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Southold Town could delay multi-million dollar renovation project

After weeks of debate, Southold Town might pump the brakes on a proposal to build a new town hall and renovate the town hall annex, a former bank the town hopes to convert into a justice court.

The original estimated cost for the plan was around $37 million, although more recent discussions about potentially narrowing the project’s scope brought estimated costs down to $32.5 million.

At a town work session meeting Tuesday, Town Supervisor Scott Russell said he needs more time to consider the proposal, despite a request made by town engineer Michael Collins at a June 29 work session for the board to choose a path forward by the end of July.

“The issue is, we’re talking about 30 days here. I have 30 days to consider $32 million in capital project funding … [which] would probably equal all the other capital projects we bonded since I’ve been here, which has been a very long time,” said Mr. Russell, who expressed hesitancy at the town’s last work session as well. “The vulnerability of that building isn’t going to change much if I need an additional 30 days or whatever it is. That’s the reality.”

The request to push back the timeline came after town comptroller Kristie Hansen-Hightower outlined tax hikes the town would need over the next few years to cover the cost of the project.

“Overall, you’re looking at about a 5.83% property tax increase for this project” based on current cost estimations, which would require the town to ultimately cover about $2.2 million a year in debt payments, she said. The tax increases could be phased in over three or four years and would only cover the cost of the project, excluding any additional costs for “whatever we need just to keep operations going,” Ms. Hansen-Hightower said.

As of right now, she explained, the project is broken up into phases. The town would need to borrow funds to pay for part of each phase each year.

“The town is in a good cash position that if we run short, we could loan ourselves until we borrow more, provided that all of that’s authorized,” she added. She does not believe the loan plan she outlined would hurt the town’s bond rating, which is currently very high.

Ms. Hansen-Hightower said she only received the debt service projections from a fiscal advisor yesterday afternoon, so these numbers are “quick calculations” that she and her deputy need to look over.

Town Board member Jim Dinizio expressed frustration with the plan, exclaiming that the town is “back to square one” and it would be “crazy to take that building and try and make it into a court right now.”

“We purchased a building and now we can’t use it properly,” he said. “… In my opinion, it means selling that building and using it for something else.”

Mr. Russell pointed out that the town purchased the bank building because it’s “a historic building in the middle of a historic village,” not just to convert it to a justice court.

“When you buy a historic structure, you buy a certain amount of obligation to maintain that historic structure, even if it costs more than new construction or construction that isn’t that old,” he said.

Town Board members floated a few other suggestions during the work session, but did not seem to want to move forward with any of them. Board member Louisa Evans questioned at one point whether it might be more cost-effective to use a different town-owned building to house the Justice Court, such as the recreation center.

“We’ve looked at all those and for various reasons, we haven’t come to an agreement to make any of them work,” board member Jill Doherty responded.

Mr. Russell added that many of the buildings “aren’t as big as they look,” and converting the rec center would sacrifice “a lot of recreational assets.”

Ms. Evans suggested that it might be less expensive to build a new rec center instead, but Ms. Doherty said it wasn’t “nearly big enough” and they’d still have to replace the dog park.

“There’s a lot of moving parts there that I think that we still wouldn’t reach anywhere near sufficiency where we need it and the space where we need it,” Ms. Doherty said. “It would end up being just as expensive … because we’d need to do the same stuff.”

Board member Sarah Nappa also asked if it would be possible to rope the police department into renovation plans, but Ms. Doherty said Mr. Collins had already investigated that proposal and the projects “are so separate and different … it’s really kind of impossible.”

Mr. Collins said the “dollar per square foot” won’t vary much from building to building because “municipal renovation is very expensive.” He emphasized that the annex roof is leaking and delays mean further water damage. He also acknowledged that the “major issue” with the town’s most recent plan for the renovated court is the underutilization of the basement and second floor.

“You’re being forced to renovate to a standard that you’re only going to use a third of the space,” he said.