Westhampton Beach inn to reopen as luxury hotel

Long Island-based developer persuades Suffolk County to grant tax breaks

Five Pointe Real Estate's Corey Gluckstal with 7 Beach Lane (Five Pointe Real Estate, Douglas Elliman)
Five Pointe Real Estate's Corey Gluckstal with 7 Beach Lane (Five Pointe Real Estate, Douglas Elliman)

The way things are going, dated hotels on the East End are going to be, well, a thing of the past.

In the latest example of developers giving an aging property a makeover, Long Island-based Corey Gluckstal and partners will restore and reopen the Grassmere Inn, a Victorian built in 1885. It’s an $11.6 million project, Newsday reported.

The developers, led by Gluckstal of Five Pointe Real Estate, will get some of that money back in tax breaks, having persuaded the Suffolk County Industrial Development Authority that the project would not otherwise be viable. Its lawyer cited inflation, interest rates and a possible recession as a rationale, according to the newspaper.

Gluckstal wrote on LinkedIn that the project has been approved and construction on the 16-key, “ultra-luxury” hotel will start this fall.

The establishment appears to have closed recently, as its latest customer review was posted just four months ago. Douglas Elliman listed the property for $2 million after an attempt to sell it for $2.55 million in 2019 failed.

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The Elliman listing touted the inn as “perfection” but the new owners saw a lot of room for improvement. They will install a steel skeleton to stabilize the main building as part of a $6 million renovation that preserves its Victorian features, and replace a five-decade-old annex and cottage with a modern, amenity-laden annex.

In a best-case scenario, the hotel will reopen next year. Its owners promised the county it would create 14 jobs within two years in exchange for $704,385 in tax breaks, which received unanimous preliminary approval from the IDA board, according to Newsday.

Industrial development authorities have been criticized for subsidizing projects that would have happened anyway, and it is not clear how the benefits awarded at 7 Beach Lane are crucial to its viability. But a Suffolk County official told the newspaper that hospitality space is sorely needed in Westhampton Beach.

The official, IDA executive director Anthony Catapano, told the publication the hotel is in “one of the most sought-after portions of the Hamptons due to its ease of access and world-class beaches.” Generally, subsidies are needed for projects that have major disadvantages, such as contaminated soil, not for coveted locations such as a world-famous playground for the rich.

The revamped hotel will total 9,250 square feet, slightly more than what stands now. Room rates figure to be substantially higher, per the business model for overhauling aging Hamptons and North Fork hotels.

Recent, ongoing and future projects in that realm include fixups of the Silver Sands Motel, the Menhaden, the Sunset Motel and Soundview Inn in Greenport; the Pridwin Hotel on Shelter Island; and Gurney’s Montauk Resort.

Also, Stacey Soloviev, ex-wife of Sheldon Solow’s heir Stefan Soloviev, is planning a 40-key hotel on her Peconic Bay Vineyard in Cutchogue.