The Condos of Sag Harbor – Game Changers?

Posted on 17 February 2014

Heller_Bulova Watchcase Factory Renovation 1-15-14_6440

By Peter Boody

It’s hard to imagine any one thing that could have a bigger impact on cozy, compact and historic Sag Harbor than the completion, sale and occupancy of more than 80 luxury dwellings in the heart of the village all within the same year.

That’s what may happen beginning late this summer, when the first occupants are expected to move in at the old Bulova Watchcase Factory — built in 1881, closed in 1980, and long a hulking ruin of crumbling brick, gaping windows, rotting trim and a weed-choked parking lot one block east of Main Street.

“I don’t know how much it will change the village,” Sag Harbor Planning Board member Nat Brown said of the project, but “I have a feeling a lot of the people purchasing in there won’t be like regular village people.”

Some village residents are chafing at the Watchcase project, complaining that its massive scale threatens the character of the community. In a prepared a statement for this story, officials of the local group Save Sag Harbor wrote in an email that they believe “we are all custodians of a very special place and that our best defense in maintaining the scale and character of the village we love is to have strong village boards which enforce our hard-won zoning code by keeping variances to an absolute minimum.

“Our volunteer boards are committed to the village but they are up against well-funded corporations and individuals who are driving development with increasingly complex projects. The overriding challenge to our community and our boards is to discern and act upon threats to the village fabric before design plans become reality.”

For the record, when the Watchcase condominiums were being reviewed by village boards, in 2008 the project earned the endorsement of the Save Sag Harbor board of directors.

When its $40-million renaissance is completed beginning late this summer, the restored, partly reconstructed brick factory building will contain 47 loft apartments with high ceilings and exposed Southern yellow pine beams and 17 units in new, detached frame buildings now under construction along Sage and Church streets.

In the factory, units range from studios containing about 575 square feet to a three-bedroom penthouse containing 3,297 square feet. Prices range from $400,000 to $10.2 million. In the detached townhouses, the smallest one-bedroom bungalow contains 1,074 square feet and the largest unit contains five bedrooms and 4,834 square feet. Townhouse prices range from $3.49 million to $6.5 million.

As of late January, 32 of the 64 units were under contract, with closings expected to begin late this summer, according to Gordon Hoppe of Corcoran Sunshine in New York, which is handling the marketing for developer Cape Advisors.

Just a few blocks to the west, on the other side of Main Street, residents also could be moving in this year to the long-stalled West Water Street condo project. Construction of the 15- to 19-unit building with a top-floor pool and views of Sag Harbor Cove is expected to wind up this spring after a long delay following the initial developer’s bankruptcy filing.

When last listed more than two years ago, one of the West Water Street units was priced at more than $3 million.

The contractor, Roy L. Wines IV of RLW4 Construction in Southampton, identified Joe LoMonaco as the new developer. Mr. Wines said that it was too early for Mr. LoMonaco to discuss the timetable for finishing the project or to begin marketing. Mr. LoMonaco is an official of Amalgamated Bank, the initial lender, which acquired title to the project last year through bankruptcy proceedings involving the original developers, East End Ventures, for $27 million.

Although neighbors are glad a noisy nightclub that once operated on the same site is long gone, some have been unhappy about the condo project, calling it aesthetically inappropriate and out of scale.

There’s no doubt both condo projects are having aesthetic impacts. But will the addition to the local housing stock of about 80 luxury condo units just off Main Street add new heat to the Sag Harbor real estate market? Will they significantly affect the tax base or the village budget? Perhaps most important for some worried residents, will these projects change the look, feel and fabric of a unique, one-of-a-kind village?

Nat Brown of the planning board, who has been working as the board’s liaison between concerned residents and Cape Advisors, said he had favored the project because it removes an eyesore that might have cost the village a lot of money to clean up one day.

But he predicted an increase in traffic and pain for local business owners if their landlords, expecting a long-term surge in well-heeled shoppers, hold out for ever-higher rents.

Mr. Brown also said he worried about an increased demand for municipal services, especially if the infrastructure of the business district east of Division Street has to be upgraded in coming years because of commercial growth and expansion there.

With Watchcase condos ranging in price from more than $1 million for a ground-floor one-bedroom garden loft to more than $10 million for the most luxurious penthouse, and monthly maintenance fees running from close to $1,000 to $3,000, “People are not going to spend that kind of money and not start demanding other services,” Mr. Brown said.

