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Sag Harbor Faces Big Changes

As the real estate boom hits a once-sleepy Hamptons village, locals and newcomers alike are determined to protect the area’s unique atmosphere

The best thing about Sag Harbor, longtime habitués agree, is not how much the town has changed but how much it hasn’t: Main Street still has an old-fashioned pharmacy and pizza parlor, plenty of places to buy pre-faded T-shirts and nautical tchotchkes and a variety store that stocks everything from rubber balls to spools of thread.

“You feel like you’re in a New England fishing town,” says Michael Namer, the CEO of New York-based Alfa Development, who has owned a house in Sag Harbor for decades. “Development plays out very different here than elsewhere in the Hamptons.”

But even if Ralph Lauren has yet to leave his stamp on Sag, it’s abundantly clear that it is no longer the unassuming little town it once was. Nowadays, BMWs vie for parking on Main Street, Donna Karan has an outpost of her Urban Zen shop on Bay Street (her daughter runs the celebrated Tutto Il Giorno restaurant next door), and one of the penthouses at Watchcase—the former Bulova watch factory that developers Cape Advisors are transforming into a super-luxe condo, replete with an on-site spa and year-round saltwater pool—was recently listed for $10.2 million. (Move-ins are expected to begin around the end of this year, though the development was already sufficiently polished to host a designer showcase in June.) 

Sag Harbor

The American Hotel in downtown Sag Harbor

 But while Watchcase’s multi-million-dollar condos are indicative of the “new” Sag, the developer has, in true local fashion, been eager to keep the building looking like the old Sag, both inside and out. Not only did Cape Advisors hire architectural preservationist powerhouse Beyer Blinder Belle for the project, but on a recent tour, Cape Advisors executive David Kronman pointed out details like the ceiling’s original exposed yellow pine beams, which were restored with ground-up walnut shells rather than through the more common, but much harsher, practice of sandblasting. 

Of the 43 units released last summer, 35 were in contract as of this June, the month that the 65-unit development’s remaining condos (with the exception of the “bungalows”) were listed. Both New Yorkers eager for a no-headache second home and locals looking to downsize have driven sales, according to local brokers.

But the fact that the town feels like an open secret has, if anything, made locals more protective. “Change is not necessarily good in Sag Harbor,” cautions Sotheby’s Robert Florio. “It was a working class town, famous for being the un-Hamptons. The people who live in Sag Harbor don’t want to lose that.” The real estate market, he notes, “may be the one signal point where you see change.”

Indeed, several big sales have already happened this year. In February, a 12,000-square-foot Tudor mansion on six acres in the waterfront enclave of North Haven sold for $31.7 million. The seller, Richard Demato, was downsizing to the “Howell House,” a 9,000-square-foot mansion in the village, where he owns an art gallery. That home, which went for $9.75 million, was the year’s second most expensive (so far).  Even comparatively modest properties in the village now fetch between $1.5 million and $9 million, according to Douglas Elliman broker Gioia DiPaolo. “They’re sweet historic houses,” she says. “They don’t have swimming pools, but they’re charming, charming, charming.” (She added, however, that some newcomers are working around the inherent size limitations by buying up several properties and turning them into compounds.)

In response to the influx of moneyed new residents, many New York-based retailers and restaurateurs—among them perfumer Bond No. 9, Italian bistro Doppio and Harlow and the first outpost of Nobu co-founder Richie Notar’s Manhattan eatery—are also flocking to town. Or, at least, they’re trying to: Locals have their own ways of saving Sag, Sotheby’s broker Michael Daly says, relating the story of a major retailer who tried to rent a spot in the village last year, only to be rebuffed by an owner who wanted a local business.

“Unlike East Hampton, which has become a mall, Sag Harbor still has a wonderful, colorful, fabulous scene,” says Keith Green, the Halstead broker who’s selling Harbor’s Edge, a new 15-unit waterfront condo development where prices range from $2.5 million to $6.5 million. And despite the bigger yachts in the harbor and the influx of traffic and upscale shops, DiPaolo says that the town has a way of showing newcomers how to behave. 

“I’ve definitely seen some tantrums,” she admits. “People who are new in town don’t always know they’re supposed to stop for pedestrians in crosswalks, but they quickly realize that they shouldn’t be showing certain digits when people try to cross the street.” Overall, the growth hasn’t led to a wholesale alteration of the atmosphere. “It really seems that people want to come here because they enjoy blending in with the local scene,” DiPaolo explains, “not because they want to change it.”

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