By Kathryn G. Menu
When Greg Ferraris was a child, many storefronts in Sag Harbor were boarded shut. Economic activity was scarce beyond the day-to-day needs of the local community, and residents were less worried about what businesses would come to Sag Harbor than those that would not.
Throughout his life Ferraris watched as the village transformed, anchor stores taking root and art galleries popping up right and left, creating a vibrant, but local business community that was the envy of surrounding towns.
A certified public accountant with Banducci, Katz & Ferraris, Ferraris said in an interview last week that Sag Harbor’s downtown evolved based on what the residents and second homeowners — the market — needed. He added that as things continue to grow, the village will continue on that track.
“I love Sag Harbor the way it was 20 years ago,” said Ferraris. “I love what the village is today. It will constantly adapt. The Village of Sag Harbor is not Disneyland. We can’t control everything, and some changes will be for the better, some will be for the worse.”
For a community that is so protective of its identity, change has not always been embraced by the people of Sag Harbor.
In 2007, with CVS Pharmacy looking to take over a large building on Long Island Avenue, the Village of Sag Harbor set about revamping what was considered an antiquated zoning code to handle the changes looming over Sag Harbor.
Led by then Mayor Ferraris, former Deputy Mayor Tiffany Scarlato, former village attorney Anthony Tohill and environmental planning consultant Rich Warren, the new code aimed to keep Sag Harbor’s downtown the vibrant, unique, walking village it had become.
“We looked at exactly what Sag Harbor was — the demographics, the sizes of stores, the types of stores — and we wanted to ensure what existed then would exist 20 years down the road,” said Ferraris. “Different types of industries and uses could be adapted through the new code, but we wanted to ensure we were not going to have large box stores or one retail store come in and buy four or five businesses and combine them. We wanted to maintain a diversity of uses.”
In 2009, the village enacted its new zoning code.
According to village attorney Denise Schoen, some of the major changes involved preventing office uses on the ground floor in the village business district in an effort to promote retail uses. It also limited the expansion of stores to a maximum of 3,000 square-feet, with the exception of grocery stores, hardware stores or home furnishing outlets, which can petition the village to become larger. The table of uses — definitions of the kinds of stores in Sag Harbor — was also expanded to give the village more oversight on potentially damaging changes to the downtown.
A small office district was also created around the periphery of the village business district to provide a place for new office space.
Offices that already existed on first floors in 2009, as well as businesses above 3,000 square-feet, are considered pre-existing, non-conforming to the code. If they change uses, however, they would have to go before the village boards for approval.
The new code also streamlined the planning process for minor changes happening on Main Street.
Because Sag Harbor Village’s business district is in a historic district, the code also gave sweeping powers to the historic preservation and architectural review board (ARB) to ensure any visible changes were consistent with the overall character of the village.
The code was ultimately supported by much of the business community, as well as Save Sag Harbor — a not-for-profit organization that developed out of concern that large, formula businesses may come into Sag Harbor. However, three years later, as economics have begun to threaten some local businesses, Save Sag Harbor director Susan Mead last week said it might be worthwhile for the village to take a second look at the code.
“But the code revisions the village enacted were very well thought out,” said Mead. “Taking a second look at the code is probably of less importance than taking a look at a Main Street program, the kind that has been used across the country for 30 years.”
Mead said Save Sag Harbor, for its part, would explore creation of a revolving fund dedicated to helping local business thrive, and would possibly consider purchasing key Main Street real estate spaces. It is also looking at Main Street program models and may bring experts into the village for a community conversation.
“Ultimately it will come down to whether or not the general populace of Sag Harbor truly wants it to remain a unique village,” said Mead, “because for this to work it is going to take a lot of private dollars.”
Sag Harbor Village is not alone in its quest to maintain a vibrant business district, and many communities throughout the country have relied on similar ordinances and not-for-profit initiatives to protect their downtowns.
According to Andrea Dono with the National Trust’s Main Street Center in Washington, D.C. commercial district gentrification is when an economy changes and businesses become priced out of a market. What commonly happens, said Dono, is a commercial district suffers from vacant storefronts while landlords seek out businesses that can afford the higher cost of doing business.
