Preserving Sag Harbor Cinema Is A Rare Use Of CPF, But Not Unheard Of

Southampton Town’s bid to spend nearly $4 million to purchase the development rights of the Sag Harbor Cinema Arts Center using the Community Preservation Fund came as a surprise to many in the community, but is not without precedent.

The effort to preserve historically significant properties was one of the founding ideas of the Peconic Bay Community Preservation Fund, according to State Assemblyman Fred W. Thiele Jr., who helped to launch the program nearly two decades ago.

Since its inception in 1999, the state law—which collects a 2-percent tax on most real estate trades in East Hampton, Riverhead, Shelter Island, Southampton and Southold—has funded the preservation of farmland, protected open space, and created parks.

Towns are continuously weighing how to use CPF dollars, and even extended the fund this year to address water quality issues, which was made possible by a 2016 referendum.

But whenever the towns have made purchases intended for historic preservation, some in the community are left to believe it’s a misuse of tax dollars, to prevent a property—in this case, the Sag Harbor Cinema—from becoming something other than a cultural center in the future.

Mr. Thiele said the critics are wrong.

“Historic preservation was part of the CPF from the get-go,” Mr. Thiele said. “I understand why people look at it differently. I think probably 90 percent of the money has gone toward buying land for open space or for farmland preservation, but there has been some historic preservation. It is one of the four categories of CPF, but there has been more of a focus elsewhere.”

Scott Wilson, East Hampton Town's director of Land Acquisition and Management, handles all CPF purchases for the town. Mr. Wilson said the town typically seeks development rights for an agricultural land, and easements are sought when the structure on the property needs to be retained.

As for which properties are best to protect, Mr. Wilson said, “The only opinion that counts is the Town Board’s.”

The last property East Hampton Town acquired using CPF money was the Gardiner Mill on James Lane for $9.6 million in 2014. As part of the town’s land management and stewardship plan, East Hampton Village is charged with preserving the property. There are three other properties in East Hampton that the town owns the title to, and five properties the town owns historic preservation and facade easements to—notably the Thomas Moran House at Guild Hall.

According to Southampton Town’s 2018 Community Preservation Fund Management and Stewardship Plan, in addition to the Sag Harbor Cinema, nine CPF purchased properties are eligible for restoration. While historical societies—funded by private fundraising and grants—are considered the main stewards of the properties and are responsible for day-to-day operations, the town has “significantly increased its CPF stewardship funding for historic property renovations.”

Mr. Thiele admitted it’s a big renovation—the cinema building was severely damaged in a fire 18 months ago. It’s famous art deco sign was salvaged, touched up and now sits in storage.

“Part of the [cinema] was destroyed, and part of the building still exists,” Mr. Thiele said. “It’s in a federally designated historic district. It is a contributing building to the history of the historic district.”

Mr. Thiele said he has worked with Southampton Town officials to understand the legislative intent of the CPF. He said he had explained that for facade easement, Southampton Town has to restore the cinema building using the same federal guidelines that the property’s owners would have to use if they were doing a historic restoration to get federal tax credits.

“I don’t think [the cinema deal] is a stretch because they have to abide by the same rules … so as long as it actually promoting historic preservation, which is one of the four categories under the CPF, I think it’s fine,” Mr. Thiele said.

By purchasing the development rights, the town seeks to preserve property and its aesthetic. Additional conditions of the sale include the right of the town to be able to regulate what can and can't be built on the property. For instance, any retail operation at the site of the theater would have to be a souvenir shop related to the cinema. The town would also be able to put restrictions on ticket prices.

“The owners of the property are giving up something of economic value to keep it in its historic use in a historic district, so they can get their restoration paid for. All of the future owners are going to have to comply with the same thing,” Mr. Thiele said. “It’s the same as a farmer giving up all of their potential future rights to develop the land, and they get paid for their development rights, and it’s then agriculture forever. This is going to be a cultural center forever.”

Town Supervisor Jay Schneiderman said the deal is similar to the CPF purchases of the Tiana Lifesaving Station in Hampton Bays, which was bought for $3.2 million in 2014, and the Nathaniel Rogers House in Bridgehampton, which was purchased more than a decade ago for historic reconstruction funded by the CPF.

Going forward, Mr. Schneiderman said the town is more focused on purchasing historic preservation easements rather than owning the building.

“We have found that lately, for historic purchases, we don’t want to use the CPF to maintain the properties as time goes on anymore. It’s a growing concern,” Mr. Schneiderman said. “We can’t use the fund to pay the heating bills or re-roof buildings. We don't really have a fund to do that. We want to help the private owner by providing money through an easement that guarantees the external facade will remain the same.”

Mr. Schneiderman acknowledged that the purchase would be unusual. The funds would essentially be preserving a facade that doesn’t exist.

“It’s all just a policy question: as we do projects like this, it does in a way set the stage of the future use of this fund,” Mr. Schneiderman said. “I don’t know how many others might be like this—but it does set a weird precedent. Maybe the line would be if there was a property that didn’t have a landmark status, the CPF couldn’t be used.”