Sag Harbor Wants Gas Ball Property As Municipal Parking Lot, Putting It In Competition With Bay Street Theater

Sag Harbor Village is seeking a long-term lease on the National Grid property at the corner of Bridge and Water streets, which has been used as a long-term parking lot. STEPHEN J. KOTZ

The enthusiastic talk of a partnership between Sag Harbor Village and Bay Street Theater that accompanied the announcement last fall that Bay Street had purchased the Water Street Shops building as a site for a new theater has taken on a competitive edge, as both sides seek to gain control of the National Grid gas ball property at Bridge and Water streets.

Sag Harbor Mayor Kathleen Mulcahy confirmed this week that the village hopes to obtain a long-term lease for the property. Currently, the village is using the lot for long-term parking under a five-year lease with National Grid that carries a nominal fee of $1 a year. That lease expires this year.

“We are doing everything we can to secure the maximum amount of parking spots for our residents,” the mayor said of a village with a perpetual parking shortage.

But Adam Potter, the chairman of the Friends of Bay Street, a not-for-profit organization formed to build the new theater, said Bay Street has also been interested in the property and that the mayor had reneged on an offer to support its bid.

“We are very disappointed that after receiving a letter of support for us purchasing the property, it appears they are withdrawing that support,” Mr. Potter said this week. “Bay Street does not have parking and we want to build a 300-seat theater.”

Mr. Potter said the situation was critical because the village is currently proposing a rezoning of much of its waterfront that would discourage on-site parking. Water Street Shops, which is best known for its tenant, the 7-Eleven store, is included in the area being considered for that rezoning.

Ms. Mulcahy acknowledged that she did write a letter last June supporting Bay Street’s effort to purchase the property. But she said that was before Friends of Bay Street bought the 7-Eleven building and before National Grid, which had put the property on the market for sale, changed its mind and offered it for a long-term lease. “Once it became available as a lease, we were interested,” said the mayor, who added that she recently sent a second letter to National Grid informing it that the village was withdrawing its support for Bay Street’s purchase.

Just because the village no longer supports Bay Street’s purchase of the National Grid parcel does not mean it no longer supports its efforts to build a new facility, the mayor said. “It’s very important to us.”

But Village Board members said the lot is too valuable for the village to ignore. “My position has always been that the village needs to secure that lot,” said Trustee Thomas Gardella, who said it is used by residents who live in apartments above Main Street stores and by employees of village businesses. “It’s too vital for parking in the village.”

“It is in the best interest of the village to control that property,” added Trustee Aidan Corish. “If residents and merchants thought we were not trying to acquire it, they would be up in arms.”

Tracy Mitchell, Bay Street’s executive director, questioned why the village would not work with Bay Street on a parking solution, citing the theater’s efforts to remain in the village and its role as an important economic driver.

“I don’t understand why the village is jumping into this now,” she said. “They are making it much more difficult than it has to be.”

“I’m a resident of the village and I would rather have somebody else buy it,” she added. “There could be a conversation and whoever gets it would guarantee access. If it was Bay Street, we all know the answer would be ‘yes.’”

“Bay Street would be very open to a deal with the village that it retain parking for the community,” Mr. Potter agreed.

But village officials, who early on seemed to be receptive to Mr. Potter’s plans on behalf of the theater, have grown increasingly uneasy. Board members questioned him at a recent meeting about plans to acquire more property on behalf of Friends of Bay Street or some other entity, and they have expressed frustration over what they say is his lack of transparency about his plans

Both Mr. Potter and Ms. Mitchell have repeatedly denied that Friends of Bay Street were interested in buying anything but the Water Street Shops building, but Mr. Potter said this week one of the theater’s backers — he would not say who it was — was interested in buying the National Grid lot for parking and a potential future site for housing for its artists.

Ms. Mitchell asked whether it really mattered if the would-be buyers were Friends of Bay Street or some other entity if, “at the end of the day, it is still going to be for Bay Street.”

Mr. Potter likened village officials questioning his transparency to the kettle calling the pot black.

He said the village had not divulged its interest in the National Grid lot and questioned whether it planned to use the lot for paid parking, even though Mayor Mulcahy said at a recent board work session that there were no current plans to have paid parking anywhere but on Long Wharf.

In response, the mayor said it was premature to talk about whether the lot would be used for paid parking. “There’s no way to know that without a lease,” she said.

If it were to come down to a bidding war between the village and the theater, the village would seem to have the inside track. Under state law, if a utility wants to sell a property, a municipality does not have to submit the highest bid.

“A utility does not necessarily have to get the highest dollar, but it should make a decision based on the highest and best use,” said Trustee James Larocca, a former chairman of the Long Island Power Authority and board member of KeySpan. “And under the appropriate circumstances, it can even mean the company can donate the property for a valid public use.”

All parties agree the National Grid site comes with baggage. Before it was home to a big blue gas ball called a Hortonsphere, which was designed to regulate pressure in gas lines, it was the site of a manufactured gas plant from 1859 to 1931, where coal was used to create gas. That plant left behind the legacy of tar and other volatile organic compounds that seeped into the groundwater, resulting it being listed as a Superfund site. After the gas ball was dismantled, the site was remediated, with 10 feet of soil excavated, replaced, and sealed under a rubber membrane 2 feet below the surface.

Although the New York State Department of Environmental Conservation declared the remediation complete five years ago, it requires that any future owner or lessee follow a detailed list of requirements such as notifying the DEC in the event the membrane is to be pierced. And if additional remediation were to be needed, access would have to be provided to the site.

“I do know the property comes with that caveat if there is remediation that needs to be done, it has to be accessible,” said Trustee Bob Plumb, a contractor by trade. If someone were to construct a building on the site, they would have to be prepared that excavation would be required around or even under their building. Mr. Plumb said the contamination had come from the site itself, and not a traveling groundwater plume, making it unlikely the problem would return. Still, he said of the property, “It doesn’t really lend itself to building.”