Backstory: How the White Farm in Sagaponack Sold for a Song

The White Farm in Sagaponack, about 57 acres, was founded in the 17th century by Ebenezer White. Remarkably, run by the White family, it remained intact as their potato farm through to the end of the 20th century.

But in 1993, a Texas oil man said he’d like to buy it. The oil man, Tony Petrello of Houston, had rented one of the many structures on the farm the prior summer. It was oceanfront, a small shack of about 650 square feet, which, along with six other shacks lined up atop the dunes for a quarter mile, were rented out to summer people from Memorial Day to Labor Day. Petrello befriended Red White, the patriarch of the family. It worried Petrello that with Red getting older and none of his four children interested in taking over that perhaps a big developer might come in and buy the place, ending its long run.

As a result, in 1995, after an appraisal, White contracted with Petrello to “save” his farm – Petrello just wanted 11 acres and the ability to enlarge the little shack sitting on it, that was all – for $2 million. The two men also agreed, that after the town approved some zoning matters, Petrillo would pay an additional $8 million for the rest of the field. Furthermore, Petrillo would have a right of first refusal if, during the time it took to get the approvals, some other buyer made an offer. Petrillo would match it, plus a dollar.

After a time, however, the value of the land began to skyrocket. A year went by. Now it was worth double the amount it had been agreed to. White, now asking more, postponed the closing. He did this not once, but several times. By 2000 it still hadn’t closed. The property was now worth about $25 million. Petrello would still only agree to pay only what he’d agreed to. Things began to go sour.

And when White postponed still again, Petrello sued him. Now the matter would be drawn out even further. And the value of the property was continuing to go through the roof.

More years went by and still nothing was decided. In 2008, Red White, who was now in failing health, set up trust funds for his four children and then contracted to transfer the farm to them. Rather than get new appraisals — the property might be appraised for $50 million now and the tax burden would be impossible – White made the transfers add up to about the same amount as he had agreed to sell it to Petrello for. That tax burden would be affordable.

But Petrello intervened. His agreement said he had first rights of refusal if other offers were made. Here were other offers. So he bid the dollar more, and he went to court with still another lawsuit to enforce it.

In the end, 10 years later, Petrello won. He got to buy a 57 acre farm worth, by that time, perhaps $100 million, for $8 million plus a dollar.

But the whole community was up in arms now. And during the interval, the powers that be pulled levers resulting in the farm remaining intact, but with its development rights compromised. Only farming could take place on it. With that it would never be worth much.

The powers that be also scuttled Petrello’s attempt to enlarge upon the shack he’d purchased before everything went south.

Where this shack existed, and it already had been torn down with a larger house only partially constructed, it was declared a flood zone. And so ended his right to build there.

Farming had won. The Whites had lost. But then won by getting about $15 million for selling the development rights. And Petrello had won, but then lost. And the farmland now is in potatoes, with the tractors running back and forth driven by local farmers with leases from Petrello for not much, and the potato plants growing as always, and that is how this story ends.

Have a East End real estate story? Want to share? Text us at 516-527-3566. We’ll call you back, and then write it up for this weekly column. –Dan