Amid Preservation Efforts, Farmland in the Hamptons Goes for Other Uses

Posted on Aug 5, 2014


Even in the Hamptons, $12.5 million is a lot to pay for a piece of property, especially when the only things that will be allowed to sprout on it are corn and potatoes. No new houses. And for the first time, horse farms and vineyards will not qualify, either.

At $378,000 an acre, the farmland — two parcels along Noyac Path in Water Mill — is some of the most expensive in the country, but for the Town of Southampton, the price was worth it. And Southampton is not even buying the land, but merely the development rights to it.

“Everyone who lives or visits here appreciates that we have not only beautiful beaches and bays, the classic resort experience, but we also have this rolling landscape and agricultural atmosphere, and that’s a very unique combination we’re fighting to preserve,” said Anna Throne-Holst, the town supervisor.

Suffolk County pioneered the practice of buying development rights in the 1970s to protect its agricultural heritage and shield farmers from soaring estate taxes as developers competed for their properties, driving up land values. But just because homes could not be built on protected parcels did not mean the land would remain fertile for farming.

Over the past decade or so, it has become increasingly common for developers or neighbors to buy protected land and, preferring the patter of horses to the clatter of tractors, turn it into private equestrian complexes or simply giant lawns surrounded by hedges. The hedges and horses mean not only less local produce but also fewer of the bucolic potato farm vistas associated with the South Fork, and an increased feeling of an expensive enclave.

“Even the protected parcels started selling for six figures, which might be cheap for some folks but is prohibitively expensive for farmers,” said John v.H. Halsey, president of the Peconic Land Trust, which has arranged hundreds of these deals. “It is especially frustrating for the public, who already spent money on land they thought they were protecting for farming to find out it’s turned into a gated compound.”

Just up the Scuttle Hole Road from the Noyac parcels is one of the most famous examples: a 26-acre horse farm Madonna bought for $6.5 million and an adjacent 24-acre agricultural field she bought for $2.2 million. She built high fences around both properties in 2013 and used the field as a staging ground for construction, both of which were forbidden by the town’s prior purchase of the development rights there.

The terms of the Noyac sale are an attempt to turn this tide.

In addition to buying the development rights on the 33 acres, the town has also bought the equestrian rights, vineyard rights and restrictions on leaving land fallow for more than two years — a measure to combat those baronial lawns. There will also be limits on how much the land can be sold for, not unlike income-restricted co-op apartments in New York City.

On Tuesday, the Peconic Land Trust will begin accepting applications from farmers to buy the land for roughly $26,000, or a 93 percent discount from what the town paid.

“No one imagined this land would ever be used for anything but farming, but now it’s nice to see the town taking a stand and doing something about it,” said John L. Halsey, the 11th-generation operator of the White Cap Farm on Mecox Bay and the head of Southampton’s Agricultural Advisory Committee (and a distant cousin of the land trust’s president).

The town can afford to buy these additional development rights in part because of the resurgent real estate market. In 1998, the Peconic Bay Region Community Preservation Fund was created to buy farmland, historic landmarks or wetlands, financed by a 2 percent transfer tax on property sales in eastern Suffolk County. This year, Ms. Throne-Holst said, she expected the fund for Southampton alone to top $50 million; even during the down years it was earning about $20 million annually.

Of the 34,000 acres of farmland in Suffolk County, only 12,000 have been protected so far, although on the South Fork, only about 1,000 acres remain unprotected, the land trust estimates. The amount of protected land that is fallow is unknown.

The real estate community is sanguine about the prospect of renewed competition from the town.

“There are some buyers who might be dissuaded from a property because it abuts a working farm or they really want some massive acreage, but I think for most people coming to the Hamptons, that is what draws them here in the first place,” said Tim Davis, the Corcoran agent who brokered the sale of the Noyac Path parcels.

The property was originally listed for $10.8 million, and the town had to beat out half a dozen developers for it in a sealed bid.

“It could have fit 14, 15 homes,” Mr. Davis said. “This way, my other properties become more valuable for it. And we get to keep the farms.”

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