August 16, 2006
Reassessing the Reassessment
For as many as 500 homeowners in Sag Harbor's historic district, the startlingly high assessed values assigned to their properties under the recent Southampton Town-wide reassessment will soon be a thing of the past.
According to Sag Harbor Mayor Gregory Ferraris, the inflated assessments were the result of flaws in the formula used to calculate the values of the houses. Approximately 500 homes in the village will receive a new assessed value in September after corrected numbers are run through the formula.
During the recent reassessment, home values were determined using two components: regionalized construction costs and land value. There were insufficient sales of vacant land in Sag Harbor during the two year period examined by the town during the reassessment process, "so then the way that you value the land is to look at the transfer of properties that are improved," Southampton Town Management Services Administrator Richard Blowes explained. The value of the home and improvement are subtracted from the transfer price, and the remainder reflects the land value.
During the assessment, a standard value was assigned to determine the per square foot value of homes, but in Sag Harbor's historic district, home improvement costs are much higher because many homes are renovated and restored in painstaking detail. "That's where we ran into a problem," Blowes said. Because the higher restoration costs were not used in the formula used to compute land value, "we inflated the land in that area," he said. Similar problems occurred on a much smaller scale in parts of Remsenburg and Southampton Village, Blowes noted.
When the new assessment was released, some Sag Harbor residents saw astonishing increases: a home on Howard Street tripled in assessed value to $2.4 million. A house on Grand Street that was assessed at $1.9 million recently sold for $1.1 million.
At the prompting of Rick Murphy, The Independent's Editor-in-Chief, who grew up in the affected neighborhood, Blowes contacted Sag Harbor resident Stacy Pennebaker, whom Blowes described as "very, very familiar with the historical properties."
Based on the information provided by Pennebaker and an examination of the assessments in the historic district, Blowes and the town's new assessor, Ed Deyermond, met with Ferraris and Sag Harbor Village Trustee Brian Gilbride, Pennebaker and others on August 7 to discuss revising the assessment for 500 homes in Sag Harbor. "The town had done quite a bit of homework and lowered the assessments on a whole bunch of properties," Gilbride said, adding that the meeting was "a great start."
"We took into account the corrected value of the improvement, thereby reducing the value of the land, and having a lower rate, which was then to re-compute the values," Blowes explained.
The new assessed values will be provided to the town's Assessment Board of Review by Deyermond, and, according to Blowes, the board is expected to approve the changes.
"We feel good right now. I'll feel a lot better in December when the bills come out and hopefully we don't have some kind of uprising then," Gilbride said.