On Sept. 16, the so-called gas ball lot, home to approximately 93 parking spaces in the Village of Sag Harbor, will come under the control of Adam Potter’s 11 Bridge Street L.L.C. Unless the village works with him to keep the lot open, Mr. Potter said on Tuesday, he will “shut its gates” that day — the first day of the annual Harborfest celebration.
“I vehemently believe that the lot should remain open for the public,” he said in a phone call.
In the past, the village had leased the lot from KeySpan Energy, since 2016, for $1 a year. On July 21, however, the New York State Public Service Commission awarded it to the L.L.C., after Mr. Potter outbid the village for the 99-year lease. He offered to pay $40,000 annually to KeySpan for the first 10 years of the lease, and $50,000 annually thereafter, with periodic increases.
Since then, he has turned around and has offered to lease the lot back to the village, for his cost. Thus far, the village has balked at the notion of paying at least $40,000 annually for a short-term lease with no long-term plan.
Complicating the standoff is a Catch-22: According to village code, private standalone parking lots are not permitted; they must be attached to a primary use, like a store or restaurant.
“If the village doesn’t want to lease it and I can’t open it, then my only other option is to shut the gate,” said Mr. Potter.
“He offered us a one-year lease while he goes through the process of his application,” said Mayor Tom Gardella in a phone call. “That’s not in the best interests of the village.” Mr. Potter recently submitted plans for a mixed-use housing, retail, and community center complex, including a public park. Code requires 235 parking spots for the development, but only 40 are proposed. The gas-ball lot would help bring Mr. Potter closer to code, though still more than 100 short.
“If he’s going to close it off, that’s his doing,” said Mayor Gardella. “The question is, why did he put up $400,000 for a parking lot he knew he couldn’t use? He’s holding municipal parking hostage so he can get permission do his project. If he closes it off, he’s shut out people that work and live on Main Street.”
A month after the public service commission determination, Mayor Gardella and the village board voted unanimously to retain the Manhattan law firm Hodgson Russ to petition the comission to review it.
In an Aug. 15 petition, Hodgson Russ argued that the success of the lease was dependent on Mr. Potter’s real estate development. “The Lease leaves KeySpan’s ratepayers with long-term risks and deprives the Village of a public benefit in exchange for a quick infusion of $400,000, and the hope that the Lessee’s speculative real estate venture will enable the Lessee to honor the Lease throughout its 99-year term.”
The firm asked the commissioners to annul the lease, arguing that they should not have ignored the challenges Mr. Potter faces under the village code.
Apart from the zoning issues, the lawyers hinted that Mr. Potter could not be counted on as an environmental steward of the parcel. As part of its environmental remediation of the lot, overseen by the State Department of Environmental Conservation, KeySpan is required to continually monitor the site. “Given KeySpan’s long-term [site management plan] commitments, reliance on the Lessee to assume responsibility in the event of an unexpected environmental condition is more wishful than realistic,” said the petition.
In a memorandum filed with the P.S.C. on Sept. 1, Tiffany Scarlato, a lawyer representing Mr. Potter’s L.L.C., wrote that “The danger that the Village senses in the Lease appears to be connected to the ability of the Lessee to obtain necessary approvals for a project that proposes to use this parking lot as mitigation for the impossible parking requirements the Village uses to boorishly control zoning. This oddly judgmental concern has no bearing on the Lease and is a zoning issue to be resolved locally, not by the P.S.C.”
Ms. Scarlato added that the village had a “rabid desire” to obtain the lot, and described Mr. Potter’s plans for the complex as “an undeniable benefit to the community.” Despite “typical NIMBY public opposition,” she said, Mr. Potter was determined to advocate for housing in the village.
“This Petition for rehearing, which would give parking to a sorely needed affordable housing proposal, is yet one more avenue and excuse for a wealthy Village to continue to exclude affordable housing proposals from the area,” she wrote.
Residents feel caught in the middle. In the last public comment published to the P.S.C. file on July 31, Carol Scott, a village resident, expressed dismay that the P.S.C. had awarded the lot to the L.L.C.
“SHAME SHAME SHAME on you and your fellow representatives!! I can only imagine what went on behind closed doors!” she wrote.
“I’m open to all suggestions,” said Mayor Gardella. “I’m not shutting the door on anything, but we need a long-term solution. I’m not going to have that lot used to pressure any decisions we make.”
