Homeowners who participated in a Suffolk County grant program designed to defray the installation costs of nitrogen-reducing septic systems to protect local waters have gotten an unwelcome surprise in recent weeks. They unexpectedly received 1099 forms, which report income, from the county comptroller’s office signaling they may be liable for thousands of dollars in taxes, contrary to what they were told when they entered the program.

“It definitely feels like a bait and switch,” said Dorothy Minnick, a Flanders homeowner who had a new system installed last year after being approved for a county grant. 

John M. Kennedy Jr., the Suffolk comptroller, said Tuesday that he had made a decision in January to send 1099s to homeowners participating in Suffolk’s Residential Septic Incentive Program for the 2018 tax year. He agreed the action — and some others he has made — directly conflicts with the legal determination made by the Suffolk County attorney’s office that guided how the grant program was designed by the County Legislature in 2017, and then implemented by County Executive Steve Bellone in the last two years.

Now, upset homeowners — some of whom consider themselves well versed on the grants given their work for environmental groups or town boards — say they feel blindsided and caught in the crossfire. They were initially told only the designers and contractors who installed new systems would get 1099s from the county, since they would receive money for their work directly. 

“I’m in the boat of people who were surprised to get a 1099,” said Chris Clapp, a marine scientist with the Nature Conservancy, who is co-chairman of East Hampton Town’s water quality technical advisory committee. “I sought the opinion of some trusted C.P.A.s and tax and finance lawyers that I know, and the general consensus is, you didn’t receive a check, you don’t get issued a 1099.”

“We were told from the outset the county grant would not be taxable income for us as homeowners,” Timothy Sheehan, a Shelter Island resident, said. Mr. Sheehan is concerned that he and his wife, Kate Rossi-Snook, an environmental advocate for Concerned Citizens of Montauk who serves on the East Hampton Town Community Preservation Fund advisory subcommittee, may have to pay about $3,000 in taxes on the $10,000 county grant they received. 

Mr. Sheehan said he and Ms. Rossi-Snook were vigilant about reading and asking questions about the program; Ms. Minnick said she did the same. 

“I’m a huge environmentalist, but the way this turned out is killing me,” Ms. Minnick said.

Ms. Minnick, who relies primarily on Social Security income and earnings as a part-time real estate agent, said if she were taxed  on all the county grant and Southampton Town rebate money she received, it would “take me from an 11- percent tax bracket to a 22-percent-plus bracket, because not only am I now being taxed on the grant as additional income — it’s made my entire Social Security income taxable as well, when it otherwise would not have been. I might have to pay two-thirds more. So I’m getting zapped on this big time.”

Ms. Minnick said she is thinking of  suing the comptroller’s office — and she is not alone. 

Unraveling how this happened is complicated.

East End residents who installed nitrogen-reducing systems in 2017 and 2018 were able to apply to both the nascent Suffolk County grant program, which was capped then at $11,000 per installation, as well as to complementary $15,000 rebate programs offered by the Towns of East Hampton, Shelter Island, and Southampton. (The amounts have since been increased.) 

By combining two grants homeowners often covered the entire cost and installation of a new system, which commonly runs anywhere from $14,000 to $30,000, depending on site-specific challenges.

The town programs in East Hampton and Shelter Island clearly state that homeowners are to treat the rebates, which are provided through 1099s, as income. The county grant program was different.

Mr. Bellone told The Star in April 2017, “We want to get more systems in the ground,” and “I want it to be workable and affordable to the average homeowner. . . . It still comes down to a house-by-house pocketbook issue.” Mr. Bellone said he had received a ruling from the county attorney’s office that homeowners would be spared counting grant money as income if it were paid directly to installers and site designers. Harris Beech, a firm that routinely advises the county government, including the comptroller’s office, reportedly made that determination after seeking advice from outside legal counsel.

Mr. Kennedy — who on Tuesday stressed it is his duty as comptroller to protect the fiscal interests of the county, said he supports the grant program over all — disagrees with the county’s decision about who gets 1099s. He said one of his concerns is that 1099 payments might not comply with I.R.S. rules because they could constitute a disbursement of public funds for “private benefit.” 

Mr. Kennedy, a Republican who announced last month he hopes to oppose County Executive Bellone in the next election, blames him for the confusion. Mr. Kennedy said he had asked the county executive’s office to get a private ruling from the I.R.S. in August of 2018. “They said no. They refused to do that.”

Others trace Mr. Kennedy’s challenge to the 1099 policy back at least eight months earlier, to January of 2018. It has been noted that this is not the first year he has changed how  the 1099s would be issued.

One vendor who participated in a 2017 installation reported receiving two 1099s for the same job — one for the 2017 tax year noting the grant amount was $25,000, and a revised 1099 for 2018 reducing that amount to zero. The Star was shown documents corroborating those figures.

