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Feb 25, 2014 11:54 AMPublication: The Southampton Press

Investment Banker Sues Southampton Town Planning Board, Farmers Over Barn Denial

Mar 5, 2014 11:31 AM

A millionaire investment banker is suing the Southampton Town Planning Board, and its farmland-use advisory committee, for $20 million after members twice denied his request to build a barn on 40 acres of Bridgehampton farmland that he purchased for more than $15 million.

Cantor Fitzgerald CEO Howard Lutnick bought the Halsey Lane property in 2003 and has been using it largely as the backyard to his estate since that time, adding a baseball diamond and playground. At the opposite end of the fallow farmland is a small apple orchard, and Mr. Lutnick has said that he would like to start a small vineyard on his land.

In 2007, consultants for Mr. Lutnick sought permission to build a 11,200-square-foot barn on the property—and, on two separate occasions, were denied by the Planning Board. Board members, on the basis of the agricultural committee’s recommendation, said Mr. Lutnick could construct a 2,400-square-foot barn on his land but only if he first removes the baseball field and playground.

The lawsuit that attorneys for Mr. Lutnick filed in response stands out amid the parade of such legal challenges to other decisions made by the Planning Board in that it lists all seven members of the board, as well as the 17 members of the town’s Agricultural Advisory Committee, as defendants, individually. The suit, which seeks $20 million in damages, implies that the individual members of both boards should be held personally responsible for the losses incurred by the plaintiff and applicant.

“It’s not your run-of-the-mill Article 78,” Town Attorney Tiffany Scarlato said of the lawsuit, referring to the term for the typical suit that challenges a decision by a municipal regulatory board. “They are potentially alleging that there is some individual liability.”

But she was quick to point out that members of both boards, since they were serving in their official roles, would be indemnified against any legal damages sustained by the town. She also suggested that such a lawsuit was nothing more than a tactic to intimidate board members and perhaps influence them to change their minds on the barn application.

Ms. Scarlato also said the town will be handing over the defense of the case to an independent legal firm, Devitt Spellman Barrett in Smithtown.

The property in question is a reminder of Southampton Town’s earliest—and, apparently, least savvy—efforts at preserving farmland. An easement was placed over the 40 acres as part of the creation of a subdivision on another 39 acres that, at the time, belonged to Raymond Wesnofske. It was the first such easement the town ever sought as part of a subdivision development.

In the lawsuit, Mr. Lutnick’s attorneys argue that the covenants placed on the land, with the intention of keeping it mostly open, still permit a number of other possible uses, including the construction of a single-family house, recreational amenities, landscaped open spaces or agricultural uses—as well as any structures that might be appropriate to support them. As recently as 1996, both the Southampton Town Board and Planning Board appeared to have confirmed those potential uses, the suit claims, in connection with another application for development of the property that was never followed up on.

In decisions in 2001 and again in 2012, following a modification of the application for two smaller barns, the Planning Board and farmland committee gave the nod to a much smaller barn but said that the playground and ball field were inappropriate uses. They also ruled that the 3-acre apple orchard was not large enough to constitute the sort of commercial agricultural use that would justify the construction of a large barn.

The lawsuit, however, notes that the Planning Board permitted the construction of a 19,300-square-foot barn on a neighboring property that measures just 13 acres total.

Planning Board members contacted this week declined to discuss Mr. Lutnick’s application or the lawsuit, though all said this marks the first time that they’ve been personally listed as defendants in litigation.

“My first day on the Planning Board, going back to 1993, they told me to make sure I wore a jacket and tie, because there would be a reporter there who might want to take my picture,” Planning Board Chairman Dennis Finnerty recalled this week. “I showed up in my jacket and tie, and a guy came over to me and said, ‘Are you Dennis Finnerty?’ And when I said yes, he served me.

“I hadn’t even gotten into the board room for the first time, and I got sued,” he continued. “So, it’s part of the landscape. But it’s usually the board getting sued, not the individual members.”