“The smartest thing to do is to get property owners to understand that having a sustainable, stable and long-term tenant is a good tenant to have,” said Dono.
In Sag Harbor’s case, Dono said a Main Street program would probably focus on business retention, working with landlords, business owners and the community to make business stronger and more marketable. That way, when rent does rise, as it should in a strong economy, the businesses are able to afford the increases.
In order to start this kind of program, Dono said a market analysis is performed to determine who is using the downtown. It also seeks to discover if businesses are meeting consumer demand and what the overall competitive advantage the business district has over neighboring downtowns.
“Some of our more advanced programs have gotten into becoming non-profit real estate developers, which is excellent,” said Dono. “They develop economic development plans that determine what businesses are important to keep in a community, and what businesses are needed, so you have a clear idea of who you want to rent or sell a property to.”
Often, not-for-profit revolving funds are found in communities that need downtown revitalization.
In Galveston, Texas, the Galveston Historical Foundation created a revolving fund in the 1970s to save what executive director Dwayne Jones called “a declining, and pretty dead, business district.”
According to Jones, the foundation bought buildings in Galveston’s 12-block historic district, restored them and resold them to sensitive developers. Properties were generally sold with deed restrictions, he added, to ensure facades remained in keeping with Galveston’s historic aesthetic.
A case study closer to Sag Harbor Village is Nantucket, Massachusetts.
In Nantucket, the preservation of Main Street has come through a combination of planning and zoning ordinances as well as the work of a not-for-profit group, ReMain Nantucket.
ReMain Nantucket is a philanthropic organization established by Wendy Schmidt, president of the Schmidt Family Foundation, which, according to the organization’s charter, is “dedicated to strengthening the lasting economic, environmental, and social vitality of downtown Nantucket, while preserving its unique character and spirit.”
Focused on looking at transportation solutions, analyzing the downtown and its needs, addressing infrastructure and promoting and encouraging Nantucket’s historic ties to its waterfront, ReMain has also taken on development projects.
In 2007, it purchased Mitchell’s Book Corner in an effort to preserve a decades-old business and re-leased the property to Mary Jennings, a longtime employee of the store. ReMain also established a public-private partnership with the Nantucket Community School to bring adult education to Nantucket’s downtown.
Another not-for-profit, The Nantucket Dreamland Foundation, came together to save a local movie theatre, the Dreamland Theater. The foundation is dedicated to using the theatre space to show films year-round, as well as educational programs, and to showcase performing arts.
However, the work in Nantucket is not just limited to ReMain’s efforts. The Town of Nantucket has historically been committed to preservation, said Nantucket Planning Director Andrew Vorce. In the 1930s, Nantucket received one of the earliest historic district designations in the country, but in recent years the town has also worked to enact zoning provisions that protect the town’s character.
Zoning was first established in Nantucket in 1972, but Vorce said the building standards did not conform to what historically existed on Main Street. In 2003, the code was amended to reduce those standards so that every business owner was not sent to the zoning board of appeals for every application.
In 2006, Vorce said the town adopted a formula business exclusion district around Nantucket’s downtown. Vorce said that in Nantucket the law passed and was upheld in court because there are commercial areas outside of the historic downtown where chain stores are allowed, formula businesses could not argue that they were being kept entirely out of Nantucket.
“We wanted to focus on protecting the critical area and make sure there are other places for chain stores to go,” said Vorce.
According to the legislation, a formula business in Nantucket is defined as a type of retail sales establishment, restaurant, tavern, bar, or take-out food establishment that has 14 of its kind worldwide. It also has two features the town identified as being standard in a formula business, like trademark phrases, signs, standardized menus or uniforms and standardized design concepts.
Vorce noted that if a national chain created a non-standardized version of its store, they could be permitted into the historic business district.
