Sag Harbor Ban On Residential-To-Commercial Conversions Is Not Forthcoming

There will be no immediate relief for Sag Harbor Village Planning Board members who have been frustrated by their powerlessness to stop apartments in the business district from being converted to commercial uses.

Planning Board Chair Kay Preston Lawson said at the board’s Tuesday, September 22, back-to-back work session and public meeting that the Sag Harbor Village Board of Trustees is not going to consider at this time the Planning Board’s request for legislation prohibiting such conversions.

Planning Board members have expressed their disappointment repeatedly in recent months that apartments around the business district are being lost when they are turned into offices or other commercial spaces. In the case of one application that the board heard on Tuesday, the owner of restaurant Page at 63 Main wishes to expand on the building at 63 Main Street and convert the second-floor, four-bedroom apartment into an event venue. A second application discussed at the meeting seeks to change two apartments at 51 Division Street into offices.

Because commercial uses are permitted in the business district, Planning Board members have been advised that they cannot reject a change-of-use application simply because they want to retain apartments.

“The code isn’t changing right now,” Ms. Lawson said. “That’s not happening. We still need to look at these applications under the current framework.”

“We’re losing rental units left and right — and we’re the Planning Board,” member Jonas Hagen said during the meeting. “I just think that we have to make sure that we’re acting in accordance with our plans and the village’s needs. So I ask our consultants, and our chair, and maybe chairs of other boards, for guidance in how to make sure we can preserve rental units in this village. The way things are going, the village is already very unaffordable. It will only get more unaffordable the more rental units we lose. We’re losing diversity — income diversity. We’re losing workforce housing, we’re losing housing for first responders. I think it’s our duty as the Planning Board to address this issue.”

Ms. Lawson noted that the Planning Board wrote to Mayor Kathleen Mulcahy and the village trustees about the issue over the summer, and said they replied that they will not be taking the issue on right now because the village is in the midst of a waterfront study and moratorium.

Tiffany Scarlato — a local attorney representing Joseph Traina, the principal of Page at 63 Main— took issue with Planning Board members raising objections to the existing law while discussing her client’s specific application.

“Right now, this is a completely legal use, and using this process in order to derail the applicant’s application would be really, weirdly inappropriate — beyond inappropriate,” she told the Planning Board. “I would even go so far as to say that the letter that was drafted and sent as the application was pending was borderline inappropriate.”

In a previous meeting, Ms. Scarlato had similar comments for the board regarding an application for James Merrell Architects at 66 Main Street to expand its office space from the second floor to also include the third floor, where there had been an 800-square-foot apartment. Board members raised similar concerns about losing residential space, but ultimately, they signed off on the conversion because they lacked legal grounds to reject it.

Regarding the 51 Division Street application, Ms. Lawson said it is “almost a nonstarter.” The remark was not over the plans to convert apartments to offices, but because of how proposed parking spaces were crammed onto the site.

As the meeting was about to conclude, Planning Board member Larry Perrine raised again the struggle to stop residential-to-commercial conversions.

“Two times now, in two successive meetings, the issue of conversion of a rental unit into commercial space has come up,” Mr. Perrine said. “In both meetings, we have been lectured by Ms. Scarlato as to the appropriateness of addressing the issue related to a specific proposal before us. And we all understand what she has stated, and understand what the laws presently are. The question is, for me, when are we going to discuss this matter?”

He also questioned why the Village Board could not take changes into consideration immediately. “What is it that is preventing them from addressing the issue in some fashion that would move this along?” he asked.

Ms. Lawson said that while there is sentiment among village officials in favor of preserving apartments, “commercial space is a permitted use in these buildings, and to prohibit that conversion legally is extraordinarily challenging.”

Village Attorney Denise Schoen spoke to why prohibiting conversions in areas zoned “village business” is easier said than done.

“The structure of the code right now makes it difficult, but it’s not the code’s fault,” Ms. Schoen said. “All of the local codes are like that because village business does permit office space. It’s very difficult to prohibit someone from converting one particular kind of use to that other use.”

