Supporters of an ambitious plan to reconstruct a six-mile stretch of ocean beach from Water Mill to Sagaponack say that the vast majority of the property owners within the project’s reach see the pressing need to restore the once broad beaches and are willing to ante up the lion’s share of the nearly $24 million it will cost to get it done.
That will be important, because Supervisor Anna Throne-Holst said at a hearing on the proposal last Thursday evening, August 30, that if the Town Board approves the project later this month as expected, it will call for a referendum of support among the 125 property owners who will be asked to foot the bill. The matter would have been subject to a permissive referendum, whereby opponents could have petitioned for a public vote, but the board instead will go directly to the public for approval.
A few of those property owners, most notably the family of Sagaponack farming scion John C. White and officials of The Bridgehampton Club, have raised issues of fairness with the formulas used to compute the taxes each property owner must pay for 10 years to fund the work, if it goes forward. In both instances, the argument of the property owner is that they have signed away their rights to develop the property for the potentially giant profits of residential development. In the case of the club, the development rights were donated in 1995, and in the Whites’ case, the development rights to the farm field were sold for millions of dollars from the town’s Community Preservation Fund. Therefore, they argue, they have less to protect than some of the owners of homes worth tens of millions of dollars that surround them.
The Whites’ condition is seen largely in a sympathetic light by those supporting the project, and town officials are working to try to find a way for the Whites to free themselves from the more than $60,000 per year they would have to pay in new taxes. The club’s situation is looked upon with less compassion, partly because the club and it’s membership are seen as able to bear the financial burden, and partly because the beach is a considerable asset to the club and available for substantial improvements should the club members choose to expand its facilities.
The beach rebuilding project proposal calls for some 2.5 million tons of offshore sand to be pumped onto beaches from Flying Point Beach in Water Mill to the East Hampton Town line in Sagaponack Village. The project would be funded by bonds issued by the town and repaid over 10 years, with the taxes levied on the property owners. The town, which owns five public beaches in the project reach, would pay about 11 percent, or around $3 million.
Most of those who have voiced objections to the project—just a half dozen or so homeowners in total, the organizers of the effort claim—are homeowners who say the beach and dunes in front of their properties is wide enough to protect their homes from storms, and they don’t want to pay to protect others’ property.
But in the case of the Bridgehampton Club and the White family, the issue is the formulas used to calculate each property owner’s tax burden.
In Bridgehampton, the tax is calculated solely according to linear footage of beachfront of each property: about $90 per foot, per year. The average property in Bridgehampton has about 150 feet of frontage.
The Bridgehampton Club, which owns 13 acres of land and 579 feet of beachfront just to the west of Ocean Road in Bridgehampton, is on the hook for a little more than $498,000 over 10 years, should the project be approved as proposed. Bridgehampton Surf & Tennis, just up the road, has about 120 feet more frontage and will pay about $100,000 more over the life of the loans.
But The Bridgehampton Club’s property is assessed at just $1.2 million because of the easements barring development on its grounds that came with the donation of development rights, while the very similarly sized Surf & Tennis property is assessed at $35 million. That disparity is why the club says the tax formula is unfair—and also why the erosion district organizers say it is the only fair way to proceed.
“We jumped through the corporate hoops and … we gave the land to Peconic Land Trust,” former club President Otis Pearsall said from the airy card room of the club’s tiny, covered pavilion near the ocean hidden behind a wall of heavily vegetated dunes.
“Is this going to bankrupt anybody? No,” current club President John Millard added, acknowledging that the cost of the project would raise the annual fees for the club’s 270 members, which already are about $5,000 per year, by only about $150. “But that’s not the point we’re making. The point we’re making is that we want to be treated fairly.”
The formula for taxing the property owners was determined back in 2010, when the Bridgehampton Erosion Control District was created by the town, without objection from any of the new taxpayers—before the scale and cost of the anticipated project the district was formed to fund had been discussed publicly. Those who played a hand in deciding what formula should be used say that the linear footage calculation is fair, simply because it forces The Bridgehampton Club to pay the same as their neighbors.
“We picked the linear footage [tax basis] because the project itself would be charged on a linear foot basis,” Bridgehampton resident Jeff Lignelli, who has spearheaded the residents’ effort to create the taxing district and design the massive rebuilding project, said this week. “This project is basically buying sand, and each homeowner should pay for the sand they’re getting on the beach in front of their home. The [Bridgehampton Club] should pay for the sand on their beach—they don’t need other homeowners to pay for sand that is going on their beach.”
In Sagaponack, the tax is calculated by a combination of linear footage and assessed values. The organizers of the erosion control district there decided on the combination formula because of the anomaly of a few very large, very highly valued parcels—most notably Ira Rennert’s 63-acre estate, valued at more than $240 million. Mr. Rennert’s estate was also one of the reasons basing the tax on assessment alone would be equally unfair, since he accounts for a disproportionately large chunk of the overall assessment of the district.
“All we did was attempt to do the fairest thing we could do,” said Alan Stillman, founder of the TGIFriday’s and Smith & Wollensky restaurant chains, and the frontman for the Sagaponack Erosion Control District’s portion of the beach project. “Of course, there might not be such a thing as completely fair. But I haven’t heard anybody say, ‘Ah ha! I have a better method.’”
The difficulty that arose with the Whites is that their 24 acres of oceanfront land, most of it working farm field, and its more than 1,000 feet of beach frontage, obligates the family to more than $600,000 in taxes over the life of the bonds—the second-largest single burden, behind Mr. Rennert, who will pay more than $2 million over 10 years—even though the property doesn’t hold immense value because it cannot be developed.
“It’s a lot of money to pay—we can’t afford it,” said John N. White, one of the elder Mr. White’s three children, who each own a portion of the protected land in trust. “The assessment is fine, it’s the frontage that really hurts us, and we can’t subdivide the property or anything.”
The family sold the future development rights on all of the land in a three-way deal with the town and Peconic Land Trust for $14 million in 2005, but retains ownership of a cluster of tiny cottages nestled on 3 acres among the dunes, which they rent in the summer. The family has claimed in the past that the bulk of the money they got from the town went to property taxes and legal fees stemming from the sale of a 9-acre parcel to a former tenant, Anthony Petrello, and the decade-long court battle that ensued when the family tried to back out of the deal because the taxes they would owe on the land were more than the sale price.
Supervisor Anna Throne-Holst said that attorneys for the town and the Whites have been trying to find a way to help the family exempt themselves from the tax, or at least lessen the weight of their burden. She said it’s a difficult issue to resolve and that progress toward a solution has been slow going.
She said the issue with The Bridgehampton Club doesn’t parallel the Whites, because the club’s taxes are actually to be spread out over hundreds of households.
“It’s not a legal question, it’s a question of what sits well with everyone here,” she said. “We encouraged the members of the club to come forward and share with us how it might affect the well-being of the club. I’m curious to know what the bulk of the members do think about it. The attempt was to make it as equitable as possible for everyone involved, knowing that was going to affect the viability of the project.”
