Lunch With: Sag Harbor Mayor Gregory Ferraris

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n a little more than two years in his position, Sag Harbor Village Mayor Gregory Ferraris has had to contend with some of the biggest issues in the former whaling port’s history. One of the key matters, along with drafting a new zoning code and two Superfund waste cleanups, has been his work finding housing solutions for locals, more and more of whom are leaving Sag Harbor because of high real estate costs.

As the massive redevelopment of the former Bulova watchcase factory into luxury apartments began building momentum last year, the community became divided over whether the village should accept $2.5 million being offered by Sag Development Partners to start a housing trust in lieu of fulfilling county required on-site affordable housing there. While on-site housing would be guaranteed homes for citizens, Mayor Ferraris learned that instead of a condo in the village business district, many would prefer the flexible options a housing trust could provide them in getting homes of their own. Although the trust was conceptualized some 18 months ago, both sides of the issue were vehement in their arguments, and the decision took much time from the various boards.

In the end, he and the village boards accepted the donation, and the Bulova project is now well on its way to breaking ground.

The busy mayor sat down over bagels and bottled drinks in a village conference room last week to explain how the housing trust is shaping up and why he thinks it was the right choice for Sag Harbor’s workforce in need of homes.

Q: The housing trust ... was the idea precipitated by [the] Bulova offer?

A: Approximately two years ago, two and a half years ago now, the village started looking at implementing some sort of affordable housing plan. ... We started looking at it and we put forth the draft—what we dubbed the Local Residential Housing Plan. This is a little bit different than other municipalities’ workforce housing programs. We don’t have a program in the village, we don’t have a department in the village to run such a program. So we really need to look at ways to resolve our issues, or help resolve our issues, to try to succeed in this while looking at a couple different options, the first being ... to look to the adoption of legislation that would legalize accessory apartments. We’re in the process of doing that. The second would be to look at forming inter-municipal agreements with the Town of Southampton and the Town of East Hampton so we can use their resources. ... A couple of other inclusionary zoning programs we’re looking into were to restrict the conversion of existing multifamily homes to single family homes. We’re going to try to restrict that aspect of it and also require any second-story uses above commercial establishments within the business district to remain residential. In other words, in the past number of years a lot of second story uses were converted from residential to commercial. Really, all modern zoning and planning techniques really push for second and third story residential uses within the village business district. So those are some of the items that we started to look at from the beginning.

It just so happened I guess about six months after the initial draft was written the Bulova application came along.

A lot of what we discussed in here came to light on that application when the Suffolk Planning Commission put forth a directive toward the village’s Planning Board that they had to, the applicant had to, adhere to the county’s provisions. ... We were one of the first municipalities to deal with that directive from the county, so we started looking into it on-site.

Once the applicant determined that it wasn’t feasible on-site ... we started to look at off-site. ... What we found out was that we were hindered because of the Suffolk County Health Department’s directive toward groundwater management. We are in zone five, which prohibits them to provide any density bonusing on properties. So really we found that even though if we did find a property that we could put affordable housing on, we couldn’t increase the density on that property, so therefore we couldn’t really get the bang for the buck on those properties. We couldn’t put multifamily homes on that property due to that.

Once we found out that we had to adhere to that hurdle it became evident that maybe we’ve got to take a next step. We couldn’t provide it on site, it’s very possible that we couldn’t find a spot to do it off site. The third was being affordable housing trust funds.

Q: I would assume that accessory apartments have been a longtime thing that everybody does even if it’s been something that’s not necessarily allowed?

A: Yeah, when we first looked at this we realized that accessory apartments do exist in the village. ... What we want to do is to legalize the accessory apartments that do exist, provide incentives for individuals to implement new accessory apartments or construct new accessory apartments in the village and so forth. Once we started looking at it, it’s not as easy a decision as you think. There’s definitely pros and cons to them. There’s disadvantages of higher density in areas and so forth. What we wanted to do was rather try to implement a lot of new accessory apartments into the village and really legalize the existing ones so they can be monitored.

Q: Was it as hard [for you] to buy a home in the village?