Ms. Lawson said a better approach would be to encourage apartment use with incentives, such as allowing applicants to build bigger or requiring fewer parking spaces for residential versus commercial.

“I do understand what rights are — development rights, all kinds of rights that come with real estate — under a zoning code,” Mr. Perrine said. “And so, the issue is the bad politics of removing a right that someone presently has for their real estate. Taking it away from them. You’re removing something of potential value … and that’s where the conflict comes in and the reluctance to look at this with a hard look.”

He went on to say: “Let’s cut to the chase here — it’s all about the money. This is what it’s all about. When you say, ‘do things to encourage people to not convert apartments,’ it’s about money. Why would they be investing money into converting something into another use, a commercial use, if it was not about the money? So that suggests that some sort of subsidy program — I’ll use it in quotation marks, whatever the mechanism is — is what’s required to slow this down and potentially prevent it.”

During a phone interview Friday, Ms. Mulcahy noted that the Village Board had voted just two days earlier to implement the waterfront moratorium and now awaits approval from the Suffolk County Department of Economic Development and Planning to move forward.

“We have been so focused on getting this waterfront plan up and running and the moratorium in place that they have put the residential-to-office conversion issue on a not-too-far backburner, but certainly down to a simmer,” Ms. Mulcahy said. “As soon as everything is running and smooth on the moratorium on the waterfront, we will revisit that. But we can only focus on so many things at one time.”

She agreed that apartments in the business district benefit the village.

“I prefer that we stay as residential as possible on Main Street and in the business district with upper-floor residential,” she said. “We need affordable housing, and this is more affordable, relatively, compared to most of the others. It’s still not affordable in a national idea, but it’s certainly better than other options. So we need that. We also need the vibrancy on Main Street. One of the things that makes our village so wonderful is that there are lights on above our stores. There are people here 24/7. That’s one of the things that really makes Main Street, Main Street in Sag Harbor.”

The mayor also favored encouraging building owners and builders to retain and provide more residential uses.

“But, at the same time, I’m not going to take away dollars from business and building owners,” she added. “It’s a fine balance, and that’s why we need to take the time to do a good study on it.”

Ms. Mulcahy predicted that market demands will do more to drive the issue than zoning. “I think there is not as much need for office space anymore,” she said. “The world changed a lot in the past six months, and people realize you don’t need an office.”

One of the reasons why building owners prefer offices to apartments is that apartments have higher costs to build, such as bathrooms and kitchens, she noted.

“Housing is at a premium,” the mayor said. “We need housing, especially less expensive apartment housing where young people can live happily and be able to get started out here, because right now, our young people are leaving because they can’t afford to live here. Even if they have a good job here, it’s almost impossible to find a place to live.”

Ms. Scarlato was a member of the Village Board when Sag Harbor’s comprehensive plan for the business district was drafted and adopted. During an interview on Thursday, September 24, she explained that the plan permitted commercial uses on second and third floors because offices were being banned on first floors in favor of retail and restaurants. She said it was a negotiation with the stakeholders — the building owners — at the time, and a lot of time, energy, and thought went into the comprehensive plan

“Back in 2007, 2008, when the code was being drafted, one of the major concerns that was articulated at the time was the expansion of large retail uses in the village and the proliferation of offices, slash, real estate offices on the first floor,” Ms. Scarlato said. “And one of the goals of the comprehensive plan that was adopted back in 2008 for the village business district was to maintain Sag Harbor Village as a walking village. And part of that was maintaining our retail space, maintaining our restaurants, and maintaining that downtown feel where there are a lot of people around.”

While the draft plan did note that the village needs affordable housing, it was not referring to the Main Street apartments, she said.

“They are by no means affordable,” she continued. “I don’t know why anyone would think that a 3,000-square-foot apartment on the second story of a building in the village would be affordable.”

Ms. Scarlato suggested officials take a new look at the comprehensive plan and the rest of the village as a whole, rather than considering the loss of one use in a vacuum.