“If it did happen, I’m not aware of it,” Mr. Kennedy said Tuesday, but he promised to look into it.

Local officials and advocacy groups like the Group for the East End reported that grant participants have also called the county comptroller’s office to inform it that 1099s were sent to both homeowners and contractors for the same septic-system job, and to ask if this was “double dipping.” Some contractors also said they have experienced months-long delays in getting payments for completed work. 

“I’ve had some of those cases cross my desk. On its face, this seems to be an act of colossal incompetence, especially if two 1099s were issued for the same installation — it’s undeniably double taxation,” Bob DeLuca of the Group for the East End said on Monday.

“The 1099 should go to whomever receives the check,” said Len Marchese, the Southampton Town comptroller, who is an accountant. “Why they would send two for the same job makes no sense to me.”

County Legislator Bridget Fleming, who was in the work group that helped design the rebate program, said Mr. Kennedy had been wrong to issue 1099s to homeowners or to suggest the county program was based on unsound tax or legal advice.

“You can’t do this kind of program without understanding what the legalities and regulations are, and all of us involved asked those questions. We got those answers upfront and we had a sense of precisely what the legal obligations should be,” Ms. Fleming said Monday. She said the legal advice from the county attorney’s office “was given in no uncertain terms .  . . so the homeowner is not subject to any kind of claim of gross income being increased or any kind of tax obligation under the program.”

“The I.R.S. is the ultimate arbiter of this,” Ms. Fleming added, “and I fully expect that the I.R.S. will agree.”

Although that may turn out to be true, it is no immediate help to the 70 or so homeowners who have already installed new systems using the county grants, nor the 300 who have been approved and are waiting for their systems to be installed.

Mr. Clapp hopes the 1099 flap won’t set back the urgent efforts to protect local waterways. “Water is a non-partisan issue,” he said. “We really do have a clean water crisis on Long Island. These programs, when combined, really allow people to make a better choice for the environment and themselves.”

A groundbreaking ceremony for the 37-unit affordable housing complex to be built at 531 Montauk Highway in Amagansett will likely take place next month, said Catherine Casey, the executive director of the East Hampton Housing Authority on Monday. But before the festivities can begin, the housing authority and its partner, Georgica Green Ventures, have two major milestones to meet: They must secure a loan for construction financing and finalize a deal with a company that will purchase the tax credits New York State has allocated for the project.

“We can receive the tax credits, but since we’re a nonprofit and we don’t pay taxes, we can’t use them, so we partner with a corporation that has a tremendous tax liability,” Ms. Casey said. That corporation is likely to be Boston Financial Investment Management, a real estate investment company, said Ms. Casey. “But we’re still doing due diligence.” 

 New York State has allocated $7 million in funding for the project, as well as the tax credits.

The construction loan is necessary, Ms. Casey said, because the $7 million grant from the state is not awarded upfront. “The state says, ‘Yes, this money is a lock, but you will get it when you build this thing,’ ” she said. “Based on that commitment Georgica Green Ventures,” a development company that specializes in affordable housing, “can go out and borrow” the money needed for construction. 

Ms. Casey is optimistic that the milestones will be reached by the end of this month.

“As soon as we sell those tax credits and close on the construction financing, we’re going to start building,” she said.

The East Hampton Town Planning Board approved the latest iteration of the site plan for the project on Jan. 23. The complex will consist of seven buildings with 12 one-bedroom, two-bedroom, and three-bedroom units, plus one with four bedrooms, as well as a common building with a laundry room and meeting room, 74 parking spaces, a sewage treatment plant, and a rain garden.

Each of the apartments will have ample storage space, said Ms. Casey, and bathrooms that are large enough to accommodate a person in a wheelchair. Ten percent of the units must be handicapped accessible, she said, but the housing authority is hoping to increase the number to just under 50 percent.

The housing authority and Georgica Green Ventures modified the original site plan to increase cost-effectiveness. The seven buildings, for instance, will now be fabricated by Simplex Homes, a modular homebuilder in Scranton, Pa., and transported to Amagansett, instead of being built on site. 

A plan to install carports with solar panels has been shelved, also due to budgetary concerns, and a community vegetable garden was removed after state officials expressed concerns about its proximity to the Long Island Rail Road tracks. Those tending the garden, they said, would be negatively affected by noise.

Ms. Casey said that the carports and community garden would likely be added in the future. “Let’s get the housing done, that’s the big megillah, and then we will find a spot for a garden, and we will continue to pursue the solar,” she said.

After the groundbreaking — the date of which will be chosen by state officials and may include an appearance by Gov. Andrew M. Cuomo — the site will be prepared for the arrival of the buildings. Crawl spaces will be dug, slabs for the buildings will be constructed, grading will be done, utilities will be installed, and a new four-foot horse fence with mesh will be built along the railroad track to “prevent children from going on the tracks,” she said. A fence will also encompass the property to contain stormwater runoff during construction.

