Column: Farm buy was not a sweetheart deal

And I quote from the Nov. 17 edition of The Suffolk Times: “This is not a sweetheart deal.”

The speaker was Southold Town Supervisor Scott Russell, and the subject at hand was the purchase by the town of the development rights and fee title to the 31-acre Conway family farm on Horton Lane in Southold, just north of Lucas Ford.

Mr. Russell also was quoted as saying: “Yes, it’s a nice, easy out for the (seller), but it’s also an easy out to sell to a developer. The only difference is the development rights will be extinguished and the land will continue to be farmed … The Peconic Land Trust has worked long and hard to get them to agree to sell to us. This is a prime piece of farmland that was very much on our radar.”

Still, some inquiring minds — this one among them — were curious about the supervisor’s reference to a “sweetheart deal.” We wondered: why is he on the defensive? Is there anything about this deal that’s different?

The answer to the first question is that he wasn’t being defensive, he was responding to a direct question from a Suffolk Times reporter who used the term “sweetheart deal.”

The short answer to the second question is yes, it’s different from other farmland purchases undertaken by the town in that not only were the development rights purchased, but the underlying fee title itself was purchased with funds from $4 million farmland bond approved by voters here in 2007. And that’s never happened before, as far as I know. Couple that fact with the name of the sellers — the politically-connected Conway family — and you begin to understand why our reporter might have raised the “sweetheart” issue.

There’s another difference, but I’m assured it didn’t enter into the transaction. It turns out John Sepenoski, the chairman of the town’s Land Preservation Committee, is related to the Conway family — the property formerly was farmed by his grandfather’s brother, and the three brothers selling it to the town are his uncles — but he appropriately recused himself from all discussions and votes on the acquisition.

Mr. Sepenoski also wishes to correct two things that appeared in the original news report.  He wrote in an e-mail this week: “First, De Lea [Sod Farms] isn’t the tenant. [In fact, it’s Briarcliff Sod.] Second, the article either stated or implied that the bond was specifically to be used for distressed estate sales. This isn’t true. The bond was set up to allow the town to purchase fee title to farmland and then resell the land, which is not allowed under the [Community Preservation Fund] law, which gives the town more flexibility with its preservation program in that they can deal with owners who want or need to sell out completely and not preserve now and sell the farm at some time in the future. A distressed estate sale is one possible example of how the bond can be used but there are others.”

Now, the raw numbers. The town paid $62,500 per buildable acre for the development rights, which is consistent with other recent development rights purchases here. Add to that the $22,500 per acre the town paid for the fee title and the Conways will receive a grand total of $2,635,000. That adds up to $85,000 per acre, which the town’s Land Preservation Coordinator, Melissa Spiro, considers “fair market value… and certainly not on the high end.”

Sweetheart deal? Yes, indeed, according to one knowledgeable source who requested anonymity when I spoke to him, but sweet only for the taxpayers of Southold Town. And that’s because the $22,500 per acre paid for the fee title is well below current market values, and will be recovered when the town sells the property, presumably as soon as possible, to someone who wants to farm it.

But hold it right there, another anonymous source points out, warning that the town should not “short sheet” other area farmers, in effect forcing them to write down their balance sheets some $10,000 per acre by undercutting prevailing market prices. Instead, he maintains, Southold must get the property appraised and not sell it for anything less. And to this Ms. Spiro responds: it will be sold at the “highest fair market value.”

And then, of course, there’s the question of taxes. At first, I thought the property might be taken off the tax rolls when the town takes ownership, but Town Assessor Kevin Webster assures me taxes still will be collected, albeit at the standard 50 percent discount due to the sale of the development rights, and that the tenant, Briarcliff Sod, will be picking up the bill until its sold to someone else who wants to farm it.

So, so much for this aborted attempt at investigative journalism. It began by conjecturing that the town might have paid too much for a farm in a “sweetheart deal” that bailed out a well-connected family. It ends concluding quite the opposite.  
Never mind.