Sagaponack Building Plan A Mystery To Officials

A building application in Sagaponack has raised eyebrows, not for the magnitude it proposes, as is usually the case in the epicenter of the region’s most grandiose real estate market, but for its apparent modesty.

Perhaps an 8,600-square-foot house—not counting the 2,300-square-foot finished basement and 2,400-square-foot garage and accompanying “cabana”—isn’t exactly modest by most standards. But it’s about average for a new Sagaponack house. And considering it’s to be built on a nearly 44-acre parcel of oceanfront land, and set as far back on the property from the ocean as possible, the application has drawn skeptical looks from those who know its pedigree.

The application has the appearance of being an attempt at an end-run around a regulatory roadblock to the owners’ actual plans for the development of the rare and valuable parcel.

Several years ago, on this same vacant former farm field, the last that runs from a public roadway all the way to the dunes, a subdivision was proposed that called for three large oceanfront estates, each likely to be worth several tens of millions of dollars. It was the first subdivision plan to be presented to the newly formed Sagaponack Village Village Board, which had just adopted planning duties from the town following the incorporation of the village.

The village and representatives of the property owners agreed to a subdivision plan that allowed for the three oceanfront estates and a fourth lot that could be developed with barns or sheds. As requried by the village code, 65 percent of the property would be preserved as agricultural lands.

But legal warring between the three partners in the LLC that owns the property bogged down the application for years. In 2009, Marc Stanley Goldman, the managing partner of the property’s holding company, Sagaponack Realty LLC, filed a $30 million complaint against his business partners: telecommunications mogul Michael Hirtenstein and banker Milton Berlinski. The suit alleged that the partners refused to pay the company’s business expenses and refused to allow him to make modifications to the subdivision lot lines as required by the village in its review of the original proposal.

Mr. Goldman sold Mr. Hirtenstein and Mr. Berlinski each a one-third stake in the company for $15 million apiece in 2005, according to the lawsuit.

The original plan was finally withdrawn last spring and immeditately replaced with a new proposal that called for the three oceanfront estates as well as a fourth housing lot at the nortwestern corner of the property, running along Daniels Lane. The Village Board balked at the plan, objecting to the new designs, largely because the location of the fourth lot would have plopped a house in the middle of a drainage swale for the property.

That proposal was then withdrawn and, just a month later, the latest plan, for a single house on the northwester corner of the lot, was presented to the village. The proposal was initially haphazard and quizzical because it eliminated the three oceanfront parcels entirely.

“There were a number of odd things about it that made us wonder how serious the application was,” Sagaponack Village Mayor Don Louchheim said. “Aside from the fact that it didn’t utilize any of the oceanfront property, the house was put in the middle of a clearly identified drainage course, the [architectural] plans had just been downloaded from the internet, the swimming pool was wedged into the lot where there was a six-foot elevation change. They’ve since modified it ... so it makes a little more sense for actual development, but there’s clearly something else going on here.”

The presumption among those familiar with the application in the last few weeks is that the proposal is simply meant to create a fourth building lot on the property, in addition to the three oceanfront lots, which most assume will be resurrected at a later date.

In the initial application, the westernmost of the three lots was seen as being somewhat less desirable than the other two because of its proximity to Peters Pond Lane, a small but popular public beach, and because the contour of the property would require that the house on that lot be elevated on pilings to keep it out of a flood zone. A fourth building lot carved out of the property in hyper-valuable south Sagaponack would allow the owners to sell the additional lot and divide proceeds disproportionately to compensate whichever of them was to take ownership of the westernmost oceanfront lot.

David Eagan, the East Hampton attorney who submitted the application on behalf of Sagaponack Ventures LLC, could not be reached for comment. But he has said in meetings before the Sagaponack Village Board, which also serves as the village’s planning board, that the current application does not in any way preclude the owners of the sprawling property from proposing further subdivision of the land in the future. When asked to submit a sketch of what the applicants saw as future development possibilities for the property were the single house lot to be approved, Mr. Eagan submitted the drawings of the four-lot subdivsion presented to the board last summer.

While a single house on a 44-acre lot may have seemed immediately diffucult to derail, village planning and engineering consultants quickly reported to the village that if just one house was to be built on the property, the northwestern corner would be about the last place they would recommend it be placed.

Sagaponack Village’s attorney, Anthony Tohill, said that in light of the size and character of the property, the application for the single house in the northwestern corner is unlikely to be approved by the village as proposed.

“The village code allows the board, in a review of this application, to locate the house where they deem appropriate,” Mr. Tohill said. “And if they are allowed to locate the house, they’re probably not going to locate it in this spot. I could see there being significant concerns about access and visual impacts with it there.”

There are limited alternative locations where the house could be sited, while still allowing for the original plans for three oceanfront lots to be brought back. In 2009 the owners of the property donated an easement over 58-percent of the property to the Peconic Land Trust. The easement was valued, by the owners, at $45 million, thanks to the property’s three-acre zoning, bringing them a windfall in tax relief from the land’s latent value.

Zoning would have allowed as many as 14 lots to be created on the property. The easement sterilized about 58 percent of the property and allowed that up to four residences could be built on the portions that remained developable. But an additional chunk of land would have to be sterilized as well to meet the 65-percent preservation requirement in village code.

Despite the apparently substantial hurdles and doubts about the intentions and feasibility of the application, it was deemed complete by the village last month, allowing the official review of the application to move forward. It is expected to be discussed again at the board’s April planning work session.

“I’m not sure we’re ever going to solve it, so we’ll move to the public hearing phase and give the public the chance to weigh in,” Mr. Louchheim said. “But we’re still puzzled. We’ve been puzzled by this all along.”