“At that point we’ll also be finalizing finishes with the modular homebuilder, picking flooring, trim color, and all those details,” said Ms. Casey. “That’s going to happen in May and June.”

The buildings should be built and ready for delivery by late summer. They will be trucked in at night, she said, and stored near their ultimate destination. “You can’t bring all the buildings to the site and start placing them — it’s too constrained,” she said. 

As soon as financing is secured and building begins, said Ms. Casey, the housing authority will “aggressively market” the affordable housing opportunity. 

“We have told people all along, as soon as you see bulldozers, call us to get an application,” she said. “People have been calling our office for three years wanting to get an application or to get on a contact list, and I have resisted that because experience tells us that people are applying because they don’t have solid housing, and if they move, we can’t find them.”

The rental apartments will be for those who work full time, year round, in East Hampton Town and do not own property. Only a small percentage of units will be subsidized, and renters will have to meet income eligibility requirements. 

Certain people — such as firefighters, people with disabilities, and honorably discharged veterans — will be given preference. Ms. Casey said she is waiting for the state to sign off on who else will qualify for preferential status, but that those three categories are “pretty solid.” 

The application process will continue until the state determines that construction is 75 percent complete, and, soon thereafter, a lottery will take place. 

The applicants will be divided into four groups: East Hampton Town resident (which includes those who commute and work in town full time, year round) with no preference, East Hampton Town resident with preference, non-East Hampton Town resident, and non-East Hampton Town resident with preference. The number of applicants who will be chosen from each group is yet to be decided. 

“We’ll get applications from all over the country,” said Ms. Casey. “The way the system works is you first exhaust your local list, and when nobody in East Hampton wants to live in one of these apartments, then we go to the nonresident list.”

Ms. Casey said the lottery may be broadcast live on LTV with an audience made up of applicants. Each application will be given a number, which will then be placed in a bingo-style barrel and chosen at random. “We won’t be calling out people’s names on live TV, we’ll be calling out numbers,” said Ms. Casey.

Ultimately, each of the applicants will be given placement — from number one downward — on a list of potential occupants. 

The housing authority will then verify that the applicants do indeed meet the qualifications for affordable housing, and those with a high enough placement in the lottery will be offered an apartment. 

Although 37 apartments may seem like a small munber to vie for, Ms. Casey said that the chances of getting one are greater than they may first appear. 

“Typically maybe half the people we offer an apartment to will say, “ ‘You know what, I’ve changed my mind,’ ” she said. “And, interestingly enough, with every new project, you also have people who move out within a year. It’s not a reflection on the property or how it’s managed, it’s that people change their minds.”

Only one lottery will be held for the apartments, and after the initial occupants are chosen, the housing authority will maintain a waiting list for available apartments. Those who entered the lottery will retain the positions they were awarded, and new applicants will be placed behind them on the list. 

Ms. Casey said that the first group of residents to live in the complex should be moved in by late 2020. “If the buildings get set up by this October, I would say that 12 months from that date, it should be 100 percent occupied,” she said.

An East Hampton woman’s four-legged clients won’t have to sniff out a new day care thanks to an East Hampton Town Zoning Board of Appeals decision that allows her to continue operating the business out of her house.

Last week, the zoning board voted unanimously to overturn a building inspector’s decision that would have put Lori Marsden out of business. At a Feb. 26 meeting, the board ruled that her pet care business does in fact meet the standards under the town’s home occupation law. The town code permits residents to run businesses out of their home as long as they do not exceed 25 percent of the gross floor area or 500 square feet, whichever is less; that the business be done solely by the occupants, except for one additional employee, and that there be no external evidence of the business, including noise, aside from an outside sign. 

In July 2017, town code enforcement issued violations to Ms. Marsden for operating the business out of her house on Saddle Lane in East Hampton, in a residential zone. With the criminal case pending, Ms. Marsden’s attorney, Carl Irace, sought a determination from the building inspector, expecting that her business would be ruled a lawful home occupation as defined by the code. He and Ms. Marsden were surprised when the inspector, Ann M. Glennon, said that a dog day care violated the town code. They went to the zoning board to appeal her decision. 

Tim Brenneman, a board member who led the research on Ms. Marsden’s appeal, also referred to amendments to the home occupation law that allowed for beauty and barbershops, as well as businesses related to the commercial fishing industry. Businesses such as clinics, hospitals, antique dealerships, retail shops, and breeding kennels were prohibited in another amendment. 

“I found that paragraph particularly interesting, because the board saw fit to make sure that they preserved the historical home occupations of our baymen,” Mr. Brenneman said after reading that subsection of the code. “But I also would note they were particularly focused, not just on any kennel operation but that of a breeding kennel, and they specifically referenced that. The inference here could be that they viewed that distinction perhaps as the difference between a home-based business and a commercial business.”