Assemblyman Fred W. Thiele Jr., a Sag Harbor native who is a former Southampton Town supervisor, South Fork county legislator and Sag Harbor village attorney, doesn’t agree.

“I don’t see it having any significant adverse impact to the character of the community,” he said of the Watchcase project. “I think the people developing this project are high quality developers who have done excellent projects in other communities.” The project is “something that is consistent with the character of the village,” he said.

As for the kind of people it draws to the village. “I don’t think its going to change,” he said. “I mean, those people are here already … I mean it’s not as if suddenly a whole new demographic that Sag Harbor has never seen before is going to show up in the village and we’re going to suddenly be looking at them and saying who are those people.”

Of the kind of people drawn to the Watchcase project, former mayor and current planning board member Greg Ferraris said, “A normal evolution would bring this to Sag Harbor.”

“We see it not only in the condos,” he added, “but in the redevelopment of existing historic homes in the village [and] in the purchase of several residences on adjacent lots that people are making into family compounds. We’ve seen three or four of those over the last two years, so I believe Sag Harbor has definitely attracted a wealthier demographic.”

Neither Mr. Thiele nor Mr. Ferraris said the new condos would significantly increase the demand for municipal services or infrastructure. Both noted residents won’t be likely to add to the local school population.

Nor would the condos cause a dramatic rise in the village’s overall assessed valuation, they agreed to some extent. Both noted that state tax law bars municipalities from assessing condominium units on the basis of their market values. Instead, they must be treated as commercial properties with their assessments based on potential revenues.

“We really wont see any increase in tax revenues as a result,” Mr. Ferraris said.

Mr. Thiele predicted there will be a “substantial increase in the tax base but, generally speaking, condos get assessed at lower values based on the income method.”

Neither the Watchcase project nor the smaller West Water Street condos will have a dramatic effect on the local real estate market, Mr. Thiele argued. “One project isn’t going to change the entire dynamics of the real estate market,” he said. “It’s not nearly as important as what’s going on in the overall economy or what interest rates are at any given point in time.”

The developers and their agents say that the Watchcase project won’t draw a lot of people who aren’t already here.

There always have been wealthy people who want a carefree but luxurious place to stay in the Hamptons, said Gordon Hoppe of Corcoran Sunshine. They’re called renters. “They just want to lock the door and leave. So we knew that was going to be one of the pulls” of the project.

He declined to identify any individual buyers. There have been “international buyers, people with place in Cannes, Majorca, Aspen,” and “some are people from the boating community.” There also have been “people who own houses, people of all ages who just don’t want to deal with the house anymore.”

“I think there’s really two categories” of buyers, said Cape Advisor partner David Kronman: one is “people who have spent time in the Hamptons but never would consider buying a place because they just don’t want the brain damage of buying a home.” Now the Watchcase project allows them to own a place with all the luxuries they want — not to mention the proximity of a charming and historic community — “in a kind of maintenance worry-free way.”

The second group includes owners of large homes who “are either getting ready to downsize, or they just don’t want to deal with the headaches of homeownership any more. And they like the idea of being able to walk out of their front door and go get a cup of coffee or go to the Bay Street Theatre or go see a movie and not have to worry about constantly getting in the car to go do anything.”

“It’s going to be a mixed demographic age-wise,” he said, including “people that do have roots out east and in Sag Harbor, and it’s certainly not going to be … all finance and Wall Street people. That’s definitely not what we’ve seen. We’ve seen a lot of people involved in the arts, in theatre and in culture that have bought units there. And I think that will only help Sag Harbor.”

 

 

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2 Responses to “The Condos of Sag Harbor – Game Changers?”

  1. rita says:

    I just don’t know how this renovation was approved, and the additional town houses are an eye sore. It’s such a shame.

  2. Dan says:

    A City a Town or a Village all need to maximize its core area with vibrant shops stores and residential buildings. The WatchCase Development is a welcome change from what was there. Instead of the ruins of early 20th Century industrialization we will now have a rebirth with modern Sag Harbor architecture. What once was just pure blight and neglect will be residences for a new generation of Sag Harbor residents. Moving forward is always better than complaining or standing still.


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