Tag Archive | "Watchcase"

Expecting a Tax Windfall? Guess Again.

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Southampton Town assessors have valued the Bulova Watchcase property at $38.5 million, and it’s expected to drop. Photo by Michael Heller. 

By Stephen J. Kotz

As the Watchcase condominiums continue to take shape, transforming the once derelict Bulova building on Division Street in Sag Harbor into luxury housing, one might think the village’s tax base will be getting a huge boost soon.

And why not, with its 63 units being offered at prices ranging from $1 million for a small apartment to more than $10 million for one of its fourth-floor penthouses. So, when the last dab of touch-up paint is applied to the last piece of trim, will the development add $100 million, $150 million, or maybe even $200 million to the village’s $2.01 billion tax base?

Try $46 million—the amount the construction site was valued at the end of 2014—and dropping.

The preliminary assessment for 2015 has already reduced the property’s value to $38.5 million, and Southampton Assessor Lisa Goree expects the value to drop even more, to something closer to $31 million or $32 million, once all the units are sold.

“Because they are condos, they are not valued the same as residential property,” she said. “I know these units are selling for millions of dollars. However, real property law says we have to assess them as income property—what they would rent for.”

Assuming the village’s tax rate remains unchanged at about $2.79 per $1,000 of assessed valuation, the Watchcase property will add only about $107,000 to the village’s coffers this year.  Similarly, at last year’s tax rate of $5.22, the development would pay about $201,000 in school taxes. Those amounts could be tripled, or even quadrupled, if the units were assessed the same way a single-family home across the street is.

“A lot of people thought it was going to be a cash cow for us—and the school district,” said Sag Harbor Village Trustee Ed Deyermond. “But it’s not.”

And Mr. Deyermond should know. He served as an assessor in East Hampton Town for years before moving to Southampton Town, where he oversaw a townwide reassessment, and served as assessor for 16 years in two separate stints.

The fly in the ointment is Chapter 581 of the New York State Real Property Law, he said.

“If you have a one-to-three-family home, it is valued using the market approach,” Mr. Deyermond said. “So if it sells for $1 million, at full assessment, you should be assessed at or near $1 million.”

But the state law requires that assessors apply a different rule of thumb to condominiums, cooperatives, townhouses,  and other similar property. “The income approach mandates—and courts have consistently upheld this—that you have to consider what those units would rent for, for the month, the year, in season and out of season,” he said.

The formula allows a condo owner to further reduce his assessment by deducting expenses for insurance, maintenance and repairs. Furthermore, it factors in the cost to the owner of tying up his money in the investment, which would typically reduce the value even more.

The same formula is applied to other condos in the village, including the Harbor Close condos on Long Island Avenue and the Villas and new Harbor’s Edge condos on West Water Street.

Don’t expect things to change soon, said State Assemblyman Fred W. Thiele Jr. “There have been efforts to change the law, but they have never gotten off the ground,” he said. “Historically, the real estate lobby has lobbied really hard to keep it this way.”

Mr. Deyermond said he realizes the town’s hands were tied in how it ultimately assessed the property, but he questioned whether it could have phased in the change, from when the property was valued as a single commercial development owned by Cape Advisors to when it was divvied up into condo units last year.

“We argued that it could have been done over two to four years—until all the units are sold,” Mr. Deyermond said.

Not so, said Ms. Goree. “Once developer submits its condo plan to the state attorney general’s office and a percentage of them sell, we have to make the switch,” she said.

The $38.5 million valuation she came up with was a third higher than the amount the developer’s appraiser submitted, about $26 million, she said.

Cee Scott Brown, a broker with Corcoran Real Estate, who represents Watchcase, said this week that 72 percent of the units have been sold and he expects the rest to go fairly quickly, as the weather improves and construction nears an end.

“It has been a huge financial headache,” Mr. Deyermond said of the development, saying that construction work has left Washington, Church, and Sage Streets in serious disrepair.

But David Kronman, a partner in Cape Advisors, said the developers would repair any damage construction work caused to neighboring streets, and he pointed out that the developers had nothing to say about how the property was valued.

“I don’t think the project was approved because it would bring a windfall of tax revenue to the village,” he said. “The project was approved because it was reasonable and sensitive. We’re saving a historic building that was falling apart for years.”


Interior Designers Dress Up Watchcase Condos for Charity

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A view of the interior of one of the apartments in the Watchcase development in the former Bulova factory. Michael Heller

By Stephen J. Kotz

Sag Harbor’s past and future crossed paths Saturday when the doors of the old Bulova watchcase factory—once the cornerstone of the village’s economy and now being transformed into luxury condos—were thrown open for a coming out party.

For the occasion,  a “white carpet” was painted on the courtyard, where workers once filed to their stations in the massive brick factory, but where on this nearly perfect summer  evening, men and women, most of them dressed in white according to the theme, arrived for the second annual Holiday House Hampton to benefit the Breast Cancer Research Foundation.

The event was sponsored by HC&G magazine, and three of the units had been decorated by teams of interior designers and opened to the public for the first time. They will remain open daily through August 10 as part of the fundraising effort.

Interior designer Iris Dankner, the co-chairwoman of the event, and a breast cancer survivor, welcomed members of the press to a preview party, with a call for early detection.

Craig Wood, a co-managing partner of Cape Advisors, the developer who bought the property in 2006, weathered the financial crisis of 2008, and finally broke ground on the project in 2011, said he was breathing easier these days. He said he expected the project to be completed, “except for punch list stuff,” allowing the first tenants to move into apartments ranging in price from $1 million to $10 million by the end of the year.

