $3.3 million in total.

All three lots are on the south side of Industrial Road, so they are not contiguous to the airport itself but are considered part of the airport and were part of the original subdivision that created the town’s main light-industrial district.

Like most of the more than two dozen lots that fringe the airport property, the three lots have been leased from the town for decades. The original lease rates were set at market value at the time, but allowed for only small annual increases, and are by now far below the current market demand. But each is also nearing the end of the original lease term, at which point the leases, if they are renewed, would be readjusted to current market value.

Mr. Rattenni had been paying just under $13,000 per year for his lease of 39 and 41 Industrial Road. Wainscott Farms was paying just $4,500 a year.

Since the town began renewing leases for similar properties at the airport at market values, leases for the industrial lots have climbed to between $30,000 and $50,000 per acre, per year, Councilwoman Kathee Burke-Gonzalez said.

The town recently agreed to lease a 2.5-acre parcel to the PODS storage container company for $90,000 per year, and two landscaping companies signed leases last year for more than $100,000 a year for nearby parcels. In 2014, the lease rate paid by the Phoenix House addiction treatment facility climbed from $100 per year to $58,000 per year.

The new lease schedule has caused some friction, with some tenants saying their lease agreements have been mishandled. The Town Board voted earlier this year to evict the Country School after the school’s founder, Deena Zenger, refused to sign a new lease that would up her annual rent from $3,000 per year to $76,000.

The current Town Board has taken advantage of the new lease rates and demand for industrial-zoned lots to help it boost airport revenue in hopes of being able to make the airport self-sustaining, without the need for Federal Aviation Administration grants, and the strings that come with them.

The sale of the three properties approved this week actually began about two years ago, but the town had to go through long negotiations with the FAA, which has the right to review any sale of municipally-owned airport property, before they could be approved.

Town Board members said on Thursday that the money from the sale of the lots will be put in the airport’s capital reserve fund, which is used to pay for major maintenance and upgrade projects at the airport.

The town is currently in planning stages for a new aviation fuel storage facility that will cost some $1.6 million and an extension of the main taxiway that will likely cost more than $2 million.

The board on Thursday evening also approved the sale of a 3-acre lot on Springs-Fireplace Road where the town used to operate its scavenger waste plant, to the East Hampton School District, which plans to use the land as its new school bus depot.

The approved sale price is $2.3 million, but the sale is still contingent on approval by school district voters in a referendum that has yet to be scheduled.

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Developers are salivating...yum...:)
By Toma Noku (588), Southampton on Nov 19, 17 3:35 PM
Prime example on how financially inept the Town can be.
By Amagansett Voter (30), Amagansett on Nov 19, 17 5:21 PM
Sale of assets to pay for maintenance. Clearly a plan set up by someone who failed economics 101.
By bird (647), Sag Harbor on Nov 20, 17 1:57 AM
Remnants, area rugs, rolls in stock