CPF Would Pay $4 million To Protect Sag Harbor Cinema Arts Center

The old Sag Harbor Cinema sign. Kathryn G. Menu photo

The Town of Southampton’s Community Preservation Fund (CPF) will pay $4 million to the Sagcinema LLC if the Town Board approves a proposal to buy easements protecting the cinema’s reconstructed façade and restricting the future use of the property to a cinema arts center forever.

Supervisor Jay Schneiderman disclosed the figure last week in a phone interview after the Town Board voted on September 25 to schedule a public hearing on the proposal at Southampton Town Hall at 6 p.m. on October 23.

The payment would be biggest single funding boost the cinema project will have received over more than two years of fundraising and “is clearly the biggest piece of this puzzle,” said Susan Mead, treasurer of the Sag Harbor Partnership, of the project’s complicated funding arrangements.

Payable only after the Town Board approves the deal and the required covenants and restrictions are linked to the property, the $4 million sale will not relieve the pressing need for continued fundraising and the collection of pending pledges and grants, Ms. Mead said.

The Sag Harbor Partnership owns Sagcinema LLC, which the Partnership set up to acquire the fire-ravaged Sag Harbor Cinema for $8 million early this year. Construction, which started in June, is expected to cost at least $5 to $6 million.

Under the terms of the proposed contract between the town and Sagcinema LLC, the restrictive use easement would limit the use of any structures on the property to a cinema arts center in perpetuity, according to Mary Wilson, manager of the town’s CPF.

The proposed easement also would limit the admission price of movie tickets to 80 percent “of the average film ticket price in the town or county,” according to Ms. Wilson. In addition, up to 25 percent of the total square footage of the property could be used “for accessory purposes,” such as a “café, gift shop and gallery.” Also, the town would have the right of first refusal on the property if it is ever put up for sale.

Supervisor Schneiderman commented that the ticket-price limit was negotiated so the cinema would “not be a venue just for the well-heeled.”

According to Ms. Wilson, the proposed historic preservation and conservation easement would require the exterior of the cinema building to “remain in its historical condition,” including the art deco neon sign reading “Sag Harbor” that was salvaged from the site after the December 2016 fire that destroyed much of the cinema. The sign itself is a reproduction, made around 2004 to replace the rusted and decayed original.

The easement also would require any changes to the exterior to be approved by the town.

The Sag Harbor Partnership’s board of directors released a statement through Ms. Mead on Monday commenting on the proposed sale:

“Should the Town of Southampton approve the acquisition of the use and historic facade easements, then these easements, our Empire State Development reimbursement grant, and the funds we hope to continue to raise from our generous community for projection equipment, staffing, and programming for our first annual operating budget, will allow us to achieve our goals. Our wish has always been to purchase the property, rebuild and restore the facility, and be able to open the doors to a new cinema arts center free of debt for the community to enjoy for many years to come.”

Supervisor Schneiderman said the Partnership had first approached the town proposing to sell only a conservation easement to protect the reconstructed façade of the cinema. Remembering the 2016 “recreational easement” the town CPF purchased for $6.5 million to preserve the Southampton Golf Range on County Road 39 in 2016, he said he wondered if a similar use restriction might be negotiated to preserve the cinema arts center and generate far more money for the project. He noted the “commercial rights” to develop the property “turned out to be very valuable,” well above the negotiated sale price of $4 million.

Last week, soon after the Town Board voted to set the public hearing on the proposed easement sales, Ms. Mead issued a statement on behalf of the Partnership: “We, the Sag Harbor Partnership, are thrilled and gratified that the Southampton Town Board and the Community Preservation Fund have invested time and effort toward securing the Sag Harbor Cinema as a cherished landmark in our East End community.

“The proposed easements will provide the ultimate protection for the Cinema, guaranteeing its use as a cinema and preservation of the restored facade and sign for generations to come. We look forward to the public hearing before the Southampton Town Board on October 23, 2018.”

Mr. Schneiderman said the Partnership had signed the contract and that he would sign on behalf of the town only after the Town Board authorizes him to do so.