The long neglected building and property in the center of Sag Harbor Village known as the Bulova Watchcase Factory is intrinsically linked to Sag Harbor’s industrial heritage. For years now, village residents have been left wondering whether a village-approved luxury condominium project would eventually replace the crumbling factory.
This week, residents finally have that answer.
Three years after it was initially approved for a 65-unit luxury condominium project on the parcel, Cape Advisors announced this week it has closed a financing deal with Deutsche Bank, its new partner in the Bulova project.
The deal was struck last Thursday, according to Cape Advisors project manager David Kronman.
In a press release issued on Wednesday afternoon, Cape Advisors and the Deutsche Bank Commercial Real Estate Group announced it has closed on a $60 million investment “to fully fund the development and rehabilitation of the Watchcase Factory Lofts” in Sag Harbor.
Calling the former factory building “a majestic red brick, nineteenth century industrial building,” located on 2.3 acres in the heart of Sag Harbor, the firms said they believe the “vast interior spaces and original architectural details will create a dramatic and unique residential environment.”
“We are extremely pleased that in these difficult economic times we were able to partner with Deutsche Bank in moving forward with this exciting project,” said Craig Wood, co-managing partner of Cape Advisors. “This fall, over 30 years after the Bulova Watchcase Factory closed, we will begin construction to restore this historic building and fully integrate it into the fabric of the Sag Harbor community.”
Kronman said he expects his firm will pull a building permit from the Village of Sag Harbor’s Building Department sometime this week. Ground will be broken on the Bulova project sometime in the next 30 to 60 days, he added. Once construction has begun on the property, the project is expected to take between 18 and 24 months.
“We are obviously really excited,” said Kronman on Tuesday. “We think it is a testament to the project and to Sag Harbor that despite the rough economic climate we were able to secure the financing to get the project built. It speaks to the viability of the project and the faith that exists in the Sag Harbor market.”
“Certainly, I am glad to see this move forward,” said Sag Harbor Mayor Brian Gilbride. “I wish them the best and I cannot wait to see this get started.”
The Bulova Watchcase Factory restoration and redevelopment is for a 65 unit luxury apartment building in the historic factory building and seven townhouses, which will contain 16 of the units. A recreation center, with indoor pool, spa and an underground parking facility is also planned for the project.
The factory building, which for 100 years operated as the industrial heart of the village under a number of company banners until its doors were closed in the early 1980s, has long remained dormant. The property, located at Division and Church streets, is a state Superfund site. Remediation is ongoing and required for the apartment project to move forward.
Developers have tried over the years to re-develop the property, without success, until Cape Advisors came along over four years ago.
The firm embarked on a two-year approval process for their plans — easily the largest re-development project in Sag Harbor Village history. What quickly emerged as the central issue during the review was whether or not the developers would include affordable housing on-site as per a requirement of the Suffolk County Planning Commission
Eventually, after much debate, the village planning and zoning board of appeals agreed to overrule the planning commission and accept $2.5 million from Cape Advisors to be funneled into the Sag Harbor Community Housing Trust.
In a deal reached last month with the village planning board, the affordable housing payment schedule was changed, allowing Cape Advisors to pay into the fund as sales of the units are closed. However, the village will be allowed to accrue interest on a first $582,600 once Cape Advisors secures its building permit.
In addition to affordable housing, the village was criticized and later sued over its environmental review of the Bulova project. While that case was eventually dismissed on a technicality, during the review process and ensuing litigation, the economy tanked worldwide and a housing crisis emerged. Despite continued pledges of support for the Bulova project by Cape Advisors, the Bulova building remained shrouded in scaffolding as two years passed.
All of that will change this fall.
“I am happy and I hope that this project brings life back to that building,” said Mayor Gilbride. “I am also glad in that while construction is happening at Bulova, it will be helpful to our delis, our restaurants, our shops, and the entire village’s economy. So we got a lot of good news this week.”