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Nov 28, 2017 4:46 PMPublication: The Southampton Press

Town's Lobster Inn Purchase Stalled As Officials Change Finance Plan, Bring In Private Partner

Southampton Town Supervisor Jay Schneiderman looks at a map of the Lobster Inn property. AMANDA BERNOCCO
Nov 28, 2017 4:52 PM

Southampton Town’s planned $8.5 million purchase of the property that most recently housed the Lobster Grille Inn in Shinnecock Hills has been stalled, following a last-minute change in how it would pay for the transaction.

Instead of purchasing the majority of the 10-acre swath of waterfront land with Community Preservation Fund revenues, Supervisor Jay Schneiderman now says he intends to break up the property into sections, buying portions using money from different fund sources. If the property were to be purchased entirely with CPF money, Mr. Schneiderman explained, it would limit the future use of the land by the town.

The town also would partner with a third party, who would buy a portion of the site to use for a privately owned shellfish hatchery and possibly a small restaurant or clam bar.

The town had been getting ready to go into contract with the seller in early October for the CPF purchase. Now, the more complicated cluster of buys means that before going forward, all of the properties will have to be reappraised to determine the size and price of each.

The delay could be risky—the property is still on the market and is being actively listed by David Donohue of Douglas Elliman in Southampton for $9.9 million—but the change in the purchase plan could help alleviate some of the financial and maintenance burden on the town, according to Mr. Schneiderman.

The highly visible property, which actually consists of three adjoining parcels, includes waterfront land, the former restaurant, a dock with 48 boat slips, and access to both Cold Spring Pond and Peconic Bay. The properties are currently owned by a pair of limited liability corporations, Peconic Bay Marina LLC and Peconic Bay Residence LLC.

With the purchase, the town plans to retain the marina and boat slips, and would use the westernmost portion of the property to host a cluster septic system to service approximately 50 homes surrounding it, Mr. Schneiderman said. That property, bordering an apartment complex on Sunrise Highway, could then be purchased with CPF water quality money. A portion of the parcel just east of that would be purchased using CPF money and preserved as open space.

The largest piece of the parcel, nestled between Sunrise Highway and Inlet Road West, would be purchased by a third party to run a shellfish hatchery and possibly a small restaurant. The third party would also purchase a sliver of land on the other side of Inlet Road West—the piece that houses the old Lobster Inn property.

The aforementioned third party is expected to be Donna Lanzetta of East Quogue, according to the supervisor. Ms. Lanzetta is the president of the East Quogue Chamber of Commerce and owns Manna Fish Farms, an open ocean aquaculture farm in East Quogue. She did not return requests for comment this week.

Mr. Schneiderman noted that the town still would purchase the development rights on that property so that the intended use, as an aquaculture farm, would be permanent.

The marina, near Inlet Road East, would be purchased by the town as a recreational use, also permissible through the use of CPF funds. Of the 48 slips, two would be held for Ms. Lanzetta, two would be for the Town Trustees, and the rest would be available for use by town residents, Mr. Schneiderman said. Any income from the marina would go to maintenance and back into the CPF account, he added.

Lastly, the supervisor said the plans include the town buying a piece of the property—sandwiched between Inlet Road West and Inlet Road East—to build a new road to connect them. As a result, that property would be bought with money from the town’s general fund.

Mr. Schneiderman said the future cut-through road would provide those living on Inlet Road East a more safe access point to Sunrise Highway.

“It’s so complicated,” the supervisor said as he sat at his desk at Town Hall on Monday, sketching his vision on a blank piece of paper.

Stressing that the final numbers still need to be crunched, Mr. Schneiderman noted that he expects the piece being purchased by Ms. Lanzetta would cost approximately $800,000—thus lowering the town’s costs by that much. It also would mean the town would not be responsible for upkeep on that part of the property.

“I’m basically taking a maintenance headache off the town by doing it this way,” Mr. Schneiderman said.

Since the town still has not inked a contract to buy the property, Mr. Donohue is continuing to show his client’s property to private buyers—and said he has received “a couple of offers.”

Mr. Donohue explained that his client wants to sell the land to the town but isn’t going to wait forever for Mr. Schneiderman to sign the contract. “They have a contract in front of them,” he said of the town.

Mr. Schneiderman said he is pushing the process forward, noting that in about two months—once another appraisal of the property is completed—the purchase will go to another public hearing. Assuming that all goes according to plan, Mr. Schneiderman said, the town could be ready to close on the property by March 2018.

If the seller decides to reject the town’s offer and sell the property to a developer, the opportunity to preserve it could be lost. The listing markets the property as a “development opportunity with options,” noting that the land could house 13 luxury homes or 25 townhouses.

The Lobster Inn property has been targeted for development a few other times over the years.

In 1969, George “Skip” Tollefsen opened the Lobster Inn there, and, 40 years later, he received Southampton Town Zoning Board of Appeals approval to build 25 beach cottage-style condominium units on the land.