While it will have taken only about three and a half years to turn the once derelict building into a residential showcase,  designers also worked at a breakneck pace to prepare their spaces for Saturday’s opening party. The phrase,  “You should have seen this place three weeks ago,” could be heard in room after room.

The units selected for the unveiling were a two-bedroom apartment in the renovated main building, one of 46 units in that part of the development, and two units from the newly constructed townhouse portion of the site, including a three-story townhouse and a one-story bungalow.

In the two-bedroom apartment, which looked out over Washington and Church streets, massive beams, cut from old growth yellow pine forests when the building was built 130 years ago, were left exposed, as were portions of the brick walls and arched windows, which lined both sides of the building. In all the units, rough hewn oak kitchen cabinets and Thermador stainless steel appliances continued the post-industrial theme. The space included a large terrace overlooking the courtyard. A second terrace will overlook—once it is completed—a pool and lounge area. A third looked out over Washington Street.

James Huniford of Huniford Design Studio handled the main portion of the factory unit, with bedrooms designed by Campion Platt and Tamara Magel. The main terrace was designed by Milly de Cabrol and Ani Antreasyan, who told those who stopped at their site that they sought to evoke a European garden, with olive trees, a potting table, and terra cots pots.

Ms. Dankner’s ID Creations oversaw the decoration of the main living and dining area of the bungalow, with Jen Going Interiors handling the master bedroom and Eugenia Au Kim of the Design Studio decorating front and rear terraces.

Nine different designers plied their trade in the three-story townhouse. Bjornen Design decorated a second floor bedroom; Brady Design, the master bedroom; Dale Cohen Design Studio, the terrace; Elizabeth Dow Home, a second floor study; Elsa Soyers Interior Design, a bedroom; Scott Formby, a ground level lounge; Studio MRS, a dressing room; West Chin Architects and Interior Design, the main living and dining space, and Vincente Wolf,  a tent next to the house with outdoor furnishings.

The Watchcase will be open from 11 a.m. to 5 p.m. daily through August 10. Tickets are $35 and can be purchased by visiting www.holidayhousehamptons.com.

Townhouses Rise at Watchcase

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By Kathryn G. Menu

About a month ago, Church and Sage streets in Sag Harbor began evolving in a way that will change their streetscapes forever, as the construction of nine luxury townhouses began to take shape, connected to what is arguably the largest construction project in village history.

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While construction at the former Bulova Watchcase Factory has largely been focused on the restoration of the historic factory building, which is being converted into 47 luxury condominiums, the framing of the townhouses over the course of the last month has highlighted their role in the development of a once forsaken property into a luxury development coined Watchcase featuring multi-million condominiums.

Currently, much of the framing in the first four homes is close to finished along Sage Street, said David Kronman, a partner with Cape Advisors who has helped oversee the project since its infancy. Once those are close to being completely framed out, development will begin along Church Street.


The townhouses, which were designed by Beyer Blinder Belle Architects and project architect Baldassano Architecture, are based on a variety of architectural styles found in Sag Harbor during the 18th and 19th centuries. The townhouses alone will host 17 units, a house unit in each facing the street and eight bungalow units facing the interior gardens of the Watchcase property.

“The house designs are not reproductions of architecture from any specific period, but they employ a variety of vernacular building elements that touch on architecture throughout the village’s history,” said Kronman.

While drawing on historic elements may be what Cape Advisors hopes will allow the townhouses to retain an authentic, Sag Harbor aesthetic, the interiors — designed by Steven Gambrel who is responsible for interior design throughout the whole of the project — will be outfitted with modern luxury in mind, said Kronman, with high ceilings and modern amenities as well as direct accessibility to concierge services, a fitness center and spa.

“This may be for someone who is looking for a Sag Harbor home in the historic district and walking distance to the village, but one that offers turn key living, a maintenance free lifestyle,” he added.

The house units will vary from four to six bedrooms and 3,000 to 4,800 square feet, while the bungalow units will range from 1,000 to 1,350 square feet and will feature one to two bedrooms. They will feature terraces and garden patios, but also access to the heated saltwater pool and an underground parking garage, which will provide parking for all residents within the Watchcase development.

The units — bungalow and house units — will range in price from $800,000 to over $6 million.

According to Arthur Blee, director of design and construction for Cape Advisors, the firm hopes to have the entire project completed by Memorial Day of 2014, but the exteriors of the townhouses should be completed by the end of this summer.

While the framing lining Sage Street is impossible to ignore — that section of street long inhabited by concrete and fencing around the rear of the aging factory building — Blee said it will only be when the windows, siding and shingles are added that the true character of the streetscape will emerge.

“The design breaks up the façade on the street,” said Kronman.

In other news out of the Watchcase project, on Tuesday night, the Sag Harbor Village Board of Trustees agreed to issue a building permit for the Watchcase Factory Development and waive the additional $206,575 fee.

According to a resolution drafted by village attorney Fred W. Thiele, Jr., this is a renewal of the original building permit, which expired in April.

On Tuesday, Thiele said when the village sets a fee it is meant to simply cover the cost of administrative services needed to cover village operations as it related to that specific project. When these fees are viewed as a revenue source, Thiele noted that becomes more of a tax on an applicant, which is illegal.

“In this case, the fee was already collected is more than sufficient,” said Thiele, who noted he had already met with building inspector Tim Platt to discuss the matter.