Transfer Tax On Hold
A month ago it looked as if the battle to get a real estate transfer tax on the November ballot in East Hampton Town had been won. But by yesterday afternoon the fight for the legislation, which could raise $20 million for open space preservation over 10 years, seemed ready to continue to the bitter end.
If Gov. George E. Pataki does not sign the legislation by tomorrow, a proposal to pay for open space purchases with funds gathered from a 2-percent tax on higher priced real estate sales will not make it onto the East Hampton ballot this year.
To get on the ballot, the local law on the transfer tax must be filed with the Secretary of State tomorrow.
Delivery Glitch?
The State Senate and Assembly approved enabling legislation weeks ago and the East Hampton Town Board is unanimous in support of the plan, but the Governor's office is apparently claiming the legislation was never delivered for him to look over. Supervisor Cathy Lester said the Governor's office requested a copy of East Hampton Town's Open Space Plan in connection with the transfer tax legislation last Thursday.
A representative from the office of Assemblyman Thomas DiNapoli, who supported the bill along with Assemblyman Fred W. Theile Jr. and State Senator Kenneth P. LaValle, hand delivered a copy of the legislation to the Governor's office yesterday.
In anticipation of Governor Pata ki's signature, the East Hampton Town Board adopted a local law on the 2-percent transfer tax last Thursday, believing his approval would be forthcoming. Now, board members are not so sure.
Calls to the Governor's press office were not returned by press time.
Realtors Lobbied
A 2-percent real estate transfer tax to fund open space acquisitions was first proposed more than a decade ago, but was shot down by the State Legislature year after year. This year, with a coalition of real estate brokers, builders, business persons, conservation groups, Republicans, and Democrats in local and state government behind the transfer tax, it finally won passage in the State Legislature.
While a number of local realtors supported the transfer tax, the powerful State Board of Realtors has continued to lobby against it, claiming the 2-percent surcharge will deter buyers and questioning whether a similar tax could be used for general municipal projects as well.
If the Governor doesn't sign the legislation, some think it will be because he was won over by the realtors' arguments against it.
Price Cap
The tax, which would be paid by the buyer, would affect sales of improved property over $250,000 and unimproved land over $100,000. Only the portion of the price that exceeds those caps is to be taxed. So, for example, if a house sells for $278,000, the buyer will be required to pay 2 percent of $28,000 into a community preservation fund. That $560 surcharge will, in turn, be tax-deductible.
If East Hampton voters do get to cast their ballots on the measure and if they approve it as local lawmakers are confident they will, the law would go into effect on March 1, 1998, and would sunset on Dec. 31, 2008.
The proposal has been gathering momentum for a number of years and probably passed in the Legislature this year because it had the backing of some of those who have traditionally opposed such a measure - the real estate and building industries.
Industry Divided
"We've had our disagreements. We support the preservation of open space," Michael DeSario said at a public hearing on the law last Thursday, "but not all of us are supportive of the transfer tax."
Mr. DeSario, a broker with Cook Pony Farm Real Estate in East Hampton, is on the board of directors of the Hamptons and North Fork Realty Association. He had several long discussions with brokers in other communities with transfer taxes before deciding to support this bill. "It's well crafted in that, for it to have passed, the community has to have shown a commitment to preservation," he said.
Last November 71 percent of East Hampton voters approved a $5 million open space bond issue. Supporters of the transfer tax often point out that residents have again and again supported spending for preservation.
Floated And Sank
The hearing last Thursday was more a stage for congratulatory comments than a heated debate on the transfer tax. Several supporters who had been on the front lines of the effort - Robert DeLuca of the Group for the South Fork and Richard Amper and Edwin M. (Buzz) Schwenk of East End Forever and the East End Land Bank Coalition commended the Town Board for working together, across party lines, so effectively.
"East Hampton has continued to set the standards for other towns to follow," said Mr. DeLuca, president of the Bridgehampton-based conservation group, which has members in East Hampton and Southampton Towns. He praised the board for working so ferverishly on a bill that sometimes "floated and sank in the same day."
"It's a tremendously responsible action," Mr. Amper said. "No one is making political hay about this." While some argue that limiting development limits the tax revenue for town services, Mr. Amper said that the cost to provide needed services when development levels increase is greater than the increase in tax revenue.
