The Real Deal New York

The Hamptons go condo

By John Celock | October 23, 2007 12:22PM

Changes in long-held land-use polices are allowing for a limited amount of condominium development on the East End of Long Island.

Several developers have started to move forward with projects in Sag Harbor, Westhampton and Montauk in order to appeal to empty nesters and young professionals in the area. To do so, they have had to overcome a series of land-use and health laws that have restricted East End condo development.

Many of the new condominium units are conversions of existing buildings and hotels.

Distinctive Ventures is in the process of converting the Panoramic View Hotel in Montauk into 76 high-end condos. The firm is also developing 10 condos, each 4,000 square feet in size, along the bay and marina in Westhampton Beach.

The Shepherd’s Nook Inn in Montauk is also being converted to condos.

Some condominiums already exist out on the East End. Montauk Manor, for example, is a combination condominium/hotel.

In Sag Harbor, Case Advisors has plans to convert the Bulova Watch Factory site into 81 condos, part of the estimated 120 condo units being constructed in Sag Harbor.

“Primarily there are few places zoned for condominiums,” Krae Van Sickle, senior managing director of the Corcoran Group office in Montauk, said of the historically few number of condos on the East End. “It is a heavily regulated environment.”

The low-lying land of Suffolk County has driven land-use laws away from clustered housing. Public health officials have feared that dense housing, such as condominiums, could put an undue burden on septic systems and increase nitrogen levels in the bays and oceans. With an active commercial fishing industry on the East End, increased nitrogen in the water would harm the fish and hurt business.

In addition, Van Sickle said there has been concern condos would not fit in with the waterfront vistas in Montauk. But developers have been working to address public health and historic preservation issues, and there has been increased interest from buyers.

The Panoramic Villas project in Montauk was developed in order to generate more revenue from the seasonal oceanfront hotel. Adam Manson, director of Distinctive Ventures, which is based in Great Neck, New York, said the company wants to market to East End residents looking to live in a hotel atmosphere, along with Manhattan residents wanting to own a piece of the Hamptons without having to maintain a home.

“Unfortunately, home ownership is not always enjoyable,” Manson said.

The Panoramic Villas will include an indoor fitness center, heated pool with waterfall, recreational rooms for billiards, cards and watching sports, a concierge, housekeeping, personal trainers and massage therapy. The conversion project began work in January and phase one will be completed in the fall, with phase two scheduled to be completed next summer.

In Westhampton, Distinctive has taken the five-acre site of the Harborside Hotel and is converting it into 10 units with rooftop hot tubs and hotel services, which will be known as Bay Point Yacht Club. Manson said Westhampton has a reputation among Manhattanites as a top place to have a vacation home.

“The buyers [in Westhampton] are young families and current condo owners looking to increase their bedroom count,” he said.

Compared with other areas on the East End, Sag Harbor has become a hub of condo development, with several projects already constructed and others in the planning stages. Gioia DiPaolo, senior vice president with the Corcoran Group’s Sag Harbor office, said she has seen many empty nesters expressing interest in living in village condos, along with weekenders looking in the area.

The majority of Sag Harbor condos are located in the Village proper, allowing for increased pedestrian access to local shops and restaurants. DiPaolo noted that with the marina in town, she has also seen interest in condos from sailors who are looking for a permanent place to stay when on the East End.

She said a new waterfront development across the bridge from the Village has had a slow start because of the distance.

The centerpiece of Sag Harbor condo development is the Bulova Watch Factory conversion. According to David Kronman, project manager for Cape Advisors, the project has been zoned for condos since 1981, but work has only started in recent years because environmental cleanup concerns have delayed construction. While zoning is restrictive in Suffolk County, Kronman noted that the process is moving forward for Cape Advisors and ground will be broken in approximately 18 months.

The current delays for the Bulova conversion project come from finalizing local land-use approvals and filing environmental statements with the State Attorney General’s office for construction to proceed.

“I’m surprised that we’ve gone this long without more condos,” DiPaolo said. “They make the most sense in resort areas.”

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