Theresa Berger, another board member, said she felt that that the amendment singled out breeding kennels. “To me, the intent of the legislators, at the time, the boards that were in place, actually analyzed this and put a lot of thought into what would be a home occupation,” she said. 

Ms. Marsden’s business is not considered a boarding facility, in that there are no visible crates or cages, and the dogs that stay with her during the day, and occasionally overnight, are treated as her own two dogs are, Mr. Brenneman said. 

Roy Dalene, a board member, said he felt the building inspector’s decision “was somewhat arbitrary.” He said it was conjecture on her part to assume Ms. Marsden’s business was a kennel. “There is no evidence that it was a kennel.”  

“A dog walking and doggy day care business does meet and should meet and my common sense tells me it better meet the definition of a home-based business,” he said. 

Mr. Brenneman said he did not feel the business changed the character of the neighborhood, even though neighbors had complained at a hearing in late January about noise. He said it was unclear to him how much of the noise could be attributed to Ms. Marsden’s own dogs versus that of her four-legged guests. “We simply don’t know,” he said, adding that the audio file that one neighbor had submitted was less than 15 minutes long, which is the amount of time of dog barking that would trigger a town code violation. The noise would be a matter for code enforcement, he said. 

He said he was “uncomfortable” with the building inspector’s statement regarding the dog walking aspect of Ms. Marsden’s business. Ms. Glennon had said in her July determination that Ms. Marsden could run the business if she picked up and dropped off the dogs elsewhere. Mr. Brenneman said he did not feel there was any reason for that. 

“I do believe the town should look at this issue and consider updating the home occupation definition as it specifically relates to dog care,” he said. Earlier, he said that the issue of pet care is “worthy of a more detailed and nuanced definition that better considers and balances the needs of the community for this important service and the neighbors that are equally deserving of protection. . . .” 

The home occupation law, updated twice since its adoption, is “a living definition subject to consideration and update given the world we live in and is neither absolute nor unalterable.”

John Whelan, the chairman, said a dog day care business is a necessity for pet owners and that it was obvious from the letters of support Ms. Marsden had received that people appreciate the good care she has taken of dogs. He said he thought the town board would be listening and would want to further clarify the town code.  

What the board did not do in its decision was address Ms. Marsden’s attorney’s claims that this was an assault on all home occupations. Carl Irace had maintained that saying she was illegally running a business out of her home put all home occupations at risk.    

Mr. Irace, who is waiting for the written decision, said he was happy with the board’s discussion last week. “I am relieved that they appear to be going our way, unanimously and unequivocally. The board members clearly took this very seriously and each brought valuable perspective to the discussion.”

It was late in the afternoon on Valentine’s Day when the East Hampton Town Recycling and Litter Committee met at Town Hall. Just three days earlier, Kathleen Kirkwood, a committee member since 2012 and its chairwoman since 2016, was one of 38 entrepreneurs to address a group at the Nasdaq MarketSite, in Manhattan’s Times Square. She spoke about sustainable fashion. 

But on this day, the energetic Ms. Kirkwood was leading the committee, with Councilwoman Sylvia Overby, its liaison to the town board, attending, through an agenda that saw discussion and planning on topics including a pilot program denoting carry-in-carry-out policies at beaches and other public places; the town’s adopt-a-road program; legislation and a public service announcement to ban plastic straws; roadside trash elimination, and the town’s recent votes to prohibit polystyrene and the intentional release of balloons. 

Rona Klopman, the committee’s secretary, proposed a ban on smoking on the town’s beaches at the meeting (cigarette butts, the most commonly littered item in the United States, are full of toxins as well as a form of plastic called cellulose acetate). Eleven days later that suggestion was brought to the East Hampton Town Trustees, who discussed parameters of such a ban, agreeing to support legislation that would decrease that form of litter. 

For Ms. Kirkwood, who lives in Montauk and Manhattan, recycling comes naturally. As a successful fashion entrepreneur, it has been a part of her business for the better part of a decade. Her career, in fact, demonstrates a talent for reinvention. 

“At 19, I became a model,” the Valley Stream native said. Shortly after signing with the Ford agency, however, “I got hit by a car.” 

She suffered no permanent damage, but her contract was canceled. “I was wearing beautiful clothing,” she remembered. “Even though I lost my job, so to speak, I still wanted to wear that clothing, so I figured out a way to hack the system.” 

It was the 1980s — the era of the padded shoulder — and in 1982, Ms. Kirkwood invented the clip-on shoulder pad by removing them from clothing and affixing them to bra straps with Velcro. Quickly, friends asked for them, and the following year, Bloomingdale’s ordered the first of her Pints of Pads, which came in a container that resem bled a pint of ice cream. Saks Fifth Avenue, Neiman Marcus, and Nordstrom followed, and the invention soon went international.