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Gee, Howard - your barn is too big - your orchard is too small - your ball field is inappropriate - but your tax check is always cashed. Sue their pants off until they get "too tight".
By kjmraven (19), East Quogue on Feb 28, 14 8:13 AM
1 member liked this comment
His tax bill is pennies on the dollar for this "ag-only" back yard he has.
By Nature (2966), Hampton Bays on Feb 28, 14 9:22 AM
2 members liked this comment
Sue the towns pants off. The town let pumpkin Ville on Montauk Highway in Water Milll build a giant storage building to expand their Disney World like Halloween exhibit. No farm equipment in those sheds nor is there any in most of the new ag buildings all over the village. These building are being rented to contractors and landscapers. The town will lose this lawsuit they have always been very arbitrary when it comes to ag structures
By chief1 (2800), southampton on Feb 28, 14 9:07 PM
2 members liked this comment
MS Scarloto points out that this is a "Tactic". This "tactic" of attacking this town with lawsuits in order to achieve a self serving personal gain, with no regard to the respect of zoning, laws, covenants or respect for terms and conditions that are in place for the protection of the environment must be stopped.
By 007 (45), East Quogue on Mar 1, 14 7:05 AM
1 member liked this comment
Saving the environment? Farmland by far has been the biggest polluter of farmland. Just ask anyone who has well water near a farm about their Temik filters. Scarloto is barking up a losing tree.
By chief1 (2800), southampton on Mar 1, 14 3:55 PM
Saving the environment? Farmland by far has been the biggest polluter of farmland. Just ask anyone who has well water near a farm about their Temik filters. Scarloto is barking up a losing tree.
By chief1 (2800), southampton on Mar 1, 14 3:56 PM
"Some rich men came,
and raped the land.
Nobody caught 'em.
Put up a bunch of ugly boxes,
and Jesus, people bought 'em."

~ The Eagles, "The Last Resort" (Hotel California, 1976)
By Mr. Z (11847), North Sea on Mar 1, 14 5:36 PM
There are rules, laws and regulations. And there are those who believe they are above the law -- especially when they have the money to make their own. Here's a classic case of one of the "master's of the universe", the 1% OF THE 1%, who wants what he wants and will do anything to get it, the town and people of Southampton be damned. Shameful.
By Beyonce (2), Southampton on Mar 3, 14 10:19 AM
We have a drug epidemic going on, illegal aliens, health care issues, and we want to butt heads with a guy who wants to build a barn? What a joke this country is becoming.
By chief1 (2800), southampton on Mar 3, 14 1:50 PM
1 member liked this comment
So, judging by your logic, the Planning Board should be considering "illegal aliens, health care issues and drug epidemics?"
By Nature (2966), Hampton Bays on Mar 5, 14 12:06 PM
There has always been a "drug epidemic." In the 1950s and 60s it was heroin. When I was in high school it was weed, LSD and amphetamine pills, then powdered amphetamine (Remember "Speed Kills"?) Black beauties. Reds. Quaaludes. We survived.

Then it was cocaine. Then it was crack cocaine. Then it was methamphetamine. All along this time period, people were skin popping and mainlining heroin. Remember AIDS? All those heroin addicts? Then it was Vicodin and OxyContin. Then people confused ...more
By btdt (449), water mill on Mar 8, 14 8:45 PM
Legal rights agreed to by two parties cannot later simply be ignored by one of them. For the Town Attorney to make these types of comments indicates an institutional prejudice against this property owner. For the Boards in this Town to not do their homework and issue poor decisions is bad enough; but for the Town's chief legal adviser to allege "coercion" exposes the Town's own bad advice. Tell us you didn't really say this, Tiffany. Or was there pressure from above?
By hamptonyte (14), Southampton on Mar 3, 14 5:41 PM
I sure wish that the folks in East Hampton would be so steadfast. The sprawl of Amagansett is getting out of hand. Next up, a trashy 7-11. I'm sure a White Castle will be sure to follow.
By Open Book (11), EH on Mar 4, 14 11:14 AM
1 member liked this comment
Yeah. Another 7-11 that nobody wants - just like the one in Montauk. Did anyone notice the 7-11 in Montauk is the busiest one in the country? Kind of amazing for a store that no one wanted.
By VOS (1241), WHB on Mar 4, 14 3:02 PM
1 member liked this comment
I love White Castle
By joe hampton (3461), south hampton on Mar 9, 14 9:39 PM
So the guy wants to build a 11,200 foot barn on 40 acres. Typical Town of Southampton trying to prove a point. Who really cares if there is a barn there? Proportionately, It is like me erecting a dog house on my property. They will lose. Property owners still have rights. Has the Town ever won a lawsuit?
By The Real World (368), southampton on Mar 4, 14 2:21 PM
The Real World - I think he has received a huge reduction in taxes because it couldn't be built on.
By dnice (2346), Hampton Bays on Mar 4, 14 7:08 PM
1 member liked this comment
Let's not let Wall Street morals win on this one, too.

