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August 1-15, 2008


REAL ESTATE

Deeds & Don'ts
By Scoop Drummond and Aime Dunstan

INSIDE STORIES BEHIND AREA REAL ESTATE DEALS

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NEVER A DULL MOMENT
Further proof that August seldom disappoints real estate buyers and sellers is the report that jeweler David Yurman and wife Sybil have purchased the former home of restaurateur Warner Leroy for a price considerably above asking. We're told there was an unexpected bidding war at the last minute, driving the price far beyond expectation. The property was originally purchased from the Leroy estate by investor William Landberg and partner Rich Gherardi. They then sold off the main house and 10 acres, plus an adjacent 3.5 acre lot to developer Michael Minkoff, who had the house on and off the market for three years. The Yurmans bought the main house and next door lot to gain access to an adjoining one acre pond. Now Landberg and Gherardi are offering the remaining six acres for with house for $9.9 million. For more information, contact Richard Gherardi, Sand Dollar Development, (631) 324-7883.

BIG FISH LIKE THE OCEAN
Despite whatever woes exist in East End residential real estate, demand for overpriced and overwrought East End fortresses remains. While some prospective purchasers are currently holding back, lolling like scared little lizards comatose on a rock, remaining unperturbed—so far—are the sweaty palms of big money buyers with this notion: they want the Hamptons bounty of Monopoly munificence—oceanfront is critical to maintaining status. Huge wealth wants more than ever to luxuriate in these summer seats of privilege—if only to deposit a drop of spit on the surf.

As for top notch offerings, no matter the price, major positioning is a rite of preordination. These days, what qualifies is open to interpretation, though. Whether it's a decorator-perfect habitation for $80 million fronting on packed Fowler Beach in Southampton or the more rarefied perch of Ron Baron's secret (everyone knows about it) $85 million outpost—13 oceanfront acres sliced from his far-flung estate on Further Lane in East Hampton—tramps on the beach are not allowed.

What counts most in our profound realm is perfection. No-no's include an upside-down layout, shared driveways and pools without views. What follows: price is no object.

In contrast, the top end of the market off the ocean is faring less well. Those 20-something million dollar estate offerings are as hard-boiled as 20-minute eggs. Brokers report some flutter in the $10 to $15 million range—namely a few cash buyers who can still afford to flaunt their white ties and tiaras for private domains. For the happy-go-lucky Hamptons masses, bigger may no longer be better—with $5 per gallon for heating oil and $6 per gallon gasoline to run those castellated McMansions, Land Rovers and middling Mercedes models. And not all oceanfront is created equal. Those on less prestigious dunescapes with dated and tacky houses, from Bridgehampton to Water Mill, that seemed so cute in the 70s and 80s, are less appealing to prospects today. At $12 to $20 million, some of us think purchasing passage to purgatory might be a wiser buy.

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WHAT IS BEST?
So, which is the perfect stretch of oceanfront in the Hamptons? Further Lane, Lily Pond, West End, Gin or Meadow? It's a matter of taste and how you rate the prestige of location, view and environment. Meadow Lane has the benefit of double views of ocean and bay. As for prestige, it extends as far west as Leon Black's spread. Spitting distance to the Meadow Club still counts, whether membership is an option or not. Beyond that, many view the far reaches of Meadow Lane as Johnny-come-lately land, like pageboys on the fringe of divinity. Oh, there are a few big names there but mostly it's littered with look-at-me domiciles too big to be better.

When the great hurricane comes, Further Lane will survive. Those wild, wide, deep dunes will stall whatever force wells up from the Atlantic. In the meantime beach access for denizens of the double dunes need beach buggies, protective clothing and chastity belts against inversion.

Gin Lane in Southampton is a contender for the best in oceanfront: Pristine, utterly elegant and looking like old money in modern day duds. But be warned—those single dunes are as stable as Carol Petrie sprinting in spike heels.

West End Road in East Hampton has some formidable houses—but the beach has been compromised over the years, battered by the vicissitudes of jetties that have helped some homeowners and hurt others. The dunes have now become so steep that some residents need rope ladders to descend to the beach.

There are some fine properties along West End. To wit: the Wettenhall house in all its 1920s Georgian elegance is a model of beachfront glamour; Peter Morton's house, looking more like a castle on the moors inside and out, is on a small piece of property but with incredible position. Kathy Raynor's indomitable ocean-to- pond 15-acre compound, a study in seaside gardens, has been compromised by the ravages of dune erosion. The Towbin house is the only residence for sale on this road. Now in its second year, the price has it's been reduced to $37,500,000 from $40 million. For this observer, that's hardly enough of a markdown to offset some very serious negatives. Were a purchaser inclined to replace the existing house, what's left is a 2.2 acre lot that sinks in the middle, which might make for second-rate first floor views.

