Bulova Fees Will Buy Cottages
Six years after it was first formed, the Sag Harbor Community Housing Trust is making plans for a project that will provide what officials say is desperately needed work force housing in the area, though it is taking a different path than originally thought.
Jumping on an opportunity that arose recently, the trust is in the process of purchasing a 2.5-acre parcel just outside the village for $1.275 million, Greg Ferraris, the president and treasurer of the of trust’s board announced at a Sag Harbor Village Board meeting on Tuesday evening. Located in the Town of East Hampton at 782 Route 114, it contains eight small cottages. It was listed with the Corcoran Group for $1.275 million.
The nine-person board formally came together in the fall of 2013 when it became clear that the trust would indeed receive over $2.5 million from Cape Advisors, the developers of the former Bulova watchcase factory, which paid a fee to the village in lieu of providing on-site affordable housing, as was required by the Suffolk County Planning Commission.
The trust does not have specific plans yet for the property, but wants to work with East Hampton Town and Suffolk County, as well as private organizations, to develop one, said Mr. Ferraris. At a minimum, the Route 114 property would provide eight housing units.
“There’s no other existing spot in the school district that has this type of density,” he said. The property is zoned residential, and Mr. Ferraris said the trust would be able to expand its residential use. “We don’t necessarily need to abide by what’s existing today. We would really just need to abide by the Town of East Hampton zoning code residential setbacks.”
The board conducted a needs assessment analysis, still in draft form, that Mr. Ferraris described yesterday as “eye-opening.” “To be quite honest with you, the results we received were a lot different than what was proposed six years ago,” he said. “Initially, it was thought the best use of these funds was to provide down payment assistance, that sort of thing, to individuals in the community,” he said. Mr. Ferraris was the village’s mayor when Cape Advisors first got site plan approval and served on the village’s planning board when the developers later returned with amended plans. Now, he said, the trust sees that “the most benefit we could provide out of this funding, this $2.5 million, was to work with other municipal organizations to develop brick-and-mortar-type solutions rather than financial assistance.”
It became clear after speaking to financial institutions and reviewing the regulatory requirements to obtain a mortgage that “the spreads are just too large,” Mr. Ferraris said. “Incomes have stayed relatively consistent while housing prices, in this district — that’s a key to this, we’re concentrated on within the school district — have increased exponentially within the last six to seven years. Even if we were able to provide financial assistance, people still wouldn’t be able to obtain a mortgage without substantial down payments being made,” he said.
At the meeting, he rattled off figures for the board. According to the United States Census, he said, the median home price on the East Hampton Town side of Sag Harbor was $650,000 in 2004 and in 2014, it was $1.1 million. On the Southampton Town side, the median home price was $915,000 10 years ago and is now $1.9 million. Meanwhile, the median income for those living on the Southampton Town side is $91,000, while it is $58,000 on the East Hampton Town side.
Mayor Brian Gilbride said on Wednesday that those figures were revealing of the situation in the greater Sag Harbor area. “I think the Bulova project puts in place the mechanism for a workforce housing that we desperately need in Sag Harbor just because of numbers that Greg spoke about. I thought the numbers themselves kind of get your attention,” he said.
Also, the board found that the Sag Harbor School District is grappling with a unique problem for the area in that there is a lack of rental housing inventory. As many as 40 families move into the school district from September to May just so their children can attend school there. “What that does, it obviously takes away the inventory of year-round housing and drives the prices up. In interviewing real estate agents, the price of a rental house within the Sag Harbor School District — a three-bedroom ranch — is beyond reach of a normal working family at this time as a result,” he said. “There are waiting lists from real estate brokerages in our district of people looking to rent year-round rentals for that reason.”
The idea of a housing trust that would come up with a plan for the $2.5 million the village would receive from Cape Advisors was hatched when Mr. Ferraris was mayor and the Bulova project first received site plan approval. The initial covenant required the developers to give the village more of the money up front, but then the project stalled. The developers requested changes that included a payment scheme where the trust receives funds as each unit sells. Units are in contract, but they won’t be sold until a certificate of occupancy is issued.
While the purchase of the Route 114 property is expected to close in the fall, the trust may not be in receipt of all of the money by then. Bridgehampton National Bank has “stepped up” to provide interim financing for the down payment, Mr. Ferraris said.