A: I was lucky enough to buy a house approximately 10 years ago, before the real estate boom in Sag Harbor took off. ... At the time I purchased my house for $235,000 my parents thought I was crazy to spend that much money on a house, so I think it’s all relative to some extent. The same discussions took place back then, 10 years ago, that affordable housing didn’t exist at that level. It’s now been exacerbated to the point where we are now. ...

One thing, when we started the research and really what we found with the Bulova application was when we started interviewing individuals that were candidates for affordable housing we found that it wasn’t where an individual or a family couldn’t afford a mortgage payment. Really, what it was, was the down payment that was prohibitive at this point. In other words, if they were looking at a house that was $500,000, a husband and wife or even a single individual could qualify for a mortgage. However, they didn’t have the $50,000 down payment and not a lot of people do these days. So, really, once we found out what the real problem was we tried to back into a solution and, really, I believe an affordable housing trust fund as it’s stated right now will be able to provide that type of assistance to individuals and families.

Q: And how would somebody get chosen, I mean, when the time comes to actually start dolling out some of this money, how does it work?

A: There’s three types of housing trust funds that really can be developed at this point. There’s a municipal model. There’s a purely not-for-profit model and then somewhat of a quasi model. Each one of those had advantages and disadvantages. We looked at all three, weighed the pros and cons and decided on somewhat of a quasi model of the entity. ... It’s a not-for-profit corporation that I formed personally back in January of 2008. It’s made up of a board of directors of 11 individuals, three of which have been appointed to date. An additional seven or eight will be appointed over the next couple of weeks. We have formed our mission purpose, statement. We have adopted our bylaws at this point in time, and we’re moving forward. So, we’re well on our way here. It will take us approximately three months or so to adopt all the regulatory requirements on a not-for-profit corporation. ...

I would say by the end of October we will be up and running in full force with the housing trust fund.

Q: And people would donate to [the fund]?

A: Correct. [And] we’ll lobby with the Town of Southampton government, the Town of East Hampton government for grants, for line items in their budgets to operate the administrative costs of the organization. We’re going to look at outside grants through private foundations, through the county, the state and federal. There’s a tremendous amount of money out there to fund this type of activity.

Q: It seems there’s a general sense that most people would prefer the idea of having money toward a home than being forced to live an apartment.

A: Yeah, when we were doing interviews for candidates for affordable housing ... one of the main things that we came away from that with is flexibility. Not only the flexibility of a municipality, but the flexibility of individuals. Each person has a different scenario of why they can’t afford to live here. One might not have money for a down payment, one might have money for a down payment, but necessarily might not have the proper income thresholds to qualify. Another individual might not be able to live in a condominium because they have an extended family or they might have pets or they might have a medical requirement of some sort.

What we found in the interview process is not everybody is in the same situation and we need to have that flexibility. And there were a lot of people that stressed that their first choice was not to live in a planned development district of affordable housing. That if possible, and they weren’t forced to, they’d rather live in an affordable home that didn’t have qualifications or characteristics of an affordable project. ...

Q: How did you end up getting involved in politics?

A: I got involved six plus years ago. The village was going through some fiscal issues where their treasurer was not recording and reporting transactions properly and so forth so I, as a CPA, was asked to come in—I did a lot of governmental work at the time, municipal auditing and so forth—I did and I was just asked if I would want to stay on possibly with the board of trustees. The village was dramatically different. The amount of time the board of trustees spent at that time paled in comparison to what is required at this point in time. It’s changed dramatically, even over the last six years. ...

The board of the housing trust fund will be meeting within the next month or so to form an agreement with the Long Island Housing Partnership for the administration of the trust fund itself. The housing partnership, which has a vast experience dealing with municipalities and organizations like this, will deal with the day-to-day operations of the trust fund itself as well as the administration of the applications. ...

The organizing members of the trust fund are Denise Shern, an attorney in East Hampton, and former municipal attorney, and Stacy Pennebaker, a real estate individual here in the village. ... We have selected members who have shown interest in affordable housing in the area that also show interest in sitting on our board. We’re in the process of sitting down with each one of those individuals and explaining to them the responsibilities of a board member of a non-for-profit corporation, what’s at stake and to show their commitment to the organization. They’ve all shown great interest to move forward.