Beach Nourishment Project Could Impact Home Values

Last Tuesday afternoon, October 15, at 2:50 p.m., Great Lakes Dredge & Dock began excavating more than 3 million tons of sand with a 300-foot-long dredging vessel in Shinnecock Bay to be pumped onto beaches from Flying Point in Water Mill to Townline Road in Sagaponack.

The bulk of the sand will actually be placed beyond the surf line—creating a more gradual slope leading to the visible beach—to dampen the erosive effects of storm waves. The project will not directly rebuild the decimated dune systems, but engineers have said that having the broad sand beach will help dunes rebuild naturally on their own.

The lion’s share of the $25-million tab will be paid by the homeowners who live along the oceanfront, though Southampton Town—which owns five public beaches in the project zone—is contributing $1.5 million. The anticipated completion date is January 1, weather depending, according to project consultant Aram Terchunian of First Coastal Corporation in Westhampton Beach.

“There’s an old expression: ‘Everybody talks about the weather and nobody does anything about it.’ This is a group that, in conjunction with the town, is doing something about it. Instead of complaining, they’re acting,” Mr. Terchunian said of the forces behind the project. “This will create a much more stable beach. And, typically, the more stable and predictable the beach, the more valuable the property.”

Until recently, prospective buyers have backed away from some areas of the Hamptons shoreline, according to Town & Country Real Estate Chief Executive Officer Judi Desiderio, particularly after Superstorm Sandy wreaked havoc up and down the East Coast nearly one year ago.

“There are a couple houses we all know that are hanging out on the brink in Sagaponack—literally, the sand is rushing underneath them,” she said last week during a telephone interview from her East Hampton office, pointing out that the East Hampton Town Board is also considering options to protect downtown Montauk and its beaches. “It takes a very unique buyer to take that gamble. But if the shoreline is built up, then the tune changes to, ‘It would take one hell of a hurricane to get to me,’ as opposed to, ‘It’s just a matter of time.’”

To date, there are nine oceanfront properties on the market from Water Mill to Sagaponack, according to Douglas Elliman Real Estate agent Chris Chapin. They range from a 1,100-square-foot residence in Sagaponack listed at $9 million to a 9,500-square-foot manse in Bridgehampton listed for $30 million.

“The structures themselves are modest,” Mr. Chapin said of the Sagaponack listings last week during a telephone interview from his East Hampton office. “The value is entirely in the land.”

Over the last two decades, prospective homeowners on the East End have weathered stormy seas: the stock market crash, a depressed economy and a bleak picture of the real estate industry—compounded by oceanfront manses falling into the Atlantic due to rapid and devastating coastal erosion.

Today, that isn’t stopping wealthy buyers from going after what they want, Mr. Chapin said.

They want oceanfront.

“It’s the most valuable property on the East Coast, especially in Sagaponack, the most expensive ZIP code,” Mr. Chapin said. “So to be on the ocean in Sagaponack is luxury upon luxury. And, all of a sudden, the Sagaponack oceanfront is going to be coming back.”

Thanks to the renourishment project—designed and engineered by the project consultants, First Coastal Corporation and Coastal Science & Engineering of South Carolina—now under way along a 6-mile stretch from Water Mill to Sagaponack, East End real estate agents are predicting a surge in oceanfront property values—a 30- to 50-percent increase in some cases, Mr. Chapin said.

“It’s pretty much impossible to put any particular number out there,” he said. “Any oceanfront property, I wouldn’t be surprised to be seeing an acre property going for $20 million in the not too distant future. As soon as the rebuild is done, it’s going to skyrocket the values along the oceanfront.”

In 2007, attorney Gary Ireland—who unsuccessfully sued Suffolk County and the Army Corps of Engineers for, in the 1950s and ’60s, building four stone groins on the Georgica Pond estate beachfront that he blames for erosion in Bridgehampton and Sagaponack—hired Given Associates of Calverton to appraise his family cottage’s nearly 1-acre property in Sagaponack, which had suffered dramatic coastal damage.

In its “as is” condition in 2007, the home’s appraisal came back at $7 million, according to the report by Given. But under a hypothetical condition where there was no existing erosion, the property value was reported as $10.5 million at that time—a 50-percent increase, said Lorraine Hughes, a partner at Given Associates.

“It is my opinion that property values are probably higher now than they were in 2007 in the Sagaponack neighborhood, which is not true of all neighborhoods on Long Island,” she said last week during a telephone interview. “But I think that 50-percent number remains true. The problem is we don’t have a base to start at what it’s worth today.”

Mr. Chapin anticipates that many of the parcels on the market will be scooped up for their locations alone, resulting in subsequent teardowns, he said. They are merely placeholders and, most likely, the circa-1938 Ireland family cottage on Potato Lane in Sagaponack will be among them.

Soon, Mr. Ireland is planning to put the house up for sale—“We’ll let somebody else enjoy it,” he said—and move onto a new chapter of their lives. Still unheated and unadorned, built decades before manses and estates dotted the revered coastline there, the 1,000-square-foot home has been moved back from the ocean twice—once in the 1970s and again in 1998 after a cousin’s home nearby fell into the ocean six years prior.

“It was really sad, especially because this didn’t have to happen,” Mr. Ireland said last week during a telephone interview from his Manhattan office. “We started working on this about 15 years ago, in the late 1990s. We were hoping to get exactly the plan that, pretty much, is implemented. It’s a pretty exciting time.”

The renourishment project’s finale will also mark the dawn of a new era for the Sagaponack shoreline. And it starts with the buyers, according to Mr. Chapin.

“The people who want to be in Sagaponack, they’re the masters of the universe. And Potato Lane is poised to be on fire,” he said. “It has everything. You drive through an agricultural area to get to it. It’s south of Daniels Lane. It’s a dead-end road. You’re rubbing shoulders with some of the wealthiest people in the world. You have Ira Rennert a hop, skip and a jump away. A quick sea gull’s flight to the left.”

But, perhaps, the renourishment project’s impact is already being felt, Ms. Desiderio said.

“I think property values, right now, have gone up,” Ms. Desiderio said. “I think that property values are at the highs or beyond the highs. So I think they will hold their value because there were a lot of people who were afraid to go near the shoreline. Now, they’ll hop back into that region. They’ll come back.”