The deal was that the land would not be built on. While standard Street ethics deem the terms of a signed deal to be infinitely malleable to later coercion, we don't subscribe to the Street moral code out here - - - yet.

The board should hire competent counsel and defend to a final judicial determination - - or it could save money and issue a proclamation that residents whose net worth exceeds a certain minimum are exempt ...more
By highhatsize (4217), East Quogue on Mar 4, 14 6:55 PM
If the covenants allow recreational facilities they would seem to allow a ball field. When they allow agricultural uses and their appurtenant structures, how can anyone deny an orchard, vineyard and barn? The guy's tax returns are really immaterial here. Unless there is a whole lot more information that goes against him what is the board thinking? Is someone at Town Hall just looking for another big payday for their lawyer friends from Smithtown?
By VOS (1241), WHB on Mar 4, 14 11:15 PM
2 members liked this comment
It's been a long time since he first developed it, but if I remember correctly HHS and dnice are correct that the land was not to be built on.
By Mr. Z (11847), North Sea on Mar 4, 14 11:27 PM
hey dnice, so let him build it and bang him for back taxes and more taxes moving forward. Nothing needs to be etched in stone. All man made issues. Things can change. The Town does it all the time.
By The Real World (368), southampton on Mar 5, 14 7:42 AM
The Real World - I would have no problem with back taxes if the use changed.
By dnice (2346), Hampton Bays on Mar 5, 14 1:46 PM
Two things (both not in defense of his lawsuit which I think is being done for initimadation purposes - but wanting to point them out).

The Town's demands that he remove the baseball field and playground are ridiculous. Neither are defined as "structures" in Town Code, so I don't understand how they could possibly be legislated. The baseball field doesn't have any fencing or benches or dugouts or other related structures. It's dirt paths and some bases.

Secondly, while it's ...more
By Nature (2966), Hampton Bays on Mar 5, 14 9:50 AM
Oh and he's not on the Forbes Billionaire list and the little research I could do indicates he's no where near billionaire status - but I guess it makes it easier to villify him if the paper reports his as a "billionaire"
By Nature (2966), Hampton Bays on Mar 5, 14 10:00 AM
The headline and article have been corrected to reflect that Mr. Lutnick is not, in fact, a billionaire. According to several publications, his net worth is approximately $45 million.
By Bill Sutton, Managing Editor (117), Westhampton Beach on Mar 5, 14 11:16 AM
Thanks for the (delayed) responsible journalism. Can't believe I've restorted to defending filers of frivelous lawsuits!
By Nature (2966), Hampton Bays on Mar 5, 14 11:30 AM
Thank you Nature for the factual correction, and also for your thoughtful post above about the strong links in Mr. Lutnick's chain of life.

One possible hitch in concluding that this lawsuit is frivolous, however, is that Southampton Town has permitted many other structures on preserved land, notably the horse barns at Lauerville on Deerfield Road, and at Pumpkin Town on 27, among others. These visible commercial uses have, for better or worse, set us on a course of precedents, the end ...more
By PBR (4956), Southampton on Mar 5, 14 11:55 AM
You're assuming that the rules for the lawsuit in the articles are the same as the ones for Matt Lauer. They are not due to the restrictions placed upon these lots.

I don't know the details of the Lutnick property but from the article it appears that the development rights weren't stripped from the lot, but rather an easement was placed on the property prohibiting certain things.

That's different than when development rights are purchased off of a piece of property. You're also ...more
By Nature (2966), Hampton Bays on Mar 5, 14 12:04 PM
This week's Press has just been posted online, and the main editorial is an interesting read on these issues. Subscribers to the print edition can access this via the home page here at 27east.

In part the editorial says, "Given an inch, homeowners have been lunging for miles," and concludes, "As the latest lawsuit demonstrates, for all the successes of preservation efforts, there is still work to do closing the proverbial barn door, even though the horses are out roaming."

