By Douglas Feiden
An Amagansett-based developer and equity partner bought the crumbling, unsafe and unsightly Morpurgo House at 6 Union Street for $1.325 million in a dramatic and tension-filled public auction on the steps of Southampton Town Hall on the morning of Friday, June 24.
Mitch Winston, a 44-year old investor whose other passion is playing guitar in a group called the Band of Natural Selection, prevailed by outbidding a principal of the property’s mortgage holder, who was prepared to pay $1.25 million, but stopped at that amount.
The mortgage lender, Atlantic View Holdings LLC, had won a court judgment of foreclosure and sale against Captain Hulbert House LLC, the owner of record of the derelict structure, and the auction was ordered by a state Supreme Court justice in March in order to satisfy $1.145 million in debt on the Sag Harbor property.
That was the exact amount initially bid by Mr. Winston. For about 30 seconds, no other parties came forward. Then court-appointed referee Michael Ahearn asked if there were other bidders. A man who declined repeatedly to give his name then said, “$1.2.”
Mr. Winston appeared taken aback. He asked the surprise bidder to prove he had brought a certified check for 10% of the bid, as is generally required in the public auction process. At that point, Joel Zweig, a lawyer representing Atlantic View, disclosed that the anonymous bidder was a principal of the lender, and accordingly, did not have to produce the 10% under auction rules. Mr. Ahearn concurred.
“Add a thousand dollars,” said Mr. Winston. Without missing a beat, the rival bidder said, “$1.25.” Asked by reporters if he would identify himself, the man shook his head to signify, “No.” Asked if he preferred to be discrete, he waved his head to signify, “Yes.”
Mr. Winston requested a brief break in the auction, and Mr. Ahearn assented. Three minutes later, he returned to the steps of Town Hall, and said, “We bid $1.325 million.” The Atlantic View bidder shook his head, “No.” And Mr. Ahearn than announced, “There being no further bids, the property is sold.”
Effectively, the unnamed bidder had elevated the sale price by $180,000 for the Morpurgo House, which is tucked behind the John Jermain Memorial Library and named for the two eccentric sisters who owned it until 2007.
Mr. Winston then proffered a certified check for $135,000 — he had brought several checks of differing amounts since he had no way of knowing the final sale price — representing slightly more than 10% of the sale price.
“It was a little tense,” he said. “I didn’t expect that.”
That concluded what was the fourth known auction for the house, which was built in the 1850s. The two-and-a-half story, three-bay, Italianate frame residence once boasted clapboard cladding and eyebrow windows and operated as the Lobstein Boarding House, from around 1870 into the 20th century, according to the National Register of Historic Places.
In a follow-up interview on the Town Hall steps, Mr. Winston, who was raised in Westchester County and graduated from the University of Pennsylvania, said he was buying the property with two partners, both longtime friends who were not immediately identified, through an Amagansett-based limited liability company, NYHO.
“Whatever we do, we want to work closely with the village and help preserve the architectural integrity of the village,” said Mr. Winston. “We’d like to save as much of the house as possible. And our very first step will be to secure the property and begin to work with the village.”
Of course, the long-abandoned house with its grand architectural pedigree is in horrific shape at present. It has long been deemed unfit for human habitation, and the Sag Harbor Board of Trustees has called for its demolition as a “fire hazard and vermin-breeding ground” in imminent danger of collapse.
“The physical condition is such that it may warrant that some of the structure may have to come down,” said Scott Strough, the founder of Strough Associates, which is now part of Compass, who attended the auction with Compass’ Christian Lipp as the two brokers for the buyer.
“Our first priority will be to work in partnership with the village to make sure the property is safe and secure,” he added.
At that point, Sag Harbor Trustee Ed Deyermond, who attended the auction on behalf of the village board, said, “Amen, brother!” He had long advocated at trustee meetings that the property, as a public nuisance and safety threat, should face the wrecking ball.
“We understand the significance of the property, and also the significance of the location,” said Mr. Strough. He offered a commitment to document and photograph the house and its architectural features, which had long been sought by village preservationists.
“When you look at the economic equation, the value is in the historical retrieval of the house,” he said, explaining that the economics of the deal and the historical significance of the property and its exterior are closely linked.
Mr. Deyermond seemed impressed: “They sound committed to restoring the exterior of the house, and to maintaining the architectural delicacy of the house,” he said.
Also on hand for the auction was Mia Grosjean, a board member of Save Sag Harbor, who appeared heartened by the development. “Assuming that what we heard is true, this seems like the best possible outcome,” she said. “We’re glad to hear that they’re going to work with the village and community groups to preserve the architectural integrity of the house.”
Asked if he intended to live in the house, Mr. Winston suggested that his two partners might not approve of that notion and that it might be more likely that it would eventually be put up for sale. “To be determined,” added Mr. Lipp, the Compass broker.
The property’s troubled history includes a decades-long fight between sisters Anselm and Helga Morpurgo, two unsuccessful court-ordered auctions and a third, in October 2007, in which the residence sold for $1.46 million.
It later became entangled in a mortgage fraud scheme that landed an ex-Suffolk County legislator in jail and changed hands between different investor groups amid earlier efforts to foreclose on the mortgage.
Mr. Winston said he was optimistic as he headed toward the auction for a very personal reason that involved his late father, Marshall Winston. Father and son used to golf together, using a golf ball that bore the logo of the International House of Pancakes, and when the senior Mr. Winston died, he was buried with the IHOP ball.
His son hadn’t seen such a ball in a very long time, and then, right before the auction, he found one on eBay. “I knew we would win,” he said. “It was like he was sending me a sign.”