“Oprah called me,” Ms. Kirkwood said, and after appearing on Ms. Winfrey’s program as well as on CNBC and CNN, in The New York Times, The Wall Street Journal, and in Forbes and Fortune magazines, the QVC home shopping network offered a venue for her products. “Because of the volume of pads I was making, I was able to make more things, like bras and shapewear,” Ms. Kirkwood said. “I brought all of that to QVC.” 

On an overseas trip, “I witnessed a shipment of bras to Victoria’s Secret from the Chinese factory.” It took 16 hours, she said, for a month’s supply to be loaded into a caravan of tractor-trailers. “They let me know that they ship about 14 million bras a month.” 

The experience spurred an epiphany: bras, comprising polyurethane foam, polyesters, nylons, and metal, should not end up decomposing for centuries in a landfill, or emitting toxic gases when incinerated. Rather, bras, some 500 million of which are sold in the United States annually, should be recycled. “It was my ‘Aha’ moment,” she said. 

In 2010, she founded the Bra Recycling Agency, or B.R.A., which enables people to send old bras to a recycling plant, where they are shredded and pulverized and then processed into carpet padding. Early on, “Maidenform and some other brands donated a couple of tons of bras, and I shipped them to my first plant,” in Cumberland City, Tenn., Ms. Kirkwood said. “I spent about a week there, grinding, chopping, doing all sorts of things. They put magnets over the top of the grind so that the metal from the underwire came up.”

“They put them through sifters, and the plastic ring and slide come out,” she said. This is also recycled, and the remainder is turned into carpet padding. “Turning bras into commercial carpet padding has been a labor of Mother-Earth love,” she said. 

Ms. Kirkwood has created three business models to support B.R.A.’s work. Retailers can purchase customized recycling bins or mail-in envelopes encouraging women to recycle and buy new. Brands and manufacturers can also license a B.R.A. certification, allowing them use of the logo to publicize their environmentally friendly participation on product labels, hangtags, social media, and advertising and marketing materials. 

Most recently, advertising directly to consumers has become the primary effort to grow and support B.R.A. Women who text “BRA” to 79274 receive a free, downloadable mailing label to print, affix to a box or envelope, and mail to B.R.A.’s recycling center. Sponsors’ advertising on texts and labeling is allocated to the effort, which includes processing, sanitizing, and transportation, among other expenses. As volume has grown, Ms. Kirkwood has appropriated revenue from recycling of bras’ steel underwire to breast cancer research. “Don’t burn your bra, recycle it,” is the slogan. 

The litter and recycling committee will meet again on March 22 at 11 a.m. in the meeting room at Town Hall. The public is invited to attend. “Our committee always has ambitious goals,” Ms. Kirkwood said, “and welcomes new members to join or participate when they can so we have boots on the ground to motivate the players and leaders in the community to revise, repurpose, rethink, and, if all goes well, rejoice.”

Over some objection during last Thursday’s public hearing, and one nay vote among five, the East Hampton Town Board amended the town code to change the permitting scheme for driving on beaches. A related change to parking at beaches was unanimously approved. 

The new laws require residents to obtain new permit stickers for parking and driving on beaches next year. Permits will be valid for five years; in the future, they will expire on Dec. 31 in years ending in 5 and 0. 

Current stickers issued for parking and driving on beaches do not expire. Members of the board, mindful that more than 30,000 such permits have been issued, have voiced the concern that many vehicles bearing current permits were subsequently sold to nonresidents, who would not be authorized to use them. The town trustees, who manage common lands, including beaches, on behalf of the public, supported the board’s plan to implement a new permit scheme. 

Color-coded beach vehicle permits  will become available later this year, become mandatory in 2020, and expire in 2025. A fee schedule for nonresident permits is to be voted on at the board’s meeting on Tuesday. The board has emphatically stated that permits will remain free for residents.

Another change to the code requires that those operating a vehicle on the beach be equipped with a fire extinguisher, along with the tow rope or chain, jack, and spare tire already required. 

Councilman David Lys voted against the beach driving amendment. The town, he told his colleagues, should wait to enact any changes to regulations until an appeal of a lawsuit, waged by a group of Napeague residents opposed to beach driving on the shore near their neighborhood and the summertime gathering of vehicles at a 4,000-foot-long strip of sand popularly known as Truck Beach, has been resolved. 

Lawsuits brought by Seaview at Amagansett Ltd., et al., and White Sands Motel Holding Corp., the latter concerning a 1,500-foot stretch in front of the White Sands Resort Hotel, asserted that the beaches in question belonged to those entities. The plaintiffs sought to portray a dangerous environment with hundreds of vehicles weaving through crowds and children at play, and people and dogs urinating and defecating in the dunes, posing a threat to public health and the environment. A June 2016 trial was decided in favor of the town and the trustees, co-defendants in the lawsuits. 

