Longtime residents of Sag Harbor remember the humbly named “gas ball lot” as the old resting ground of a gigantic blue ball that was, well, full of gas. Since 2016, the village has leased the lot from KeySpan Energy (d.b.a. National Grid) and used it for parking.
It became the center of controversy this week when the village petitioned the Public Service Commission to nullify a new lease on the property, held by Adam Potter through his 11 Bridge L.L.C. If the commission lets the lease stand, it will begin on Jan. 1, and the lot would be out of the village’s control for the first time since 2016.
The Public Service Commission regulates the state’s utilities. Mayor James Larocca served as a commissioner from 2008 until 2013. Before joining the commission, he was the chairman of the Long Island Power Authority. He knows his utilities.
“This deal is not in the public interest. Period. Exclamation point! Giving the parking lot to a for-profit will do irreparable harm to this community,” he said in a press release this week.
If you’ve walked through the dusty, chain link-surrounded lot, it’s not a place you’d expect to be nostalgic about. Originally purchased for $2,893.71 in 2019, it is appraised at $1.975 million. Why is it such a big deal?
“For one thing, it’s almost 100 spaces,” said Mayor Larocca in a phone call. “We’ve had it in our possession since the remediation ended, under a lease and series of extensions with the utility that cost the village a dollar a year. We’re losing it to a private owner.”
James Denn, a spokesman for the P.S.C., said in an email, “The petition submitted by National Grid regarding the possible lease of property in the Village of Sag Harbor remains under review, including any comments that might be submitted.”
At the time of publication, zero comments had been submitted by the public.
Under the agreement, Mr. Potter’s L.L.C. will lease the property for 99 years, paying $400,000 up front for the first 10 years, and then $50,000 annually for the next 15 years. From there, the annual rent would increase 5 percent every 15 years.
The lease describes how the gas ball lot was originally offered for sale, and says Mr. Potter was interested, “with plans to use the parking lot for public parking to support planned development” of adjacent affordable housing as well as a theater near the property.” However, National Grid decided to hang on to the lot, “to provide the company with, and to ensure the company maintained, the right to access the property as needed to comply with its existing environmental remediation and monitoring obligations.”
National Grid received four written offers to lease the property, including one from Sag Harbor Village. They selected Mr. Potter’s offer, “not only because it was the highest price offer and contained no contingencies, but also due to the Lessee’s commitment to comply with and incur any cost associated with the environmental requirements and allow the company access for remediation and monitoring.”
Mr. Potter also agreed to use the property “solely as a ground-level-only open-air parking lot.”
“The award to him as written is for a use that he will not be legally entitled to have,” said Mayor Larocca, “because the code does not allow the operation of private parking lots in the village unless they are in service to a primary use on the property. In the village attorney’s view, the award as written cannot be implemented because the legal use of the property is not possible.”
However, Mr. Potter seems to have plans for the lot that tie it directly to his 110,000-square-foot mixed-use project, including 34,000 square feet of retail space and 79 affordable apartments, that borders the lot.
“We have given Sag Harbor the first proposal for an affordable housing development. We need the parking lot for the project, but we would be more than happy to enter into discussions with the village to determine how we can share the parking lot,” Mr. Potter said by phone.
The gas ball lot has long been in Mayor Larocca’s thoughts. In 2015, he became a village board member and in 2016 negotiated a five-year lease between the village and National Grid so the village could use the lot for parking.
“The primary duty of the Public Service Commission is to act in the public interest,” he said. “Leasing the lot to a private company fails miserably in that regard. Taking a public asset and giving it to a private entity that was switched into place at the end of the bidding process is troubling.”
Selling the property to Friends of Bay Street was arguably in the public interest, he said, since it would have benefited the theater. “Now, the only benefit is to Mr. Potter’s property. That switch alone should raise the hackles of the commission.”
“A day doesn’t go by where I don’t hear about parking,” the mayor lamented. “Removing those spots will do irreparable harm to the business district. This is not only a loss of parking, but a loss to an operator with a troublesome history and reputation in the village.”
State Assemblyman Fred W. Thiele Jr. weighed in yesterday, sending a letter to the P.S.C. in support of the village’s petition. “I fully support awarding the lease of 5 Bridge Street to the Village of Sag Harbor,” he wrote. “This deal would cause irreparable harm and is not in the public interest. I urge the Public Service Commission to complete a thorough review of the proposed transaction that is deeply flawed and disapprove the National Grid application as submitted.”
The big blue ball was dismantled in 2006.