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For my money, the one and only is Lily Pond Lane. In my book, it's the best. The stretch between Main and Georgica Beaches has long been fortified by massive revetments erected when zoning laws were nearly nonexistent. It has withstood much of Mother Nature's wily forces. Though nearby Georgica beach is affected by withdrawals in the winter and spring surfs, it always seems to emerge bigger and wider than ever.

What's more, most of the houses that line the strand are architecturally significant—relics extant in the grand shingled summer-colony beach cottage manor that define much of the Northeastern Seaboard from Eastern Long Island up to Maine.

Another plus is these properties front directly on the ocean. There are no interminable dunes to traverse to get to the high water mark. Also, most have irreplaceable building envelopes because they're grandfathered to be south of the so-called erosion line, an untouchable if not invisible barrier devised by the Army Corps of Engineers who flew over the East End to map out what amounts to an arbitrary Maginot demarcation.

Look at the roster. On and off the ocean residents of Lily Pond Lane are a formidable lot: billionaires, industrialists, an ambassador and CEOs including Starbucks founder Howard Schultz, Mort Zuckerman, the Ronald Perelman family, Carl Icahn and the Olin family oligarchy, among others. In the last decade there have only been two oceanfront sales on the street. Its denizens are a stable of solidity.

Many homeowners receive cold calls from brokers hoping to tempt with an outrageous price tag to sell. No one, though, seems likely to be hunting for extra cash in this neighborhood. But the old saying, "One million wants two" is always a possibility at the right price.

There isn't a bad house along the stretch. In choosing which to include out of the 21 Lily Pond Lane oceanfront residences considered top drawer trophies, with a combined value of over $1 billion, the variables include quality and size of house, size of property (none less than two acres), oceanfront views, seaside pools and other factors. None of these properties are for sale, at least not now at any price. And keep in mind, my value estimates are subjective.

THE "SCOOP" VALUE REPORT
Icahn. The house, which was purchased by Icahn in the fall of 1989, was a 1910 manor house in high disrepair. Because of a quick renovation to ready it for the summer, it was not made into a masterpiece when it should have been. But the house is huge, the rooms are outfitted luxuriously and the views from the oceanfront lawn are phenomenal, spanning over 350 feet. Icahn also bought the two adjoining parcels to the north, giving him a total of seven acres, which boast vast lawns and gardens, a pool, caretaker's cottage, two tennis courts and a 5,000- square-foot guest house. My valuation: $135,000,000.

Perelman: By standards the Perelman house bucks the trend—a 1960s tour-de-force modern abode built into the dunes with a seaside pool and nearly eight acres of lawn. Records show that it's still owned by Perelman but his daughter with the late Claudia Cohen occupies the house and has no plans to move. It's a remarkable setting, virtually untouched and original and incredibly sited on the dune. My valuation: $125,000,000.

Lewis. This is a story of love and devotion. Loida Lewis purchased her 10-acre 600-foot-wide property in loving memory of her husband Reginald, who died so young from brain cancer but he had wanted this house more than anything. It was purchased from the feisty Maggie Minskoff who sold it to Lewis for about $12 million. Minskoff had bigger and better offers over the years—$13 million from David Geffen, which she turned down the year before the sale and $17 million from Icahn when it was briefly on the market in the late eighties. Timing is everything. What's so incredible about this property is how the pool is built only five feet above the sand, 20 feet away from the beach. You can lounge poolside as though you were on the beach but passersby can't see you. The 10 acres consisted of two lots, four of which were sold off for $8 million (see Sanders) in the mid-1990s. The house, circa 1900, is a rambling, very plain shingled house of the period. Lewis recently renovated it. The views and setting are monumental. My valuation: $120,000,000.

Sanders. Next door to Lewis, the appeal here is not so much the quality of the oceanfront (it's very good) but the caliber of the house. It's a vast 25,000-square-foot French limestone villa that gives Belle Epoch new meaning. Formal gardens on four acres, pool and tennis pavilions and rippling views with 240 feet frontage. My valuation: $120,000,000.

Cunniffe. Bought at auction on the steps of Town Hall for $3,500,000 in 1996 from defrocked litigator Harvey Myerson, known in his day as Agent Orange, it was never a great house; in fact it was an overblown ranch house that Myerson white-washed after buying it from Donald Marron and previously owned by a minor Dole pineapple heir for under one million dollars in the eighties. The old homestead was quickly razed and a mini Versailles put in its place, a rather striking limestone villa that enjoys the highest perch along the dunes, some 40 feet above the surf. The views are remarkable. The property includes a separate 1.7 acre lot to the north. The pool is perched seaside with an imposing oceanfront pool house. The only negative is it shares a driveway with another neighbor. Still, on 3.7 acres in total, this is a formidable hideaway. My valuation: $105,000,000.

Bruckman. Next door to Cunniffe, this vintage stone and shingled beach house in the Tudor style is on six acres in three lots. There's a three-bedroom guest house, vast gardens, pond and manor house that sits regally on the dune. Owner Polly Bruckman is one of the few Maidstone Club members still to reside in old-fashioned summer colony fashion on Lily Pond Lane. This could be a parvenu's delight in other hands. For now, it retains its old world, low key opulence. My valuation: $105,000,000.