Town officials had been planning eminent domain proceedings had the plaintiffs prevailed, resolving to condemn a total of just over 22 acres of shorefront between the mean high water mark and the toe of sand dunes making up the two parcels. Last Thursday, Mr. Lys worried aloud that the beach driving amendments might interfere with condemnation efforts, should the plaintiffs’ appeal be successful. 

During the public hearing, Diane McNally, a former longtime clerk of the trustees, begged the board not to act. “No one who likes to go on the beach with a vehicle has ever wondered about ‘How many permits have we issued,’ ” she said. “The only concern about the number of vehicles that might have permits on them has been raised by those who oppose the vehicles on the beach. To change your code right now, before this question of ownership is finally answered, will only add fuel to the fire for those who are appealing.” 

It is the role of code enforcement officers, Ms. McNally said, to ensure that beach driving permits are valid. “If this is a serious problem, let’s make that documentation, the number of fines, public knowledge,” she said. “I don’t think it is.”

The bigger issue, she said, is the plaintiffs’ appeal. “That lawsuit has got to be finished, there has to be an answer one way or the other, who owns that beach. I don’t want to see that jeopardized in the future.”

A controversial settlement between Marc Rowan, the owner of Duryea’s Lobster Deck in Montauk, and East Hampton Town in a dispute regarding uses of the property requires Mr. Rowan to obtain site plan approval and a permit from the town planning board, but limits the scope of the board’s site plan approval. At a meeting on March 6, planning board members grappled with the restrictions placed on them by the settlement.

Mr. Rowan, a billionaire investor, purchased the three-acre property, a pier and complex of buildings on Fort Pond Bay, in 2014. 

According to the settlement, the town will provide a certificate of occupancy for existing structures, including those used for outdoor dining, fish processing and preparation, and wholesale and retail seafood sales, as well as for a house with an attached garage that was once a residence for the family of Perry Duryea Sr., who helped launch the business more than 80 years ago.

Mr. Rowan agreed to prohibit cruise liners or ferry services from docking on the pier, and to contribute to a road-improvement fund to mitigate flooding at the intersection of Tuthill and Manor Roads. He also agreed to donate the property at 120 Tuthill Point Road as well as half of Tuthill Pond and its bottomlands to a qualified environmental organization or, in the latter case, the town. 

The settlement requires Mr. Rowan to obtain a permit from the planning board to operate a restaurant in a waterfront-zoning district, but it limits the scope of the board’s site plan approval. The board is only permitted to review a parking plan and the installation of an updated nitrogen-reducing septic system, which Mr. Rowan must have in place within 18 months of receiving approval for the restaurant. The planning board must also provide expedited review of the application.

Although board members were asked to evaluate the location and specifications for the restaurant’s proposed wastewater disposal system, the town had already agreed that the system could be placed on the residential portion of the lot, which is uphill from the commercial buildings.

“This is the craziest routing uphill of a sewage system that I’ve ever encountered,” said Kathy Cunningham, the vice chairwoman, said. “It’s long and circuitous, and I’m concerned that it’s not going to function that well.” 

Her colleague Randy Parsons questioned the decision to allow the restaurant to operate for 18 months before a new septic system is in place. “And what happens after 18 months if the wastewater system isn’t installed or functioning?” he asked. 

Mr. Parsons also wondered whether the planning board was allowed to designate the number of seats allowed in the restaurant. The capacity, he said, would factor into decisions about wastewater treatment and parking. 

According to a memo from JoAnne Pahwul, the town’s assistant planning director, the application indicates that the property contains 84 pre-existing non-conforming parking spaces, including 3 that are handicapped accessible, as well as 11 boat slips. But Ms. Pahwul noted that one of the maps included with the settlement showed only 24 spaces. She requested additional information on the parking plan from the applicant and more details about two retaining walls to be built in conjunction with the sanitary system. 

Samuel Kramer, the chairman, invited the public to weigh in on the application. Lisa Grenci, who lives on Tuthill Road, took issue with the installation of a “massive septic system in a 100-year-flood zone and on an environmentally and archaeologically significant parcel.” She also said her community would be negatively impacted by the presence of a full-scale restaurant.

“There have been 80 cars parked on that block, and it’s been nothing but a fire hazard, an ambulance hazard, and overwhelming septic abuse for our neighborhood,” she said. “It’s imperative for you not to follow any stipulation, but to follow the town code.”

David Gruber, a lawyer and the East Hampton Independence Party’s candidate for town supervisor in 2019, said that since the planning board was not a party to the lawsuit between Mr. Rowan and East Hampton Town, it was not subject to the terms of the settlement. The planning board is an independent body, he said. “You do not follow instructions from the town board.” Mr. Gruber said he was prompted to speak at the meeting because he found the settlement with Mr. Rowan to be an “outrageous abuse of the system.” 

