Gurney's Inn
July 19, 2006

Reassessment: A Sag Harbor Horror

There is something very wrong in the Village of Sag Harbor.

A band of residents turned out last week for a Southampton Town Board meeting to question a recent reassessment that sent property values soaring and socked scores of worried homeowners who've been left wondering if skyrocketing taxes will push them straight out of town.

Far from being the epicenter of the glitzy Hamptons, Sag Harbor is a community of modest, old houses — many 200 years and more — with tiny yards too small for pools. Yet, to look at the recent reassessment values assigned to the houses, which are supposed to represent the actual value, one would think they were viewing a list of elite South of the Highway manses.

The bottom line, say residents, is the reassessment was botched. And the general consensus amongst the group was that the town should scrap the results and start over.

"There's a bias in Sag Harbor village because it's such a small area and you have sub neighborhoods," said resident Stacey Pennebaker. The problem, she said, has to do with the sale of a few high-end houses in recent years which have commanded steep prices and tipped the scales unfairly for other homes in the area worth far less. Because assessors use an area median to calculate end results, the "land value becomes very overpriced," she added.

Though a couple vanity purchases probably skewed the average sale prices, there is quite a difference between a completely restored mansion once owned by a whaling boat captain or wealthy merchant and the aging, smaller cottages with creaky floors, drafty windows and sagging roofs that more than make up the heart of Sag Harbor.

A review of the figures show startling irregularities. A tiny cottage in a flood zone that was valued at $417,000 two years ago was reassessed at $1.55 million. Another house on Grand Street assessed at $1.9 million recently sold for $1.1 million. A house on Howard Street tripled in assessed value, to $2.4 million.

Pennebaker said there are over 100, and perhaps as many as 500, properties that have been over-assessed.

The end result sparked outrage across the board as many residents grapple with higher taxes they are unable to pay — there is a large population of seniors in the village on fixed income.

"You have refinished houses, which have been redecorated and have new electric and plumbing, next to older houses that haven't been done in 50 years, and they're considered the same in terms of value. That's crazy — you couldn't sell the older houses at the same price," said Pennebaker.

The reassessment, she added, doesn't take this slanted reality, or halo bias, into account.

Other residents took to the podium at Tuesday's Southampton Town Board meeting to plead for help and to paint heartbreaking portraits of lives ripped apart by fear over being forced out of their homes.

"The reality here is you have to take a look at what you have done to people in the Village of Sag Harbor," said Ted Jeremenko. "Many of these residents are old people who don't have the means to address what you've done to them — they are too sick to come out for grievance, and not rich enough to hire [attorneys]. Nobody cares what happens to them."

Brenda Noa, who recently resigned as Southampton Town Assessor, said, "I know everything went up," but she wasn't aware of the specifics. She said she was going to send someone to physically inspect some of the houses in question. Pennebaker said she wasn't aware of anyone showing up, however.

Jeremenko and others believe the problem lies with a flawed calculation formula that spewed out the wrong numbers. "I know how dangerous a computer can be," he said. "If you don't check the results of the computer, you'll never know if the outcome was wrong."

Another resident agreed: "Whatever you put into the computer is only as good as the person who does it."

The recent reassessment, said residents, ended with some "irrational" outcomes.

One resident said her property, which equals only eight hundredths of an acre, was appraised at $866,000. "I think that's a little high," she said, especially for the accommodations: "I'm living in a dump." Her 1906 home sports its original plaster and no insulation. "During the winter, I live in two rooms. I shut the rest of the rooms off and use a gas stove to heat my house."

The reassessment could have terrifying repercussions: "I made $14,000 last year. I pay almost $5000 in taxes already, and now my taxes are $8000. That's more than half of my yearly income, before the bills are paid. How am I supposed to live? Who is going to help me?" the speaker asked.

Southampton Town Supervisor Skip Heaney empathized and said Human Services offered programs to help with such cases.

Others complained the procedure used in the recent reassessment were "baffling" and insisted there was no way their homes could fetch such steep prices at point of sale. Some felt the process was "devious and underhanded."

Richard Blowes, Southampton Town Management Services Administrator, attended the meeting. He had said previously that some of the homeowners who filed grievances would probably see some adjustments, though Pennebaker said the first wave of returns left the assessments unchanged.

Blowes outlined the "blind process" used, during which the value of construction of homes was based on standards used across the country; land analysis and comparable sales were also components.

The next step after filing a grievance — a road taken that many say did not result in lowered assessments — is for residents to go to small claims court, a process for which no attorney is necessary, or to hire an attorney and go to the Supreme Court.

Blowes insisted the answer does not lie in going back and scrapping the reassessment.

"We can look at issues and go forward. This is not an adversarial process. We're here to help."

But it soon could become adversarial. "These people are very angry," Pennebaker warned. "We're not hiding from anybody," Heaney said.

The Village of Sag Harbor, said Heaney, is not obligated to accept the Town's assessment but could hire an assessor and conduct its own reassessment.

In the future, he said, the role of the tax assessor's position will be redefined, with a focus on community outreach.

While Pennebaker said the board and Blowes made an effort, there is a need to keep the issue on the front burner. "Talk is cheap," she said.

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