Advocates call for preservation push

The East End’s real estate market has clawed its way out of the doldrums of economic recession in the last 10 months, carrying with it the one-time revenue juggernaut of the Community Preservation Fund, the dedicated land preservation program that has helped East End municipalities protect more than 7,000 acres of land from development since 1999.

Revenues from the CPF’s sole funding source, a 2-percent tax on real estate sales, have climbed steeply in the first half of 2010, following a slump in 2009 when the housing market ground nearly to a halt.

Now, with revenues in Southampton and East Hampton already nearly matching last year’s totals, many of the same voices that trumpeted the virtues of land preservation in the late 1990s, when the CPF program’s bylaws were drafted by the five easternmost towns in Suffolk County, are again calling for the program to be picked up with renewed gusto to take advantage of ripe opportunities and low prices.

“Right now, we have over a year of really solid revenues, especially on the South Fork, and there are incredible opportunities for the towns to grab land,” said State Assemblyman Fred W. Thiele Jr., one of the framers of the CPF program. “Prices are lower now than they have been in some time, and there are a lot of eager sellers out there. This is again the time to be really aggressive.”

But turnover in local government, economic crises that distracted from preservation efforts, and a laundry list of controversies over the use and misuse of CPF funds has some preservationists concerned that the public managers who control the preservation money have lost sight of what the program was intended to do, even if local residents haven’t lost the enthusiasm for protecting land.

In the last two years, the pace of preservation has dropped off significantly. In 2001, Southampton Town purchased 560 acres of land with CPF money. In 2009, the town purchased just 42 acres. Likewise, East Hampton Town preserved 363 acres in 2001, but just 30 acres in 2009.

At the same time, some local governments were justifying the use of larger and larger chunks of CPF revenue for uses other than land preservation. Tax abatement, loosely identified maintenance work on preserved land, and—in the most glaring case of misused funds—improper loans to cash-strapped municipal accounts for funding day-to-day government operations, which landed East Hampton Town’s budget officer in handcuffs.

Environmental watchdogs, including Richard Amper, the executive director of the Long Island Pine Barrens Society, say the trend has to be reversed immediately, and the emphasis must be put back on purchasing large chunks of land.

“There’s no institutional memory on the South Fork, and the current crop of politicians came to look at the CPF as a cash cow to be used for all purposes,” Mr. Amper said recently. “That’s just against the law. It may seem like a bizarre request, but can we please use the money, which people voted for using to buy land, to buy land, please?”

Since it was created by public referendum in 1999, the CPF has raised some $650 million for land preservation. In 2007, voters overwhelmingly supported extending the program another 10 years, through 2025, giving towns even more anticipated revenues to borrow against. The flood of revenue has been used to preserve about 7,000 acres of open space in the five East End towns.

Still, the totals are a fraction of the goals set by preservationists in the 1990s, who foresaw preserving 35,000 acres of land from development—and preservationists say it’s time to remind governments that the money is there and the land still needs to be bought.

“A lot of the original players are gone, and those who have replaced them need to be made aware of what was intended by the public,” said Kevin McDonald, a preservation advocate for the Nature Conservancy. “They need to be walked through the history of how the CPF happened, and why it happened.”

The reasons for the drop-off in purchases in the last two years were many. Primarily, the stalled economy and sluggish real estate sales meant that towns had much less cash available to them in 2009 than they had become accustomed to. Southampton Town, for example, saw its CPF revenues drop from a high of more than $53 million in 2007 to $24 million in 2009, the lowest level since 2002.

Substantial chunks of that—about $8 million annually in Southampton—is dedicated to debt service on tens of millions borrowed against future revenues. Southampton has borrowed nearly $100 million; East Hampton, $50 million.

As the economy collapsed, East Hampton and Southampton also both discovered disastrous accounting mistakes that appeared to result in tens of millions of missing dollars—in East Hampton’s case, a deficit that has ballooned to more than $30 million. Preservation efforts took a back seat.

“We get it—when the house is on fire, you don’t spend too much time dusting the bookshelves,” Mr. McDonald said. “They had to get their houses in order. They had no confidence in their financial statements.”

Southampton’s accounting quagmire turned out to not be as financially crippling as initially feared, and while East Hampton will have to bear the burden of borrowing $30 million to cover its deficit for many years, Mr. Amper says that with CPF funds again climbing and the future brightening, preservation efforts should not be curtailed by other concerns going forward.

The public is still strongly on the side of preservation, he says. “During the recession, we did a poll that showed 80 percent of residents still wanted the land preservation programs maintained or expanded,” he added. “The economy, school taxes, financial belt-tightening—none of that should stop the towns from doing land buys. There’s no new taxes involved, there’s no spending for the towns. The money is in place.”

Officials in the two towns say that with the new influx of money from late 2009 and early 2010 revenues, the programs are preparing to get back on track by late fall. The program’s managers in both towns say major purchases that had been stalled are set to be finally completed and that many new purchases are in the queue.

“We’re prioritizing projects right now, starting with the ones that were dropped in 2008 and 2009,” Southampton Town CPF manager Mary Wilson said. “We’re in a good place to make the program work on its main focus, which is the preservation of land.”

Southampton has taken in about $17.5 million through the CPF in the first half of 2010. First on Southampton’s anticipated acquisition list is the 33-acre Bailey’s Motel property in Westhampton, which it hopes to purchase in partnership with Suffolk County for about $7 million.

Southampton Town Supervisor Anna Throne-Holst says the town has altered its parameters for CPF money being used for tax abatement—an amount which reached nearly $5 million in 2007—and for the use of money to make improvements on CPF properties.

In East Hampton, a number of projects that have been on hold, most notably the 25-acre waterfront Boys Harbor camp property, are again marching toward preservation. East Hampton CPF manager Scott Wilson said this week that he expects the Boys Harbor deal to finally close by the end of summer, more than two years after it went to contract. Another large parcel, 28 acres in the Northwest Woods region, should be added to the preservation rolls within two months as well, and he expects a handful of other deals to be completed by the end of the year. The town expects to have $18 million on hand by the end of the year, after it has paid the $4 million annual debt service, dedicated to acquisitions.

“Our program should be completely back on track this coming month,” Mr. Wilson said, noting that the town’s CPF account is still owed $9 million from operating accounts, part of some $17 million in total that was improperly diverted to other uses by former town budget officer Ted Hults. Mr. Hults pleaded guilty in June to securities violations but received no jail time.

Along with stricter accounting of all CPF monies, East Hampton’s new administration is in the midst of debate on some new CPF management plans, including giving its independent CPF committee more control in directing purchases.

“We have a committee of very competent people and they are starting to introduce certain disciplines to selecting and evaluating properties, so the Town Board is a step removed from the process,” Supervisor Bill Wilkinson said.

Regardless of how the decisions are made, preservationists say that the towns need to get on the ball quickly, while real estate prices are moderated and property owners are more willing to sell to preservation with development values slumped.

“In 2004 and 2005, willing sellers may have been harder to convince to sell, but now there are plenty of willing sellers,” Mr. McDonald said. “Right now, the towns could be a very important player in the market. Frankly, when people are afraid, that’s when you should be in the market.”