Sag Harbor Seeks Federal Disaster Help

Cost of fire not yet known; entire village feels sting
On Dec. 21, Suffolk County Legislator Bridget Fleming, County Executive Steve Bellone, and Sag Harbor Village Mayor Sandra Schroeder stopped at the site of the demolished buildings during an outing to encourage people to shop locally after the fire. Durell Godfrey

In the two weeks since a fire ripped through Sag Harbor’s Main Street, destroying buildings and businesses at the height of the Christmas shopping season, officials have been working hard to find ways to recoup the financial losses caused by the fire and understand its lingering economic impacts.

The total of the damage has not been estimated yet, as the devastation is still being assessed, said Beth M. Kamper, the village clerk-administrator. However, it will be a significant figure, according to Assemblyman Fred W. Thiele Jr., who anticipates a long recovery. He estimated that at least 50 businesses on Main and Washington Streets suffered a direct financial loss due to street closures, lost parking space, and blocked access.

A Sag Harbor native who recently served as the village attorney, Mr. Thiele, along with State Senator Kenneth P. LaValle, petitioned New York State Gov. Andrew M. Cuomo to sign a disaster declaration to give village business and building owners access to low-interest loans through the United States Small Business Administration’s Disaster Recovery program.

The threshold for eligibility is 25 businesses, Mr. Thiele said Tuesday. Financial losses include loss of sales and damage not covered by insurance, among other things. Officials have been in contact with most of the businesses, he said, and are trying to gather information on their losses. “I don’t think it’s guaranteed, but I don’t think it’s a long shot,” he said.

Main Street was closed for most of the day on Dec. 16, the day of the fire. Portions of the sidewalk remained closed while the buildings were knocked down and the debris cleaned up. Two weeks later, several parking spaces in that area remain unavailable to people visiting the village. “The owners of these small Main Street businesses are now facing the loss of their livelihoods for an indeterminate amount of time and an arduous recovery and rebuilding process that will affect the entire village,” state officials wrote in the letter.

Eight businesses and four apartments in a total of five buildings were involved in the fire, with damage ranging from total destruction to light smoke and water damage.

Two buildings, including the front portion of the iconic Sag Harbor Cinema and a neighboring building that housed Compass real estate were demolished in the days after the fire due to structural damage.

As part of a fire investigation, fire marshals typically will determine total damages based on square footage and the cost to rebuild, but given the expanse of destruction in Sag Harbor, Tom Baker, the lead investigator, could not readily provide a figure. “In this case, you’ve got multiple buildings, multiple businesses, not to mention all the merchandise that was lost,” he said yesterday. “I’m probably not going to put a dollar figure on it.”

The Sag Harbor Cinema was most recently listed for sale at $14 million. “Was the building worth $14 million? Heck no,” he said. Main Street is prime real estate, but figuring out the building’s worth is more difficult. The assessed valuation of the property, according to town assessment rolls, is $1.3 million.

The cause of the fire remained undetermined as of yesterday, Mr. Baker said, which means investigators cannot pinpoint what started it, though he suspects it was electrical. He does not believe it was arson, however.

It remains to be seen whether a third building will be demolished.

Last week, Thomas Preiato, the village building inspector, ordered that a structural engineering report be completed on the Brown Harris Stevens building at 96 Main Street. The inspection had been done, but he had not received the report as of Tuesday. “I have a letter going to the building owner today as to the timing of the report and the fact that the building must be safeguarded,” Mr. Preatio said. East End Land Corporation is listed as the owner, with Hank Katz as one of the principals.

Richard J. Demato, who owned RJD Fine Arts Gallery located in the front of the Sag Harbor Cinema building, said he already put in a claim with Lloyds of London for $1.2 to $1.3 million. Between the fire and the demolition, everything in the building was destroyed, he said.

He is gearing up for a fight with the insurance company because he said it is trying to negotiate the claim and will not make a proposal until the end of January. If he agrees to its figure, money will not be paid out until the end of February or the beginning of March, he said. “For a normal person that would decimate them and put them out of business,” he said.

When artwork is destroyed, it is considered the same as sold, Mr. Demato said. There were 73 paintings from 15 artists, including about 8 from Frank Oriti and some from Jesse Lane. About $800,000 worth of artwork was on consignment, he said, and he owes the artists half that amount. “I will pay the artist out of my own pocket if I have to,” he said.

In addition to a fight with the insurance company, he is also bracing himself for a fight with the landlord, Gerry Mallow. He had paid his $5,000 monthly rent for the 1,000-square-foot space on its due date, Dec. 15, a day before the fire. After seven years in the space, it is money he hoped would be returned, along with his security deposit, but according to Mr. Demato, the landlord has refused. Mr. Mallow could not be reached for comment.

Mr. Demato is aware that loans are available, but said, “I don’t need a loan. It would be taking money away from somebody else. . . . I need the insurance company to pay me so I can get on with my life.”

Mr. Demato, who also lives in Sag Harbor, is looking to reopen his gallery elsewhere. “I’d love to stay in Sag Harbor, but there is nothing available,” he said. He looked in East Hampton, but found the vacant spaces too expensive; one 1,100-square-foot space was $20,000 a month, and the landlord would not negotiate.

Down the line, officials are looking for ways to help the village with a revitalization project during the rebuilding through the regional economic development council or the State Legislature. They are also looking for ways to fund the cleanup costs. The village took on demolition and cleanup soon after the fire, fees that can get recouped by adding them to property owners’ tax bills.

After the 1994 Easter fire that destroyed Emporium Hardware and other businesses on Main Street, the Town of Southampton waived fees at the landfill, where debris was taken. Mr. Thiele, the town supervisor at the time, recalled that the hardware store’s insurance did not cover the cleanup costs. “Insurance is going to enter into the picture here, too,” he said.

In the meantime, the village is settling into a new normal. Machines could be heard at work from within the theater portion of the Sag Harbor Cinema on Friday. Total Restoration Inc., which specializes in water and fire damage, was doing the work through a back door. Its truck was parked behind the theater, a sign that the seating and screen could be salvaged. Brown Harris Stevens had set up an office next to the Grenning Gallery on Washington Street.

There was a strong movement afoot to shop locally last week. Even Suffolk County Executive Steve Bellone, who had visited the village on the afternoon of the fire, returned on Dec. 21 for some last-minute Christmas shopping. At the Wharf Shop he bought a baby’s onesie with the Sag Harbor logo, designed by Peter Spacek, The Star’s cartoonist, and grabbed lunch at the Golden Pear. 

Gwen Waddington, who owns the Wharf Shop with her mother, Nada Barry, said sales seemed to be up compared to last Christmas. “I heard people who said they did not go to Tanger. They intentionally came to the village, and we felt it,” she said.

There was extra foot traffic, too, with many people visiting the village to see what was left at the site of the fire, she said.

“People consciously made an effort to shop on Main Street and we really appreciate it,” Ms. Waddington said. “I am hoping there might be something even better for the village that comes of all of this.”