Three Mile Harbor Road Development Plans Spark Skepticism on East Hampton Town Board Over Employer-Owned Housing

What was meant to be a discussion of rezoning a slice of land on Three Mile Harbor Road for affordable housing morphed into a question of whether employer-owned housing should be in the cards for East Hampton Town — and most on the Town Board appeared to think not.

Private developer Kirby Marcantonio, who bought the land earlier this year for $5.5 million, is looking to build 79 units of employer-owned, condo-style workforce housing on two parcels, each measuring 3-plus acres, on Three Mile Harbor Road, just south of Round Swamp Farm. The development would be a mix of two- and three-bedroom condos.

But the idea was met with a platoon of speakers, almost all in opposition, at the project’s first public appearance, which came before the East Hampton Town Board on Tuesday. Ultimately, the board opted to table the matter for another week.

One of the central questions is whether this novel approach to affordable housing — that is, employer-owned housing — actually counts as, well, affordable housing, and whether it would give employers too much power over the local housing supply.

Councilwoman Cate Rogers, opting not to comment on the specifics of the site plan, spoke up on employer-owned housing.

“Employer-owned housing raises broader policy issues that we have yet to discuss in public,” she said. “One is that tenants may face displacement due to workplace disputes, seasonal slowdowns, any type of loss of employment. The employer, therefore, has disproportionate power, in my opinion, over both employment and housing stability.”

What the employer-owned model means is an employer — say, Stony Brook Southampton Hospital, which has signaled interest in Marcantonio’s similar planned development on Pantigo Road — would buy a condo and rent it out to their employees. The terms of the lease would be between the tenant and landlord, but tenant income would be capped at 130 percent of area median income, which is about $142,000 for one person.

Most on the Town Board agreed that they would, at the very least, be skeptical of enumerating the employer-owned model for affordable housing in the town code.

Town Planning Director Tina LaGarenne pointed out that the conversation about workforce housing could have implications on Marcantonio’s other project, which is snaking its way through review and would see the model applied on Pantigo Road — notably, though, at a site that is already zoned for affordable housing.

“350 Pantigo was still going slowly through the process with an interpretation that maybe it was permissible under our code,” she said. “Now that I’m hearing this discussion, I think we’re back to: We need a code change.”

What the Town Board is specifically tasked with for the Three Mile Harbor project is twofold: Deciding whether it should rezone the property to allow for affordable housing and determining whether the town code should be amended to accommodate employer-owned housing.

On the latter, Councilman Tom Flight offered a voice in support, saying that the town is in a position with housing where it has to take drastic action and the private sector has to be a key part of that.

“I think that the concept of employer-owned affordable housing is not as novel and unique as we think it is,” he said. “Where I originally grew up, in the U.K., you had Bournville — that was developed by the Cadbury family. In the U.S., you have Pullman in Chicago. You have Hershey in Pennsylvania, Kohler in Wisconsin — all were developed by private employers to provide quality housing to their employees. I think that concept is relatively a good one.”

Buried amid all of this is that the 79-unit plan would exceed the town’s absolute cap on units allowed in an affordable development, which sits at 60, no matter the size of the lot, and that the development would be dropped in the historic Freetown neighborhood, which was settled in the 19th century by free people of African American and Native American descent.

The model, more broadly, at Three Mile Harbor Road would follow the blueprint established by Marcantonio’s other development — the one mentioned by LaGarenne.

The two Three Mile Harbor Road properties, one of which is home to a small house that would be knocked down, came on the market in the spring, for $5.5 million. Marcantonio, a workforce housing advocate and publisher of Montauk Life magazine, got involved when he saw it as a candidate for a workforce housing development.

Working with town officials, Marcantonio found a potential work-around for the 60-unit cap: The land is split between two lots, so the plan is to put 42 units on one lot and 37 on the other. Down the line, if the plan moves forward as is, this could require approval from the Zoning Board of Appeals.

So, 79 units total.

Which East Hampton Housing Authority Executive Director Catherine Casey took issue with. She spoke out against the plan, saying the housing authority regularly partners with private developers, but the proposal as submitted would not count as affordable housing. In her view, a singular owner for the homes would ensure greater compliance with housing laws.

“It is for private development, seeking favorable zoning and consideration under affordable housing rules,” she said. “With regard to co-ops or condos, it would be very difficult to manage and ensure compliance.”

Casey also spoke out against the idea of exceeding the absolute 60-unit cap for affordable units on one property.

“Seventy-nine units is too ambitious and runs contrary to the 60-unit cap for any given site, regardless of lot size,” she said. “Maximum 60 units at one site or project is a reasonable yield.

“The project, as proposed, maximizes profit for the developer and may be a benefit to local businesses, but does not appear to be truly affordable housing, which stabilizes community, promotes affordable year-round residency, allows for occupational and economic mobility of renters and includes a solid plan for responsible management and special permit compliance that does not burden the town with administrative functions,” Casey said.

A packed house at Town Hall on Tuesday echoed Casey’s comments, with many bringing up concerns about the impacts to the character of the neighborhood, the traffic implications, potential issues with the proposed septic system and the plan to exceed the 60-unit cap.

Paul King, who lives in the neighborhood, said that he, as a young person, supports affordable housing but that he doesn’t view the condo-style projects as the answer. He, like the Town Board members later in the work session, brought up the town code.

“The employer-owned condominium model is not contemplated anywhere in the town code, and requires new regulations and oversight structures that are not yet in place,” he said.

Members of the Niggles family, who have farmed Round Swamp Farm for 10 generations, showed up to the meeting to express their opposition.

“It’s a massive project that would destroy the neighborhood and what little farm presence, open space presence, there still is in the Freetown area of Three Mile Harbor Road,” Brian Niggles said.

Jonathan Moore, who is the attorney for the Freetown Neighborhood Coalition, only heard about the project on Monday night, the day before it appeared before the Town Board at a work session.

His reaction when he saw it: “Wow.”

“The Freetown Neighborhood Coalition will be presenting comprehensive comments on the proposal, and I just wanted to let you know we are here and we are listening,” he said.

Marcantonio said after the work session that he was surprised at how many neighbors turned out to voice their opposition to the idea, saying it was meant to be an informational meeting, not a public hearing.

“As far as the actual outcome of today, I think it’s pretty clear that we have a few things we need to do, but I believe that at least three of the members on the board are open to considering this for an AHO,” he said.

Asked which members, Marcantonio cited East Hampton Town Councilman David Lys, Flight and Councilman Ian Calder-Piedmonte — though the majority of the board did maintain reservations about the concept of workforce housing.

On that, Marcantonio said he thinks the concept is already built into the town code and that it now comes down to tightening the code to ensure it is done right.

“We spent almost two years going back and forth on workforce housing, trying to find where in the code it lived, and initially, it seemed to be hard to find,” he said. “Then we realized it’s right there in front of our eyes, the fact that businesses can own affordable housing — that’s one of the first sentences in the code, actually, that businesses or corporations, as well as individuals, may own affordable housing.”