PSC Closes Public Comment Period on Sag Harbor Gas Ball Lot Review

Supporters of developer Adam Potter’s effort to retain control of the lease for the National Grid gas ball parking lot in downtown Sag Harbor came out in force in the final days as the New York State Public Service Commission accepted public comment on the proposal.

Sag Harbor Village has used the property, which has space for approximately 100 vehicles, for overflow and long-term parking for the past decade, and has opposed National Grid’s decision to award a long-term lease to Potter’s 11 Bridge Street LLC.

But the last 61 of a total of 137 public comments that were submitted on the PSC’s website came down squarely on the side of Potter. Many of the comments, which poured in between Friday, March 3, and Monday, March 6, the last day for the public to weigh in, cited the housing crisis and the need for the 79-unit affordable housing complex that Potter has proposed for the area south of the lot, as well as the need for parking to serve that development.

After a deal to have Potter transfer the lease he won in 2021 back to the village fell through last year, the village has sought to prevent National Grid from finalizing its contract with him, arguing that the public need for parking trumped the income the utility would receive by signing the long-term lease with 11 Bridge Street LLC.

Potter’s lease with National Grid calls for a lump sum payment of $400,000, followed by annual payments of $50,000 for the next 15 years, with 5 percent increases every 15 years, for a total of 99 years.

This week, Mayor Jim Larocca wrote to the PSC, urging it to reject National Grid’s deal with Potter. “It’s not in the public interest to elevate a private use over our public use of this asset,” the mayor wrote.

National Grid is viewing that public interest “exclusively through the prism of what is best for its customers,” Larocca continued. “It barely mentions the community in which it is licensed to provide exclusive gas services.”

The mayor has said the PSC is required to weigh benefits to shareholders against the broader community good.

The village and Potter have been engaged in a tug-of-war over the gas ball lot since early 2021, when National Grid, which had earlier announced its intention to sell the property, changed course and decided to continue leasing it.

In June 2020, former Mayor Kathleen Mulcahy had supported Friends of Bay Street, the not-for-profit Potter established to build a new home for Bay Street Theater, in its bid to buy the gas ball property. Mulcahy said later that she had supported the theater group in a letter to National Grid because the village could not afford to buy the property itself. When National Grid put the property up for lease again, Mulcahy withdrew her letter supporting Friends of Bay Street.

Early in 2021, Potter had implied that it was the not-for-profit Friends of Bay Street that was interested in leasing the land, but he later bid on it through his for-profit entity, 11 Bridge Street.

Whether Potter kept his intentions quiet on purpose is of little importance, Larocca said, but the change from a not-for-profit to a for-profit lease “is a central problem that goes to the integrity of the lease process,” he wrote.

The village has also argued that the village code does not allow a private entity to operate a stand-alone parking lot that is not on a property with a primary structure, and Village Attorney Elizabeth Vail addressed that issue in a separate letter to the PSC.

Earlier this month, Larocca said he was cheered when the PSC planned to hold a full review by commissioners of the lease proposal and not hand it off to its administrative staff. But he said on Monday that he had no indication of how or when the commission would rule.