Vorce said the decision to implement the legislation came after Nantucket residents watched as the downtown became geared toward luxury items. A Ralph Lauren store moving into an old weaver’s shop that had long supported local artisans was one of the canaries in the coal mine that led the town to look towards formula business restrictions.
According to former planning director John Pagini, the town also has been committed to regional transit and has also focused on affordable housing initiatives.
Vorce said the work of ReMain has been critical to preserving uses in the downtown that could not have survived the economics of Nantucket. Outside of the book store, Vorce said ReMain has also subsidized a music school and bakery in Nantucket.
“From a planning perspective, you want that mix of business in a downtown,” said Vorce. “It has been a wonderful gift.”
That being said, as Pagini noted, to a certain extent change is inevitable.
“It is something Nantucket has struggled with, but the market has determined what the character of uses are in the downtown, less so our zoning,” said Pagini. “Zoning and architectural controls preserve the façade, but it is the free market we are doing this under.”
Breckenridge, Colorado, perched in the mountains above Denver, faced another issue that planners in Sag Harbor Village tried to circumvent in the 2009 code revision — real estate offices dominating a downtown, taking away from the walk-ability of a village.
“We were really unhappy with how many real estate offices were occupying prime real estate in the downtown,” said Peter Grosshuesch, the manager of the town’s community development department.
Unlike Sag Harbor, Breckenridge was unsuccessful in banning offices on first floors. Grosshuesch said the town was eventually successful in prohibiting residential first floors in the downtown unless they met a 40-foot setback to the street. The town also brought in retailing experts and focused on the curb appeal of storefronts and the downtown in general.
As for formula businesses, while they are not outlawed in Breckenridge, Grosshuesch said they are not exactly welcomed with open arms.
“It’s not a written policy, but the town council has never lifted a finger to help a national chain come in,” he said. “But there are some national chains, so it is not as if we are pure as the driven snow.”
While a Main Street program is possible in Sag Harbor Village, whether or not formula based restrictions will apply is unclear.
John Nolan, a Pace Law School professor said that zoning requirements have to further the public health, safety and welfare of a community in a specific way. It could be argued that it would be difficult to tie a formula business restriction to furthering the public health, safety and welfare of a village, he said.
“It cannot be done to thwart competition,” said Nolan. “If the objective is to keep local businesses in operation, that is different because you cannot use zoning to protect businesses from competition.”
Nolan did say if a municipality could show why public health, safety and welfare is tied to a formula business restriction, it could be successful.
Nolan said communities enacting this kind of regulation have to be wary of federal protection of interstate commerce, prohibiting local municipalities from enacting legislation that threatens interstate commerce.
According to planner Bill Spikowski, of Spikowski Planning Associates in Fort Meyers, Florida, the Village of Sag Harbor has already gone a long way in terms of its zoning code to protect its downtown.
Spikowski is an expert in form-based codes, which unlike the traditional Euclidian zoning, focuses on regulating the physical forms in a downtown to control development rather than try to control development by regulating uses.
“You want small spaces, you want them near the street, and you want parking on the street or behind a downtown,” said Spikowski.
Limiting the size of stores and having strict historic district design standards have traditionally kept out a lot of formula businesses, said Spikowski.
“Those are the things I would recommend if your village was not already doing it, so you may be in pretty good shape,” said Spikowski.
“I think it went far enough,” said Ferraris of Sag Harbor’s new zoning code. “It doesn’t place restrictions on property owners where they cannot use that property as an economic resource, but by limiting square footages you basically guarantee you will have these smaller shops in the future which in turn will restrict the possibility of national chains coming into Sag Harbor. That being said, there probably are spaces on Main Street that are enticing to a national retailer and if that should happen, it will happen.”
“I would say in my mind I consider the code a work in progress,” said current mayor Brian Gilbride. “To me, on Main Street, I can remember Ann Schiavoni being in Schiavoni’s Market, Marty’s Barbershop being where the produce area is now. I remember the Five and Dime when Mr. Hansen was there, and the Sag Harbor Pharmacy as a kid. So is Sag Harbor, changing? Yeah, but I believe Sag Harbor has survived.”