Well ...more
By PBR (4956), Southampton on Mar 5, 14 3:23 PM
1 member liked this comment
Somehow I doubt that if we came to their home (so to speak), threw a party, and trashed just about everything that made it special they probably wouldn't like it...
Mar 6, 14 11:20 PM appended by Mr. Z
No farms, NO FOOD.
By Mr. Z (11847), North Sea on Mar 6, 14 11:20 PM
to Nature:

Whatever vicissitudes in life and in business that Mr. Lutnick may have overcome and regardless of his benevolent behavior otherwise, this suit is stereotypical legal thuggery. It reflects the standard Street attitude towards the relationship between law and money and would shame anyone whose moral formation is determined by principle rather than pragmatism.
By highhatsize (4217), East Quogue on Mar 5, 14 12:33 PM
2 members liked this comment
The editorial referenced above refers to "preserved 'farmland' or 'open space' as nothing more than added acreage to a private fiefdom."
By PBR (4956), Southampton on Mar 5, 14 3:31 PM
Please explain to me how the town has no problem with pumpkin town and it's ag buildings for its disney world like attraction. Please explain to me how the town is allowing ag buildings to pop up all over and they are being used for storage for landscapers, furniture storage, or auto storage? The town is yet again using arbitrary enforcement on its own citizens.
By chief1 (2800), southampton on Mar 5, 14 6:25 PM
The land is legally protected. No one questions that - except for Lutnick - who has been employing high-priced lawyers for years to intimidate the town into looking the other way. The Board's decisions have bravely upheld the law in the face of his coercion, and in so doing, have protected the rights of the town and its residents.
By Beyonce (2), Southampton on Mar 6, 14 12:36 PM
I question it. There is nothing clear in the article about what is or is not permitted and to what extent. It says recreational us is allowed, so why require the removal of the ballfield and playground? You can't get more recreational than that. Agricultural use is also permitted; is there a distinction that some types are not?

He's not saying he can build an apartment building, he's asserting the covenants allow the type of improvements he is proposing. He may be right or wrong ...more
By VOS (1241), WHB on Mar 8, 14 11:55 AM
Over ten years ago I met a man who was still suffering the effects of witnessing the murder of his brother and hundreds of his colleagues, all casualties in our new war. On the day I met him, Howard Lutnick was functioning as a guide for some attorneys at Skadden Arps who had volunteered to help the Cantor families decide between the courts and the Victim Compensation Fund. I was the exception, a Long Island attorney with a different perspective. I went through with Howard my concepts on the ...more
By Lawrence Kelly (4), Bayport on Mar 7, 14 6:06 PM
I don't doubt your testimony Mr Kelly but he should be made to follow the same rules as everyone else on the east end, even if the rules suck.
By dnice (2346), Hampton Bays on Mar 7, 14 10:58 PM
to Lawrence Kelly:

What a shame that a man who behaved so admirably with his employees and colleagues chose to behave so deplorably with his neighbors.
By highhatsize (4217), East Quogue on Mar 7, 14 10:54 PM
1 member liked this comment
Driving around the streets that surround this property, there is hardly a view of it, all I see is a privelaged benefit to the few who live around it. The house looks large but hidden in the back you could build 5 of them and probably still only get a glimpse. There is no public benefit here. Not granting a 11,000 sf barn after allowing that monstrosisty Lauerville to be constructed is just ludecris. It truelly seems that the planning boards rulings are arbitrary not to mention a few other barns. ...more
By North Sea Citizen (568), North Sea on Mar 8, 14 7:09 AM
1 member liked this comment
to North Sea Citizen:


"I belive ... the case will sting the town in the pocket as this lawsuit will be time consuming and costly ... [T]his will cost the town lots and lots of money ..."

Your post well expresses the reasoning behind extortionate property actions filed against the town by the wealthy. They are fully aware that a well-heeled plaintiff need but brandish the ...more
By highhatsize (4217), East Quogue on Mar 8, 14 10:22 AM
Highhat would like to think that public actors are competent individuals devoted to the public good as constrained by the Rule of Law. That has not been my universal experience with various government units in the East End. In the East Hampton Town government I first came to know from the McGintee years, politics, cover up and retaliation came first, second and third. I don't know Southampton as well, but if local political intrigue did not control the action of the boards, I doubt a recent ...more
By Lawrence Kelly (4), Bayport on Mar 8, 14 6:20 PM
1 member liked this comment
More smoke and mirrors IMO.

