Southampton Town bought out East Hampton Town’s half share in the Poxabogue Golf Club last week. Southampton now owns the whole thing. This is a happy ending to a long and interesting story about this public golf course that sits wholly within Southampton Town but within a three wood of East Hampton.
It’s a story about greed, death, golf, sex and lies. No, actually, it’s just the first three. But it’s good enough.
The golf course, which is nine holes, was originally built back in the 1930s because the local farmers and merchants, and also the tourists, could not play golf at the private clubs built by the rich. It was a small potato farm originally. Actually, it was not really enough land for nine holes. So they built six par 3 holes and three par 4 holes. Voila. Nine holes.
Around 1965, the family that built it improved the property. Originally there had been a small building where you could pay the $5 bucks to play, rent some balls and perhaps some clubs. Now there was a new building. About a quarter of it became the place to rent and pay. The rest of it became a luncheonette, today famously run by Danny Murray. Golfers could eat both before and after a round.
In the mid-1990s, the woman who had inherited Poxabogue from her parents lay on her deathbed. She was approached by three Hamptons millionaires who, through intermediaries, offered her $1 million for it. She didn’t sell, but after her death, the estate sold it to them.
One of these buyers really wanted to continue the club, or so it seemed to me at the time covering this story as it unfolded. The other two wanted to either put up a 45-house housing development or, if that scared everybody—Poxabogue was a real recreational plus for the community—force some person or group to take it over to save it from a horrible fate as a housing development. In terms used by developers, this is called “flipping” a property.
The developers made lots of noises about what they wanted to do. They did, to their credit, spend a lot of money to improve the club in the second year of their ownership. They brought in a pro. They groomed the golf course beautifully though they jacked up the rates to play a round about fivefold to cover that cost. They spruced up the driving range. Their proposal to put in an “environmentally positive” miniature golf course near the driving range got everybody talking, mostly about how they would hate that. The crowds would come. It would be lit at night. Help!
So flip it they did. The sellers wanted $6.5 million for it—to what should have been the Town of Southampton. But Southampton said this was a pretty steep price to pay. They also noticed that since the course was practically on the town line with East Hampton, many golfers came from that town. In the end, they persuaded a free-spending Town of East Hampton to split the cost and ownership of the purchase. And so, in March 2004, they jointly bought the golf course to save it. Until this latest turn of events, the two have owned it jointly, setting it up as a small business with the two entities hiring a management to run it.
An interesting development happened in 2007. In that year, the people living in Sagaponack created a village they wanted to carve out from the Town of Southampton. It would include Poxabogue. The people in that community voted almost unanimously to have that happen, and so it did. So now you had a golf course owned by two towns within a village.
Now, the two towns owned it. The impetus for Southampton buying out East Hampton’s half was the discovery several years ago that that old supervisor in East Hampton had been going on a spending spree with CPF money, that was intended to be used only for open land preservation. East Hampton was in big trouble. Southampton is, essentially, helping East Hampton in the bail out.
The towns had the golf course appraised, of course. It came back at about $4.4 million, down $1 million from the good old days before the real estate crash. So Southampton has to pay East Hampton $2.2 million.
In researching this story, a number of interesting things about the arrangement between East Hampton and Southampton here at the golf course have come up. Turns out that in their arrangement, either town could have sold its half to another entity. It would have been an unlikely event, but consider that if it did, you might have to pay one fee to play holes two, seven and eight, and another fee to play the other holes, except maybe for the ninth hole which would be for the personal use of the new half-owner and his family. Another odd thing is that Southampton Town at the time the club was purchased from the developers, got the money to pay them by legally dipping into the 2% Community Preservation Fund money, thus actually saving half the course from ever being developed. East Hampton Town did not do the same. They borrowed the money, long term at pretty high interest rates.
East Hampton will not only get the $2.2 million for their half share, they will also look to recover some of the course’s revenue, which is specifically used for course maintenance. These amounts will enable the new East Hampton Town Supervisor, the new broom sweeping clean, to be able to pay off that bond in the next few years and thus avoid about $288,000 in interest fees they would otherwise have to pay over the years.
Southampton is also now in a position to charge less to town taxpayers for the use of the course than for “out of towners” which could include East Hamptonites—and even Sagaponackers. Hopefully that won’t happen. Right?
Did I mention that Southampton golfers are better than East Hampton golfers?