Fear Land Squeeze
"The South Fork is outdistancing the Town of Brookhaven every week in building permits issued and Brookhaven is the biggest town in the county," Mr. Schwenk added.
East End Forever
"If we had $450 million we might be able to maintain the landscape and preserve the quality of life we enjoy now," said Stuart Lowrie of the Nature Conservancy, pointing to the need to raise funds through more than just bonds.
Brokers in favor of the tax have said that further preservation efforts will increase the value of land, but a few at the hearing worried that higher prices will have a deplete affordable housing and land in a town that already has a serious shortage of both.
Joseph Kelley of Montauk, a long-time watcher of town government, said that in setting properties aside for open space there would be less and less available when the younger generations wanted to build homes of their own. He cautioned the board not to depend too much on the "congratulatory comments" at the hearing.
Who Will Benefit
"Who is this land going to benefit?" June Laufer of East Hampton asked. "The Town Board has steered policy toward the summer people and toward the rich. The service people are being squeezed out."
Town Board members countered that the transfer tax specifically contained a provision to exempt affordable housing and affordable land. As for taxing higher priced real estate sal es, Councilman Thomas Knobel said "for $350,000 it's fair to expect a $2,000 donation for a better East Hampton."
"It's the right thing to do," East Hampton Village Mayor Paul F. Rickenbach said. The village completed its own open space plan this spring and would like the town to consider using money from the community preservation fund to help purchase some of its priority parcels.
Village's Stake
Real estate sales in the village will also be subject to the 2-percent surcharge, and Mayor Rickenbach suggested an intermunicipal agreement to assure that the village shares in the proceeds of the tax.
He asked that an acquisition plan required as part of the legislation include properties from the Village Open Space Plan, that the seven-member advisory board charged with overseeing open space purchases include someone from the village, and that the village or a mutually agreed upon third party manage any acquisitions within the village.
According to the Mayor, real estate sales in East Hampton Village over the past year accounted for 38 percent of the total sales in the Town of East Hampton; the village represents 20 percent of the total taxable value of the town. Mayor Rickenbach suggested a formula for spending from the community preservation fund be worked out based on these figures.
First, The Governor
The Town Board still has its fingers crossed that the Governor will put his pen to the legislation. Board members will rescind their approval of the local law, which was conditional on Governor Pataki's signature, at a special meeting today at 2 p.m. in the Town Hall conference room, and will pass a second resolution approving the local law only if the Governor signs the legislation.
"The proper order of things would be for the Governor to sign the legislation then for the town to act," Assemblyman Thiele said yesterday. Down the line, "you want to avoid the argument that the Town Board didn't have the authority to enact the local law." But, he added, "the bottom line is, if the Governor doesn't sign it, there's not going to be a referendum anyway."
However, after speaking with the Governor's office yesterday afternoon, Assemblyman Thiele said he was optimistic the Governor would sign the legislation on time.
Other Business
In other recent business, the Town Board:
Appointed Eileen Roman Catalano of Accabonac Road to the Springs Citizens Advisory Committee for the rest of the year.
Appointed Peter Garnham to fill a vacant seat on the Town Open Space Committee, on the recommendation of the Amagansett Citizens Advisory Committee.
Retained Cameron Engineering to oversee the modifications to the chemical storage tanks at the town scavenger waste treatment plant on Springs-Fireplace Road in East Hampton. The work will be done by the Deer Park company Fenley and Nicols Environmental. Cameron Engineering prepared a contract, plans, specifications, and bid documents on the project for the town.
Authorized additional payments to consultants on two recently completed studies. Abeles, Preiss, and Shapiro of New York, and Land Ethics of Annapolis, Md., the groups that conducted the Amagansett Corridor Study, exceeded the $55,000 budget by $1,220.42. The transportation component of the Town Comprehensive Plan, prepared by L.K. McLean and Associates of Brookhaven, will cost the town $9,120 more than the anticipated $136,600.
Denied mobile home permits to Andrew Ingraham for his Lazy Point Trailer Park on Merrill's Road, and to Theresa Streibel for the Three Mile Harbor Trailer Park. Both have been the subject of tenants' complaints.