Go to trial per HHS below.

First to blink will be The Tell.
By PBR (4956), Southampton on Mar 9, 14 7:53 AM
Lauerville? You mean Lauer City.
By btdt (449), water mill on Mar 8, 14 8:50 PM
to Lawrence Kelley:

Perhaps, but if true, would not the most responsible course be to pursue this matter to a final judicial determination. The verdict therein will tell whether this is a case of planning board misfeasance or of overweening presumption by Mr. Lutnick. Moreover, the facts adduced will inform the people if the Southampton Town government of today is as corrupt as the predecessor which you reference. The latter effect is well worth the cost of defending against Mr. Lutnick's ...more
By highhatsize (4217), East Quogue on Mar 8, 14 10:51 PM
Sure. That is why I caution you on your attack on a citizen for pursuing that goal. I am all for sunlight being the best disinfectant when a citizen has cause to question the motivation and conclusions of certain government actors. In addition, the taxpayers should insist on actual disclosure by the government rather than resistance to disclosure of government documents and government demands for sealed settlements. If the town had followed that rule of transparency in the last ten years, the ...more
By Lawrence Kelly (4), Bayport on Mar 9, 14 8:50 AM
Regardless of what the man has done, good or bad, that is not the issue here. Regardless of character, what he is doing is what is put to question here. Regardless of the "big government's" conduct, the covenant which was originally struck is the question here.

When shall our home have been exploited sufficiently to suit the interests of those whose primary home it is not?
Mar 9, 14 9:18 PM appended by Mr. Z
We have lost so much over the years. Farms, open space, a world class road track, a drag strip, Bayberry Land, and that's just off the top of my head...
By Mr. Z (11847), North Sea on Mar 9, 14 9:18 PM
The ZBA and Planning board are, at times, the only regulatory bodies standing in the way of rampant over development that would result in our beautiful Town looking like Smithtown or some other God forsaken Up the Island hell hole.
By bigfresh (4666), north sea on Mar 9, 14 12:59 PM
Yes BigFresh but....because of the way the ZBA and Planning Board are run, and the costs of the process , the barrier to entry eliminates small entrepreneurs from going into business. The only ones that can afford the Town of Southampton's policies are the big box stores and national chains. So in your quest not to create an "up the island hell hole" you are exactly feeding that possibility. Have you ever submitted an application to the planning department? No regard for cost, no regard for time.
By The Real World (368), southampton on Mar 10, 14 11:33 AM
Agreed Real World -- the application process stunts individuals and small businesses.
By Beached Andy (3), Westhampton on Mar 10, 14 1:53 PM
Matt Lauer purchased his 40 acre parcel for 3.5 million in 2010, Howard Lutnick purchased has 40 acres for 15 million in 2003. It would seem that what Nature said about there being different restrictions on the properties. What Lauer has done is a bastardized ag use. This seems much less intensive of a use and to deny him based on the apple orchard being too small to need a barn of that size... He already indicated his desire to have a small Vineyard, which would likely justify the size of the barn. ...more
By ICE (1214), Southampton on Mar 10, 14 7:22 PM
And why has there always have to be a "public benefit." He owns the land. He can make a case for a barn that is miniscule in comparison to his total acreage. And, he has a right to do it. Next, the re-distribution of wealth argument will come in. People without are jealous of the people with. Read some of these posts.
By The Real World (368), southampton on Mar 11, 14 3:48 PM
You are oversimplifying the nature of Mr. Lutnick's legal title to the land, which is subject to an easement. He does not own the 40 acres outright in fee simple IMO. According to the article:

"An easement was placed over the 40 acres as part of the creation of a subdivision on another 39 acres that, at the time, belonged to Raymond Wesnofske. It was the first such easement the town ever sought as part of a subdivision development."

The resolution of this disagreement is not nearly ...more
By PBR (4956), Southampton on Mar 11, 14 3:58 PM
It is simple....Man made issues can have man made solutions. The Town has overcomplicated its zoning, rules and regulations on land use, and PDD's that it is forced to take things case by case thus opening themselves up to the discrimination that Mr. Lutnick is talking about. the K.I.S.S theory generally works best.
By The Real World (368), southampton on Mar 12, 14 1:20 PM