After closing the restaurant after several decades, he then sold the property to Peconic Bay Marina LLC in 2011. The Suffolk County Health Department would not allow 25 residential units to be built there without a sewage treatment system, but in 2014 a plan was submitted that included one, and the applicants also sought to change the use of the Lobster Inn from a restaurant to a clubhouse.

At one point, condominiums were envisioned for the site, in a project dubbed “The Maritime.” After that, Douglas Elliman Real Estate pitched building 13 luxury homes or 25 townhouses, with a 48-slip marina—as is advertised in the current listing.

For four years, Randy Riess and Tim Burke operated a restaurant there, called the Lobster Grille Inn. They closed and moved out in October 2016, saying the landlord, Eldad Levy, the president and CEO of Centrock Corporation in Manhattan, could not guarantee them the space through the summer of 2017, so it didn’t make sense to stay.

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Instead of photos of Jay Schneiderman in front of a computer screen, how 'bout a photo of the actual property?

Just a thought....

By Frank Wheeler (1826), Northampton on Nov 28, 17 5:02 PM
I put my money in that Jay is somehow going to be part of the "3rd party".
By HB Proud (889), Hampton Bays on Nov 28, 17 5:39 PM
2 members liked this comment
I'd put my money on the Epley/Benedict partners.
By deepchanel (89), Southampton on Nov 29, 17 10:54 AM
1 member liked this comment
The picture is actually Jay picking out his waterfront condo unit that will undoubtedly be buried somewhere in the purchase contract.
By BillWillConn3 (180), Southampton on Nov 28, 17 6:52 PM
2 members liked this comment
This sounds fishy. I don't trust Jay one bit.
By HB90 (164), southampton on Nov 28, 17 7:51 PM
1 member liked this comment
So now the Stupervisor is in real estate with CPF funds? What The F*CK?
By Draggerman (955), Southampton on Nov 28, 17 10:01 PM
1 member liked this comment
Smells funky to me. How does JAY hand pick the purchasers of each property??? Ever hear of about public notification
Sounds like the donkey is pushing the cart. Change of usage, splitting the property and smells like fish. The creek there is not certified waters for shellfish.
What do our trustees think of this, speak up...
By knitter (1941), Southampton on Nov 28, 17 10:07 PM
Jay definitely lining up his future when he inevitably gets ousted for self interest. How much of a raise for yourself next year? Look at Neptunes. How many years has it been since the Town purchased it? It looks like a demolition site now.
By lirider (288), Hampton Bays on Nov 29, 17 5:10 AM
2 members liked this comment
Don’t look at me, I didn’t vote for this maniac you just got the classic bait-n-switch on the Lobster Inn. It’s amazing to watch my fellow citizens shoot themselves in the foot in every election. Laziness or apathy?
By even flow (1023), East Hampton on Nov 29, 17 5:44 AM
a s**t weasel of the highest order. There's waaay too much room for shennanagins with this plan. Would the Town Board have to vote on this or has Jay voted himself more power along with his new raise?
By bigfresh (4666), north sea on Nov 29, 17 6:44 AM
2 members liked this comment
Just heard on the grapevine that Hampton Jitney are going to be the new owners of the Hampton Bays Diner.Hope this is a sick rumor.
By watchdog1 (543), Southampton on Nov 29, 17 8:27 AM
Word is it is Eli Manning. Going to be a high-end steakhouse.
By Mouthampton (439), Southampton on Nov 29, 17 8:36 AM
Jay is pro developer and will let this flounder until it is sold, witness the HIlls.
By Taz (725), East Quogue on Nov 29, 17 11:04 AM

do want: preservation
By deKooning (106), southampton on Nov 30, 17 12:18 PM
The CPF is planning on taking another Waterfront restaurant and marina off the tax rolls. Add this to the list of properties already taken out of service. Neptune Beach Club, the Mimosa and Catbaleau on Dune Road, Tide Runners on the Shinnecock canal via PDD and The restaurant and club at Conscience point. and now the Lobster Inn. Why is the town of Southampton closing down all these tourist destinations and taking them off the tax rolls using our tax dollars. This policy added to the policy of ...more
By Ernie (88), Hampton Bays on Nov 30, 17 1:04 PM
2 members liked this comment
In the "real world", effective leadership helps facilitate to find buyers that are going to run respectable establishment to continue the vitality of the community, instead the Town Government is sucking the life out the town piece by piece by buying viable commercial properties and taking them out of service. The CPF has turned into a big slush fund for the Town.
By HB Proud (889), Hampton Bays on Nov 30, 17 3:58 PM
2 members liked this comment
Indeed, this smells fishy!

This is proof our local government is out of control with the CPF! CPF has made the town board walk a fine line and at times overstep. There are so many legal problems with Jays plans it will be a waste of time and town money. “Quid Pro Quo”! The very government that controls CPF also controls means for business with these lands. Southampton Town is NOT friendly and should be investigated by NYS. Who in their right mind would take on such a deal ...more
By ZGerry (50), Hamptons on Dec 1, 17 10:59 PM
By raymc (1), Hampton Bays on Dec 8, 17 8:33 AM