Southampton Town, Village Faced With Unprecedented Joint Meeting On Redrawing Boundaries, Tax Impact May Be Minimal

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The Southampton Village Board is slated to meet with Southampton Town Board members on town turf today, May 9, for an unprecedented joint public hearing at Town Hall to discuss a possible redrawing of the town-village boundary that runs through the middle of a 13-acre parcel of land slated for development into a condominium complex.

George Benedict, the developer of Bishops Pond, the 77-unit complex currently being built on Bishops Lane, is asking both municipalities to agree to let the village annex 8 acres of land currently within the town but outside the village lines. If approved by both boards, all 13 acres of the property would be within village limits.

Annexation would potentially simplify its development by eliminating calculations for tax bills to two different municipalities, streamline emergency response, and limit future dealings to one building department, according to attorney David Gilmartin Jr. of the Bridgehampton firm Farrell Fritz P.C., who represents the developer, Beechwood Benedict Southampton LLC.

Although redrawing the boundary would make it easier for both the developer and the future condo residents, there would be a negative impact on tax revenue for the town.

Mr. Benedict—who is Southampton Village Mayor Mark Epley’s father-in-law—and the Beechwood Organization, a Jericho-based developer of residential housing, are partnering to propose 77 condominium units, a mixture of owner-occupied townhouses and apartments, spread throughout 14 individual buildings.

The project is a transformation of the former “Rambo Pit,” which was owned by James H. Rambo Inc. and used as a recycling facility, soil transfer station and composting. The Bishop Pond site plan has received widespread support from neighbors and local officials, and in 2011 it received final approvals from both town and village boards. Some units are currently being built.

Moving the village border would address a somewhat awkward situation: as currently configured, 50 of the units would be located on the Southampton Village portion of the property, while 27 would be within town limits.

According to Mr. Gilmartin, the property should be under one entity in order to avoid confusion of who should respond in an emergency situation, most importantly, and would also limit tax bills and government dealings to one municipality. “The village has the infrastructure—police and ambulance—that would better serve this lot,” he said.

In an emergency, four Southampton Village Police officers could get on site in a couple of minutes, while only one town officer would be assigned to that sector, he said. Additionally, the Southampton Village Volunteer Ambulance, headquartered on Meeting House Lane—1.7 miles away—would have a straight shot to the community.

“Health and safety-wise, it is far better for the village to handle it,” Mr. Gilmartin said.

While redrawing the boundary to benefit Bishops Pond residents might make sense logistically, Southampton Town Supervisor Anna Throne-Holst said she has concerns. Excising the 8 acres would cost the town more than $28,000 in property tax revenue for the town.

“There’s no question about it,” she said. “Succeeding acreage and asset by default goes off our tax levy—not completely—that part gets taken up by the village levy. I’m not sure it’s significant, but it’s something to consider.”

In 2012, Beechwood Benedict Southampton hired consultant and former sole assessor for the town, Edward Deyermond, to conduct a tax impact analysis, which concluded that the impact to the Town of Southampton would be minimal or non-existent.

The site is currently assessed at $5.4 million and produces approximately $47,733 in property tax revenue for the town each year, Mr. Deyermond said.

Anticipating that the parcel of land would be assessed at $61.6 million by its projected completion date in 2015, and 27 homes would be located in the town part of the property, Mr. Deyermond said that the assessed value of the town condos would be approximately $21.6 million of that pie and would bring in about $189,974 in tax revenue. If annexed, the property would still be taxed by the town, but at the “part town rate,” and bring in approximately $161,626 each year in tax revenue.

Mr. Deyermond said that the fire district and ambulance district would provide service to the property whether or not the annexation occurs, so tax revenue that the districts would lose from the town would be made up by tax revenue distributed from the village.

While Mr. Deyermond said the impact would be minimal, Ms. Throne-Holst said it’s still something to consider, along with the impact annexation would have on future developments.

“It’s not so much about acreage as it is about asset base and whether other property owners will petition to do the same,” she said. “On the other hand, this situation is very unique—the property is in single ownership but straddles both the village and town.”

Mayor Mark Epley echoed Ms. Thone-Holst on Tuesday, saying it could set a precedent—but the situation is unparalleled.

“It will be up to the representatives to be able to come and state their case as to why this would benefit everyone,” he said, adding that he believes the Village Board members would support the annexation. He said he would recuse himself from voting on the proposal since he is related to the developer. “I am getting guidance from my attorney [on whether] I should actually leave the room,” he said. “I don’t want anything to be misconstrued.”

Ms. Throne-Holst said it was her intention to have more than one hearing on the proposal in order to have “enough time to make sure a well-thought-out decision is made.”

According to state law, if the two municipalities agree on the annexation terms, a vote must be held of all affected property owners, which in this case would only be Beechwood Benedict Southampton. If there is disagreement about the annexation following the joint hearings, the issue could be heard by a state appeals court, which will issue a determination of whether the annexation should be allowed.

“It’s a very unusual thing from a pure public policy and historic perspective,” Ms. Throne-Holst said.

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