As Lease Deal Crumbles, Sag Harbor Will Ask Public Service Commission To Nullify Potter's Contract for Gas Ball Lot

At the 11th hour, developer Adam Potter pulled out of a deal to sublet what is commonly known as the gas ball parking lot to Sag Harbor Village, officials said on Wednesday, November 30, adding that they would ask the State Public Service Commission to intervene on their behalf.

The Village Board held a brief executive session that morning, at which it agreed to petition the PSC to annul the lease that National Grid signed last year with Potter’s 11 Bridge Street LLC, as not being in the public interest and causing economic harm to the village.

The village also claims that Potter initially represented that he was seeking the lease for the nonprofit Friends of Bay Street, which was formed to build a new Bay Street Theater, before ultimately obtaining it for his for-profit company.

In addition, the village’s petition says that Potter’s lease with National Grid specifies that the property can only be used for a parking lot — but that standalone private parking lots are not permitted under the current village code.

“This deal is not in the public interest. Period. Exclamation point,” said Mayor Jim Larocca in a press release issued Wednesday morning. “Giving the parking lot to a for-profit will do irreparable harm to this community.”

Larocca also said the process was “tainted” when Potter substituted 11 Bridge Street LLC for Friends of Bay Street, and that National Grid should not have allowed the swap. “The switcheroo smacks of foul play,” he said.

Larocca said that in this initial step the village would ask the PSC to allow the village to continue to use the property until a long-term lease or other arrangement can be worked out.

Last year, Potter outbid the village to lease the parking lot, which Larocca said has a capacity of between 95 to 100 vehicles. The lot, at Bridge Street and Long Island Avenue, is typically used by workers and village residents seeking longer-term parking, the mayor said.

After that deal was announced, Larocca succeeded in convincing National Grid to delay the start of Potter’s lease until January 1, 2023, to allow negotiations involving the village, Potter and National Grid to continue.

That effort appeared to have borne fruit — in August, the mayor announced that a deal had been struck in which National Grid would allow Potter to sublet the property to the village for 99 years, with the village agreeing to pay Potter $40,000 annually for the first 10 years to reimburse him for a $400,000 payment he was required to make to National Grid.

That deal was signed by both Potter and Larocca on September 28.

But Larocca said that about a week ago, Potter informed the village that he would not go through with the deal — blaming a lawsuit recently filed by Save Sag Harbor and several village residents seeking to overturn two laws the Village Board passed earlier this year to facilitate the creation of affordable housing.

“He told me the onset of the Article 78 attack on our affordable housing initiative put everything into an uncertain environment, and therefore he was not comfortable proceeding,” Larocca said.

Immediately after those local laws were adopted, Potter submitted plans for a 79-unit affordable housing complex that would include approximately 33,000 square feet of commercial space. The proposal has been panned by many village residents, although the Village Board, which has begun to review the application, has refrained from weighing in on the merits of the proposal.

Potter declined to comment on Wednesday. But his attorney, Tiffany Scarlato, reached Wednesday morning, said the village should have reached out to Potter first.

“They don’t need to go to the PSC,” she said, adding that Potter and his representatives would be happy to discuss any additional ideas the village might have to resurrect the deal.