The board has enlisted David Arnsten as outside counsel for this application, replacing John Jilnicki, the board’s lawyer, who recused himself because he was one of the town attorneys who negotiated the settlement with Mr. Rowan.

Since the application was deemed incomplete, the hearing was adjourned to a date to be determined. In the interim, Mr. Kramer said, an executive session will be held to allow members to consult with Mr. Arnsten. “The limitations of this order is something we should talk about with counsel, so we have an understanding of what we can and cannot do,” he said.

A proposal from the Hero Beach Club in Montauk, whose owners are seeking a permit and site plan approval to convert one of three hotel-room buildings there into a 16-seat restaurant, raised questions about parking when it was discussed at the East Hampton Town Planning Board meeting on March 6.

  The town board recently enacted new parking requirements for resorts and motels. The code now says a resort must meet current parking requirements for its principal use (not including pre-existing nonconforming spaces). The board considers the restaurant an accessory use and creating it would necessitate an additional 50 percent of the parking otherwise required. The planning board has the authority to reduce the amount of parking if existing conditions prohibit it, or if the owner offers mitigation.

Before discussion of the application began, Tiffany Scarlato, a lawyer for the Hero Beach Club, which is owned by a group including Jon Krasner, who is also a principal in the Shagwong and Salt-box restaurants in Montauk, addressed the board. She asked that Louis Cortese recuse himself because he had previously expressed opposition to the proposal as a signatory on a letter from the Ditch Plains Association prior to serving on the board. Mr. Cortese complied.

 In a memo, Eric Schantz, a senior town planner, calculated that under the new code the resort would require 38 on-site parking spaces. It now has 16. The resort includes a pool and a more than 10,000-square-foot lawn. Mr. Schantz also noted that the board had previously discussed prohibiting food and beverage service on the lawn. The plan calls for service to be provided in just three places on the property: in the restaurant, on adjacent decks, and in an enclosed pool area. 

Britton Bistrian, a land use consultant for the Hero Beach Club, said the owners were still figuring out how to comply with the new parking requirements and would return to the board with a plan at a later date. 

“The sole purpose of this restaurant is to provide a food service amenity to our guests. We don’t want to become the new Montauk hot spot, and we don’t want to become a bar.” The restaurant would, however, include a small bar, she said. 

Ms. Bistrian said the owners would be open to a covenant that prohibits food and drink being served on the lawn and would agree to cap the maximum occupancy of the property at 225 people. 

As a gesture of good will, Ms. Bistrian said the owners would also replace the resort’s three conventional cesspools with a low-nitrogen septic system. The cost for that upgrade, she said, would be $100,000. 

Ian Calder-Piedmonte, a board member, said he had been in favor of the accessory use in the past but that the code changes had given him pause. “It makes sense that you provide beverages and food to your guests, but it’s tricky to find sufficient parking,” he said. 

Since the board has the authority to reduce parking requirements, Mr. Calder-Piedmonte said it would be in the owners’ interest to assure the board that “the accessory use was solely for the guests and no one else.”

To that end, Samuel Kramer, the planning board chairman, suggested the possibility of requiring customers to present a room key before being served.

As part of an effort to restore the Deacon David Hedges house in Sagaponack, which was built in 1775 by a descendant of one of East Hampton’s founding families, the owners are seeking variances from the Sagaponack Village Zoning Board of Appeals to build a second structure on the property. Ideas about how to save the house while conforming to zoning drew a proposal from Elliott Meisel, the Z.B.A. chairman, that the property be divided in two. 

David Hedges, who lived from 1744 to 1817, was a prominent preacher and statesman. He was supervisor of Southampton Town for 20 years, a member of New York’s Fourth Provincial Congress, which adopted the first State Constitution, and was a delegate to the convention that ratified the United States Constitution. His house, at 414 Hedges Lane, is on a street that at one time contained only houses owned by Hedges relatives.

The current owners are John Wilkes Hedges, Walter Rose Hedges, and William Huntting Hedges, siblings who are 12th-generation descendants of the first Hedges family in East Hampton. 

At a Feb. 8 meeting of the Z.B.A., John Hedges told the board it would cost more than $2 million to rehabilitate the 18th-century house. “It is not economically feasible to take the house as it stands and make it into something which anybody would really want to live in,” he said.

Last April, the house was listed for sale at $11.95 million. Later last year, the family sought to tear it down to make room for a new house, but the village’s Architectural and Historic Review Board denied a demolition permit. 

The current plan is to keep the historic structure, and build another residence on the 3.2-acre parcel, with a pool, pool house, and tennis court. Part of the money earned from selling the new house, Mr. Hedges said, would be used to restore the historic Deacon David Hedges house. 

The new structure, which would become the primary residence, would be more than 8,000 square feet. That would conform to code. The historic house, which is more than 5,000 square feet and 31 feet high, would then become an accessory structure and require a ground-floor area variance of nearly 4,000 square feet and a height variance of more than 11 feet. 

