Iconic Lobster Inn Is Sold, Condos Could Be Future

The venerable Lobster Inn restaurant, a mainstay of the local scene for more than four decades, and some 10 acres of property surrounding it have been sold by longtime owner Skip Tollefsen.

The new owners plan to develop residences on the property but expect to lease out the popular restaurant building for the coming summer, or summers, while the plan negotiates various regulatory reviews.

The new owners have been identified only as a pair of limited liability corporations, Peconic Bay Marina LLC and Peconic Bay Residences LLC. No principals are listed for the companies with New York State, and Tim McCulley, an attorney with the firm Burke and Sullivan, and who is representing the buyers, would not identify the principals by name.

Reached at his winter home in Florida this week, Mr. Tollefsen, who opened the Lobster Inn in 1969, said he was not sure of their complete plans but said the new owners had been discussing a “green” development of energy-efficient homes.

The zoning on the property would allow for 13 single-family homes. Mr. McCulley said that the new owners have not settled on the extent or style of development they plan to pursue at the property, which was given a variance from local zoning to allow up to 25 condominium units. Mr. McCulley said that all options are on the table.

In 2009, Mr. Tollefsen was given approval by the Southampton Town Zoning Board of Appeals to build 25 beach cottage-style condominium units on the land. Suffolk County Department of Health development codes, however, would limit the number that can be developed without the installation of a sewage treatment system to the 13 units the underlying zoning otherwise allows. Attorney Wayne Bruyn, who represented Mr. Tollefsen’s application to the Zoning Board said there are considerations for condo units depending on their size that could allow for more than 13 units without any special septic system considerations.

The property also was once approved as a Planned Development District in the 1990s, a proposal that would have allowed Mr. Tollefsen to set up a garden center and retail farm stand on the vacant parcel across from the restaurant. But in the late 1990s, Suffolk County removed a stoplight from the intersection of County Road 39 and North Road and banned left turns onto the highway from Inlet Road East, the road leading to the Lobster Inn—which Mr. Bruyn said effectively killed any hope of the property being a successful destination business.

“Once they cut me off from the highway, my business went down 30 percent. Friday night, forget it—nobody was coming off the highway like they did,” Mr. Tollefsen said. “I felt a little bad that the town didn’t go to bat for me on the left turn thing at all.”

The listed selling price of the property was a little more than $2 million, though Mr. Tollefsen said that was not the full sale price. The price, he said, was based on the development of only the 13 units that the Health Department initially would allow on the property. Mr. Tollefsen said he will receive another payment from the new owners in three years, but he declined to offer specifics.

“I’m happy—it was my time to go,” said Mr. Tollefsen, who had been trying to sell since 2006, when the changes to Sunrise Highway were made. “I used to go to work every day, work at night too, have fun and make money. Now, it seemed like I was there all day, had no fun and made no money. But I had a good run.”