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Jun 29, 2010 6:35 PMPublication: The East Hampton Press

Southampton Town CPF revenues on the rise

Jun 29, 2010 6:35 PM

The total revenue collected by the Peconic Bay Community Preservation Fund, seen by many as a litmus test for the East End’s real estate market, is steadily increasing.

In May, more than $5.46 million came into the fund for preserving open space from the five East End towns that contribute to it, according to New York State Assemblyman Fred W. Thiele Jr. In contrast, in May 2009, just $2.15 million flowed into the CPF.

Overall, the CPF’s income from January through May 2010 represents a 151-percent increase over the same time period last year.

The fund’s revenue is generated through a 2-percent transfer tax on most real estate transactions in the towns of East Hampton, Southampton, Riverhead, Shelter Island, and Southold. First-time home buyers are exempted from the tax.

Mr. Thiele said that he thinks the CPF will experience revenue increases similar to those from January to May through the rest of 2010. If it stays on track, the fund will generate between $55 million and $60 million this year.

The high point for the CPF came in 2007, when $93 million was collected. The low point was 2009, when only $40 million came in.

Of the $5.46 million collected in May among the five towns participating in the CPF fund, $3.6 million came from Southampton Town and $1.6 million from East Hampton Town.

Matt Breitenbach, a real estate agent for Corcoran who works primarily east of the Shinnecock Canal, said that he has seen the volume of homes selling increase significantly since the beginning of 2010. “The activity has stayed very high since the first quarter of this year,” Mr. Breitenbach said. “Activity has remained consistent.”

He said the number of high-end sales has increased recently—a positive sign for real estate in general. In the first few months of this year, he said, there have been about 10 sales of homes for more than $10 million. There were only about 10 such sales for all of last year, he said.

“When you see the high end and that different level of wealth in the market, it’s a good sign for the market,” Mr. Breitenbach said.

He added that April was a spectacular month, and June is shaping up to be one, too. The pace in May was actually off a bit, he noted, compared to before and after.

According to the press release from Mr. Thiele’s office, the number of transactions that generate revenue for the fund have increased more than 22 percent between this year and last. Between January and May, there were 2,450 transactions, while for the same time frame last year there were 2,000.

Mr. Thiele said that now—with good prospects of increased revenue—is the perfect time for the towns to be aggressive in acquiring open space. When the revenue stream was uncertain, he recommended a more cautious approach toward buying land. He said that now there is an oversupply of land—which lowers values—and that the town should purchase what is available.

“Prices haven’t increased as fast as the revenues have,” he said. “There are opportunities for the town out there.”

Mary Wilson, the CPF administrator for Southampton Town, said that with the revenue increasing, the Town Board will most likely be reviewing more projects and making decisions to pursue open space.

“Clearly, the former Bailey’s Motel will be on the list, as well as several other projects, some [of] which are new and some [of] which have had to be stalled due to the economic collapse two years ago,” she said.

She declined to say which land parcels other than the 32-acre Bailey’s Motel property on Montauk Highway in Westhampton the town is interested in purchasing.

Scott Wilson, the land acquisitions manager for East Hampton Town, was not available for comment Tuesday.

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