Opposition to the Hedges application has come primarily from Rebecca and Laurence Grafstein, who own two adjacent parcels, one of which contains a residence while the other is vacant. 

Linda Margolin, the Grafsteins’ lawyer, said at Friday’s meeting of the Z.B.A. that the Deacon David Hedges house contains bedrooms and a kitchenette, and would therefore function as a second dwelling on the property, which is not permitted. “The applicant claims it won’t be used for residential purposes, but the village code is quite clear that you can’t have an accessory structure that is either designed or used for sleeping and eating,” she said. 

Mr. Meisel, the Z.B.A. chairman, refuted that claim. He said that if the variances were granted, they would be conditioned upon the front structure being used as an accessory. He then encouraged both parties to revisit a proposal to divide the land into two lots, which would allow the historic house to remain a primary residence rather than an accessory.

Although Ms. Margolin had previously opposed that, on Friday she said she was open to the idea as long as her clients received some assurance that structures on the new, vacant lot would not be too close to their properties. 

Before he rescheduled the hearing for the Z.B.A.’s meeting on April 8, Mr. Meisel encouraged the applicant and the neighbors to use the ensuing month to find a way to make the subdivision proposal workable.

The East Hampton Town Board backtracked on a settlement the town reached in January with Marc Rowan, the billionaire owner of Duryea’s Lobster Deck in Montauk, following an outcry from residents. 

At the board’s work session in Montauk on Tuesday, the board voted unanimously to hire the Sokoloff & Stern law firm “to advise the town on all litigation involving Sunrise-Tuthill Properties,” corporations affiliated with Mr. Rowan, and appropriating up to $20,000 for its services. 

The board had not voted on the settlement, signed in January by Michael Sendlenski, the town’s attorney, along with Mr. Rowan and an attorney representing him. It allowed Mr. Rowan to apply to the town planning board to legalize table service where it was technically disallowed. The town was to deliver a certificate of occupancy for structures on the property pertaining to the complex’s ice manufacturing, sale, and storage facility; fish processing, preparation, and cleaning; fish market; wholesale and retail seafood shop with ancillary areas; an accessory dining patio; a cottage and garage, and outdoor decks, as well as a house and attached garage that was once the Duryea family’s residence. 

A pending building permit application for the reconstruction of an existing garage was to be issued, and Mr. Rowan was not to be prevented from applying for future alterations on the site. The town was also to honor state patents granted to the Duryeas long ago, acknowledging that it has no jurisdiction over a pier repaired after Superstorm Sandy in 2012. 

The settlement followed three lawsuits filed by Mr. Rowan in March 2018. 

David Buda, a Springs resident and frequent critic of town government who brought the settlement to public attention last month, continued his critique on Tuesday. “What I found was deeply disturbing,” he said of the stipulation of settlement, “both because the so-called benefits to be provided to the town were mostly window dressing and because the town gave away much more than it should have and in a manner that tied the hands of town officials and the planning board.” 

David Gruber, a candidate for supervisor and another frequent critic of the board, made remarks similar to those in a letter that appears in today’s Star. The settlement, he said, “marks a new low for lawlessness by the East Hampton Town Board.” 

He charged that the board, with the exception of Councilman Jeff Bragman, “were so intent on hiding from the public what appears to be a grossly inappropriate sweetheart deal for the property owner that they could not bear to vote on it in public as the law requires,” and credited Mr. Buda with bringing it to the public’s notice. His remarks drew loud applause from those in attendance, most of whom were Montauk residents. 

Mr. Van Scoyoc defended the board’s actions. Mr. Gruber was correct that the board had not voted on a stipulation, nor authorized him to sign such a stipulation. “Therefore, we have not adopted that stipulation.” But he said that Mr. Gruber’s characterization of the board’s conduct was inaccurate. “Anytime the town engages in discussion of stipulation of settlement, it’s done in executive session,” just as contract negotiations and personnel matters are.

Mr. Bragman, whose criticism of the settlement at the board’s Feb. 21 meeting prompted a loud and sustained rebuttal from an infuriated Mr. Sendlenski, again defended his own conduct, but acknowledged that most of the town’s attorneys were unable to work on the settlement due to conflicts of interest. “I had misgivings about the settlement agreement,” Mr. Bragman said. “At this point, despite what led us to where we are . . . where we are on the settlement is a situation we don’t want to be in.” The town will be better served by independent legal advice, he said. “I’m a lot happier today than at the last meeting. I hope it’s a change that’s going to be better for Montauk as well.”

Due to a clerical error, the East Hampton Town Trustees canceled a special meeting scheduled for last evening to discuss revising the terms of leases to tenants on trustee land at Lazy Point in Amagansett. 

The trustees have added Lazy Point leases to the agenda of their next regular meeting, on Monday at 6:30 p.m. at Town Hall.