Where It Goes;Whence It Comes

The value of property in East Hampton Village, Wainscott, and Amagansett continued to increase this year, but in Springs and Montauk it showed little or no change. The Town Assessors' office completed the 1996 assessment roll recently.

One conclusion to be drawn from the apparent stagnation in Montauk and Springs, said Fred Overton, the senior assessor, is that property values in those communities, inflated by high sales prices in the late 1980s, have finally settled at their proper levels.

In practical terms, an increase in total assessed value means the town and schools can spend more money without raising taxes. Conversely, a decrease in assessed value means a community will have to pay more in taxes, even if spending stays the same.

Townwide, the assessed value of property in East Hampton is $150 million, a fraction of what it is worth on the open market. Like many other towns in New York State, East Hampton does not assess on a full-value basis.

In real market terms, using a state equalization formula, the town's taxable property is worth $5.7 billion, an increase of about 1 percent over last year.

When tax-exempt property is included, the town's assessed value jumps to over $162 million and its actual worth to over $6 billion.

Properties in the East Hampton School District, which includes the incorporated village, showed the highest increase in assessed value between last year and this of any place in town, rising 2.6 percent to $72.5 million.

Many Springs Grievances

The value of property in Amagansett rose 1.5 percent to $23.3 million. There was a 1-percent increase in Wainscott, to $8.9 million. Sag Harbor property, assessed at $4.3 million, stayed about the same.

Springs property is assessed at $22.7 million, an almost imperceptible decrease from last year of .002 percent. In Montauk the assessment stands at $32.8 million, a bare .003 percent over last year.

According to the Assessors' Office, 180 Springs property owners successfully challenged their assessments this year, reducing the district's taxable value by a total of $164,000. That is the equivalent of over $6 million in real market value, which easily outpaced the value of new construction in the hamlet.

The successful grievances were a major reason why the property value of the hamlet as a whole did not increase, said Mr. Overton.

Overassessed

In arriving at a town's equalization rate, the state analyzes sales in each school district, usually from the previous two or three years. That practice, Mr. Overton said, led in the last decade to a rash of assessments that proved, through no fault of the town, too high.

In the mid- to late 1980s, the peak of the local real estate boom, new houses were selling at peak prices. This was reflected in the equalization rate, which was set in the 5 percent range.

As the housing market began to decline, the rate was adjusted downward slowly. It is currently 2.63 percent.

With the drop in sales prices, however, came an inequity in the assessment of houses built or sold during the boom years. As Mr. Overton put it, "In the '90s, things tapered off. Values came down, but assessments didn't."

There were a record number of grievances filed in 1993, '94, and'95, and many were successful.

Boom Years Ended

"It was a tough situation," Mr. Overton said. "We try to put up every dollar of assessed value we can, but there was good evidence some of them were too high."

In the mid-'80s, on the other hand, when East End property began soaring, the equalization rate was relatively low, based on sales made earlier in the decade. As a result, townwide assessed values climbed, allowing school districts, for example, to raise their budgets without raising the school tax.

"They were boom years for the schools in the '80s," said Mr. Overton.

However, things have stabilized as the equalization rate adjusts to the current market. "That's why Springs is in trouble now," he said of the hamlet with the highest tax rate in the town.

Valuable Amagansett

Lot for lot, according to the assessors' figures, Amagansett has the most valuable property in town. The average parcel, including developed and undeveloped land, commercial and residential, is worth $316,000.

In the East Hampton School District, the figure is $308,000, followed by Wainscott, $284,000; Montauk, $236,000; Sag Harbor, $174,000; and Springs, with the lowest average in town, $158,099.

East Hampton Town has 24,669 taxable parcels altogether. The average parcel townwide is worth about $254,000.

Springs Taxes

Some Springs School officials have blamed the district's high tax rate on the fact that the hamlet has relatively little commercial property, but Mr. Overton disputed that.

Residential development, he said, can often yield more tax dollars than commercial. "You're probably better off with two houses on a parcel than a commercial establishment, assessment-wise," he said.

Reginald Cornelia, the Springs School Board president, noted nevertheless that "restaurants don't put kids in the school." He has proposed that East Hampton Town's commercial tax base be split among its school districts.

"We have 34 percent of the population and only 2 percent of the commercial tax base," said Mr. Cornelia. "We spend our money in those stores."

"Springs by choice didn't want commercial property," said Mr. Overton.

No Ocean

One reason the average parcel in Springs is worth only half the average in East Hampton Village or Amagansett is the absence of oceanfront property and other prime south-of-the-highway real estate.

"We don't have a Montauk Highway, and we don't have an Atlantic Ocean," Mr. Cornelia said ruefully.

Unlike Springs, with its many successful grievances, oceanfront property in East Hampton Village and Amagansett has maintained its value, according to the assessors. "In fact, it increased," Mr. Overton said.