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Mar 11, 2015 10:52 AMPublication: The Southampton Press

Market Analysis Predicts Issues, Limited Gains From CVS In Westhampton Beach

Mar 11, 2015 1:24 PM

A market analysis of the potential impact of allowing a CVS Pharmacy to occupy the old bowling alley building on Sunset Avenue in Westhampton Beach has found that it would likely hurt existing businesses and provide little to no tax benefit to the village.

However, the attorney representing Manhattan-based Sunset West LLC and Tessera LLC, the developers hoping to renovate the bowling alley into a multi-use commercial complex, said this week that those results cannot legally stop the Village Board from granting the special exception necessary for the chain store to set up shop in Westhampton Beach.

“Here’s the real bottom line: A municipality can’t say to somebody, ‘You can’t come into town because there’s already another use like that or another business like that,’” said John Bennett of Southampton-based Bennett and Read LLP.

“You can’t do it,” he continued. “Think about basically how un-American and anti-competitive that is—that’s what the courts have found.”

At 10,000 square feet, the CVS would take up roughly half of the 20,917-square-foot bowling alley building, which would also likely be host to a 50-seat restaurant, three retail shops and two food vendors. Because the pharmacy takes up more than 3,000 square feet, the applicant must secure a special exception from the Village Board, and part of the application process for that is the completion of a market impact study.

By law, before granting a special exception, the Village Board must determine that the business “will not have an undue adverse impact on the community,” based on several criteria, including the existing retail market.

The $13,500 study, paid for by the applicant and conducted by the Community Land Use and Economics, or CLUE, group of Arlington, Virginia, was completed last month. Although it gave no recommendation about whether or not the special exception should be allowed, the report found that Westhampton Beach is already oversaturated when it comes to health and personal care stores and various other drug stores within a 10-mile radius that already accommodate Hampton Bays, Eastport, Manorville and Riverhead, meaning it’s doubtful that the Westhampton Beach pharmacy would attract many patrons from the surrounding area.

Some community members fear that allowing a CVS will drive out existing businesses, such as Barth’s Pharmacy across the street on Sunset Avenue, and the Rite Aid just a stone’s throw away on Main Street.

Westhampton Beach Mayor Maria Moore said she and the village trustees have each received a copy of the study and reviewed it, but noted that they are waiting to receive a written response from the developers before discussing it.

The report states that “a new pharmacy would generally be expected to divert some sales from existing pharmacies, rather than absorbing unmet market demand.”

In a written response to Sunset West, Westhampton Beach Village Planner Kyle Collins contested part of the analysis, stating that it looked at “the market” through too limited of a scope, assessing only Westhampton Beach when, in his opinion, it should have also included Quiogue, Westhampton, Speonk, Remsenburg, Quogue and West Hampton Dunes.

Mr. Collins did not return multiple calls seeking comment this week on the report and his response.

The report also found that a CVS “is not likely to generate significant new property tax revenue for the Village of Westhampton Beach,” and certainly not more than any other retail tenant. Meanwhile, the business itself would pay less than most other commercial spaces would in sales tax because the vast majority of the items sold in a CVS are tax exempt, according to the report.

Mr. Bennett said he believed putting a CVS into the space would increase the taxable value of the property, but added that, even if it didn’t, that would not be a legitimate reason for denying the special exception either.

Unlike a variance, which requires a change of zone to allow a use that otherwise isn’t allowed, Mr. Bennett explained, a special exception is a permissible use, but one that needs a special exception to take effect.

He declined to say whether his clients planned to sue the village if the special exception isn’t granted. “I’m not a pessimist,” Mr. Bennett said. “I’m going to be optimistic and assume the best.”

Mr. Bennett is also representing CVS in the pharmacy’s quest to open a location in the hamlet of Bridgehampton. In that case, the chain is suing the Southampton Town Planning Board for requiring an environmental review of the project before granting approval and, as a result, that application is also stalled.

The report determined that a CVS would not “contribute positively to the town center’s uniqueness.” But when focusing on other factors, such as traffic, walkability and housing, the document also notes that the presumed negative effects that come with a pharmacy would not be significantly greater than if any other business were to occupy the same space.

In addition to renovating the bowling alley, Sunset West LLC and Tessera LLC are looking to build two new two-story commercial buildings next door, on the corner of Mill Road and Sunset Avenue.

Previously, the Westhampton Beach Planning Board approved a site plan for the bowling alley site that would have allowed a 50-seat restaurant, eight retail stores, two offices and two food shops. Construction has been stalled on the project for months as the developers await a decision on their special exception request.

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What genius paid for this? If the current owner is paying taxes under the current condition and is paying taxes once CVS is in place the marginal difference if there is ANY at all would be minimal. The only way you get a bump in those type taxes is if the property was undeveloped or had a different designation (e.g. R1). Now of course if there is a third drugstore it would likely take away from Rite Aid and Barth's (more so Rite Aid in that Barth's keeps limited store hours and is not an apple ...more
By Hambone (512), New York on Mar 11, 15 12:11 PM
Forget calling this the suburbanization of Westhampton Beach; that's already happened. This is the urbanization of Westhampton Beach, and it's horrible.

Deny the special exception, let the applicant sue, and try to convince the court that: [1] this is a case for a variance and not a special exception, or [2] preserving the village's character trumps the technical rules on special exceptions versus variances.

The litigation will cost some money, but it's worth it. because this ...more
By Turkey Bridge (1957), Quiogue on Mar 13, 15 11:48 AM
Why bother mentioning the impact of sales tax? That has absolutely no bearing on WHB. It is a state tax and the impact is the same to the state of WHB if the CVS is in WHB, Quiogue, or Garden City.

As for suburbanization vs urbanization that would seem to have some point of subjectiveness. What is undeniable is that right now and for the past ten years it looks more like a ghetto than the Hamptons! Build something...anything...eliminate the suburban/urban blight
By Hambone (512), New York on Mar 20, 15 4:14 PM
Hot Tubs,SALE, Southampton Village, SouthamptonFest weekend