Olin/Williams/deKertanguy family. The stability of old mid-western money has kept this house in family hands for decades. Built in 1926 as homage to a Spanish style farmhouse, it sits squarely on the road, atop an emerald green dune and nestled into the oceanside discreetly. It's on four acres and truly a one-of-a-kind house. Don't expect this to change hands anytime soon. Currently, family members are said to be willing to subdivide their farmland across the Lily Pond into salable lots. For years, most everyone assumed it was a land trust in perpetuity. Neighbors like Steve Roth, Steven Spielberg and Nora Ephron may not be happy about this. Nonetheless, this is one of the most distinctive oceanfront residences in East Hampton. My valuation: $105,000,000.

Ford. In residence since the mid-1950s, William Clay Ford, grandson of Henry Ford, owns what is the most discreet of all the oceanfront trophies. On three acres and positioned far forward on the dune, this white shingled house looks like it belongs more in Northeast Harbor, Maine, than in Cash Hamptons. To the east of Icahn and off Nichol's Lane, separating the two properties is a quarter-acre spit of oceanfront owned by the Russell Family who bought to the north of Ford what was once Bob Dylan's house. Beyond my purviews, I've not been in the house but I hear it's lovely and given the benfit of the doubt it's worth a lot. My valuation: $105,000,000.

Liebman. Dental clinic mogul and art collector Irving Liebman has another great spot on the beach with over three acres and a magnificent spread along the dunes. Property includes a pool on the ocean, guest house and a very formidable dwelling in meticulous condition. My valuation: $105,000,000.

Zuckerman. You can't see the house from the road but it's fairly prominent on the dune. It's an all-vintage seaside shingled cottage, large, roomy and comfortable. The only negative here is a very cumbersome driveway layout. You enter on Drew Lane and squeeze through a right of way with adjoining properties. A challenging driveway is bad news. Still, it's a grand house with wonderful views and presence. My valuation: $95,000,000.

Schultz. Originally owned by Robert Steinberg, brother of Saul Steinberg, this property sold, after much wrangling, to Howard Schultz of Starbucks fame for about $9 million. It was a big sale at the time and Schultz had the backing of his then 3 million shares of Starbucks to help fund his purchase. If only Brother Bobby had held on he'd have had a sizable asset today. It was designed by Charles Gwathmey, and it's a stunner of modern architecture. The oceanfront lawn is pristine and houses a pool and gardens; the caretaker's house and tennis court complete the four-acre spread. If you like modern, this is a significant house. My valuation: $95,000,000.

Chaus. Purchased in the early '90s by the widow of garment center bigwig Bernard Chaus for $5.2 million, it's the most casual of all the houses on this beach but was wonderfully renovated and decorated by architect Peter Marino. The pool, set on the dune overlooking the ocean, is slightly cramped but still a stunning spot. The house is very comfortable and in excellent condition. There's a well- placed tennis court and a large two-bedroom guest house. My valuation: $75,000,000.

What does this all amount to? One-hundred-million-dollars-plus to own the best of the ocean? It worked for Donald Trump in Palm Beach, who sold his seaside regurgitation for $100,000,000 to a Russian buyer. And billionaire investor Ron Baron was quoted recently on CNBC that pessimism has reached an all time low and now is the time to buy assets when no one else wants them. Sounds like good advice to me. --S.D.

August Gaining Gusto
The salad days of June and July having been filled with sand and surf, soirees and siestas, a recipe that historically lures renters into investing in their own piece of Hamptons bliss as summer comes to a close. "August is a big month in terms of everyone being here; it's probably the number one time period in terms of the real estate activity," says Devlin McNiff co-owner Stuart Epstein. "You're not dealing with rentals anymore because they're already in, so what you're looking at are people buying into the future."

Some agents aren't sure they'll see the kind of action they're used to during this storied month because, while the weather has been hypnotic and the canapes plentiful, the global and domestic economic climates remain uncertain. "That's the big question mark," admits Epstein, adding that what's moving is "the same thing it's always been, just the velocity is reduced. The same things are popular-anything on the water, the Village, or anything with something special going on.

Does the end of summer mean the end of a sluggish market? "I think people are sort of finished waiting for the bottom and they're looking for value," suggests Mark Roter of Brown Harris Stevens.

"Personally I have been getting busier. It hasn't translated into dollars yet but it is promising," confers Devlin's Roseanne Lebwith. "But there are so many owners out here who are not in a position to have to sell, so they are sticking to their prices and waiting it out. They're a little bit negotiable but not a lot."

Those homes will stay on the market, she says, because "things move when the prices are what the public will pay. The emotional falling in love with a house and buying it because they love it, that really doesn't exist anymore."—A.D.

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