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The Southampton Town Board last week voted unanimously to rescind a resolution approved in June—also unanimously—that appropriated $500,000, which had been given to the town for historic preservation in 2004 as a condition of the approval for the Sebonack Golf Club development, to fill a hole in the town’s capital fund stemming from the purchase of land in Tuckahoe targeted for a future affordable housing development.
The earlier resolution had drawn scathing criticism from preservationists, board members and town officials in the last two weeks, and some board members said they had not understood what they were approving when the resolution was brought up for a vote last month.
The rescinded resolution will mean the town now has to deduct some $436,000 from the depleted general fund surplus to fill the capital fund gap so the town’s 2009 books can be closed and audited. The gap is part of a $2 million shortfall in the capital fund books created when the Town Board approved two $1 million appropriations from the general fund for the purchase of properties to be used for affordable housing. The purchases were made, but the money was never transferred to the proper account.
The mistake, along with dozens of others like it totaling millions of dollars, was discovered during the town’s forensic audit of the capital fund over the last year.
The Town Board’s reversal on Thursday, July 1, came after outraged members of the architecture community appealed to Councilwoman Nancy Graboski, the only current board member who served when the Sebonack approvals were issued in early 2004, to reverse it, saying the proposed use of the money for affordable housing did not fit the intentions of stipulations placed on that money.
The original resolution was a same-day “walk-on” addition to the Town Board’s June 8 meeting agenda by Supervisor Anna Throne-Holst. Ms. Graboski said this week that she hadn’t recognized the reference to the Sebonack project and the specific intention of the restrictions placed on the money when she cast her original vote in favor of the move. When she was made aware by Planning and Development Administrator Jefferson Murphree later that week, she said, she was shocked.
“I didn’t make the link back to the Sebonack section of the code,” Ms. Graboski said this week after the board voted to rescind the resolution. “Jeff Murphree said to me that he couldn’t believe the board voted 5-0 on that, and that it was wrong, just plain wrong. It kind of jarred me. Then I started hearing from people in the community, and I realized there’s no question that money was to be used for architectural preservation.”
Councilman Christopher Nuzzi, likewise, said the presentation of the June 8 resolution, which board members had not been able to review because it was a last-minute addition to the agenda, made no mention of any covenants on the money being appropriated.
“We were certainly not advised at that meeting that there were restrictions,” the second-term councilman said. “We were advised it was going to be used to pay down debt service, and that it was OK to do so.”
The Sebonack Golf Club was approved by the Town Board as part of a planned development district, or PDD, a zoning tool created in 1999 to help the town change the zone of specific properties if there is a community benefit. The Sebonack project won approvals on the weight of the potential sprawling residential development that could’ve taken place on the 240-acre former Bayberry Land property, a longtime retreat for members of the International Brotherhood of Electrical Workers. Part of the redevelopment of the property included the demolition of the main structure, an early 20th century manor house.
After the demolition provoked outrage from the architecture community and historic preservationists, Sebonack’s developer, Michael Pascucci gave $1 million to the town, $500,000 of which was earmarked for the preservation of historic architecture in the surrounding community.
“When I saw this resolution, I thought, ‘What the hell?’” said Anne Surchin, chairwoman of the Peconic Chapter of the American Institute of Architects, and one of the most vocal opponents of the demolition of the Bayberry Land house. “You had this mitigation payment, put aside to go to architectural preservation, and here they are taking money out of a trust account to pay for the purchase of an affordable housing property. They couldn’t have done their due diligence on this. Where was Anna’s due diligence on this? What could she have been thinking?”
In an interview early last week, before Ms. Graboski introduced the proposal to rescind the resolution, Ms. Throne-Holst said that she and Town Attorney Michael Sordi had reviewed the terms of the Sebonack approvals and determined that wording referring to land purchases allowed the money to be used for any land purchases, as long as they were in the Tuckahoe hamlet. “Mike Sordi’s interpretation of that resolution was that it was fairly broadly written and that it included land purchases, along with a number of other things that, yes, had to do with historic preservation and architecture,” Ms. Throne-Holst said. “It is legally sound.”
This week, Ms. Throne-Holst stood by that initial interpretation, but she acknowledged that it clearly did not match the intention of the PDD stipulations. “We all agree it falls within the language. The permitting speaks to land acquisition,” she said on Friday. “When I went back and looked at the enabling covenant, which predates me, it’s clear that while it is permissible, that certainly was not the intent.”
Ms. Graboski said that the interpretation from Mr. Sordi might be understandable from a strictly legal standpoint, but that using the money for an affordable housing project was not in the spirit of the original intentions.
“I know what the purpose was, and it bothers me that a Town Board down the road construed that in a way that was clearly not the intent,” she said. “It’s a lesson here. Going forward, we need to be very cautious on how we view resolutions that can seem routine.
“The other lesson here is, anytime there is a revenue stream that has to do with one of these PDD projects, the appropriation of that money should go to the Department of Land Management or the Planning Board,” she went on to say. “The town attorney didn’t have the background on this one.”
With the use of the Sebonack money aborted, the town must now find a way to cover the spending it was supposed to resolve.
According to Town Comptroller Tamara Wright, in 2005 the Town Board passed a resolution to appropriate $1 million of general fund surplus for the purchase of four lots totalling 6.5 acres on Magee Street, known as the Katie Press Estate, to be used for affordable housing. In 2006, a similar appropriation was approved for the purchase of 5 acres of land, known as the Margaret Conklin property, also pegged for affordable housing.
In early 2008, the Town Board appropriated another $2 million from the general fund for the town’s affordable housing bank, a specially created account to finance the operation of the affordable housing program and bank money for future land purchases. In 2008 and 2009, approximately $436,000 of that money was spent on the program.
But during the forensic audit of the capital fund in 2009, it was discovered that the original $2 million for the Press and Conklin land purchases was never transferred and was still due to the capital fund.
Ms. Wright said that the town determined that the money in the affordable housing fund could be used to pay for the purchases but that the fund was short the $436,000 already spent on the program.
Ms. Wright said that the $500,000 from the Sebonack project was to be put toward the purchase of the Press property, since it is in Tuckahoe. She said she was told the town attorney had cleared the use of the money.
“We wanted to cover as much of the error as we could within our legal right,” said Ms. Wright, who has overseen the closing of more than 200 capital fund projects in the months since the forensic audit was completed last winter.
The rest of the $1.5 million deficit left in the capital fund could be covered, by Town Board resolution, with the funds remaining in the housing bank, she said, leaving a surplus of $63,676 in the fund.
Ms. Wright said the extra money was going to be put toward the approximately $112,000 Mr. Murphree said is going to be needed for the administration of the housing program in 2010, including $98,000 toward the salaries and benefits of two employees who work on the affordable housing program, including Director of Housing John White. The rest would go to appraisals, legal notices, debris removal and code compliance training for town staff connected to the program.
With the Sebonack money now deleted from the equation, Ms. Wright said the money will have to come from the town’s general fund surplus. After appropriating more than $1 million to fill other gaps in the capital accounts, the fund surplus is estimated as $10 million.
on Jul 7, 2010