Dan's Papers - January 30, 2009

It seems like almost a lifetime ago that billionaire Ron Baron purchased the De Menil property on Further Lane in East Hampton. It was, in fact, just 18 months ago. But this was a different world then.

At that time, Baron's purchase, at $103 million, was not only the most expensive residential real estate transaction in the Hamptons, it was also the highest transaction of such property in America.

I think the property wasn't even on the market when it sold. But three different buyers approached the De Menils about purchasing this 70-acre oceanfront parcel two years ago, and over the next three months engaged in a bidding war with one another about it. It was later learned that it began about $70 million and then it went up and up. When it got into nine figures, Adelaide De Menil and her husband Ted Carpenter figured, well, why not? They'd lived there for 40 years. Maybe it would be good to move on. And though they were wealthy in their own right, certainly the price was a record breaker.

And so it was that Baron finally won the day. In November of 2007, the De Menils moved out. And Baron came in with bulldozers.

A great deal of water has gone under the dam since then, and hardly any of it is good for Baron. Late last summer, with the real estate market flat, the economy began to teeter and fall. In October, Baron was listed as having a net worth of $1.4 billion by Forbes Magazine in its annual survey of the 400 richest men in America. He was ranked #264. By the end of the year, with stocks falling on markets everywhere, the prices for stock in Baron's companies were less than half of what they were in September, when Forbes likely tallied up everything to see who would make their 400. Surely, he was no longer a billionaire.

Now things have gotten even worse, at least here in East Hampton. Baron's plan, back when he bought this property, was to combine it with the 30-acre property where he has had his personal oceanfront estate, just to the west of the De Menil property, for many years. Combining them, he would then own 100 acres of the most expensive land right on the ocean, land that just 50 years before had been a potato field.

Baron approached the Town with a plan last summer, when times were still good. He would take the two parcels and make nine estates out of them, each with about eight acres of land, including numerous nature preserves. Also, a valuable double dune section of the property would be donated to the Nature Conservancy. The Town said they would consider it.

Then he did something he might live to regret. In October, he received a letter from East Hampton Town's natural resources director, Larry Penny, which said that whatever Baron did, he should be careful not to include any of the historic double dunes that run parallel to the ocean inland about 200 yards along the entire southern boundary of his property. These dunes are protected and cannot be touched.

Penny wrote that letter not because of anything specific at that time, but because he knew that in the planning department of the Town, there were now big doings under consideration for the property, and he wanted Baron to be fully apprised about those double dunes.

Among other things, they present a formidable barrier against flooding, not only of Baron's property, but also of all the properties there along Further Lane. That they were protected also meant that on this part of Baron's property, people such as hikers or birdwatchers or fishermen could walk on foot across the land, at least onto the double dunes on the ocean side. The beach and the dunes facing seaward behind it are open to all residents of East Hampton.

By late October, pilots flying over the property noticed that a concrete wall had been built across the entire oceanfront double dune of the Baron property. Baron had done exactly what he had been told not to do.

I don't know whether the attitude was that they would do that now and then pay a fine later or what. They did not ask for a building permit. They made no move to tell the Town about it.

The wall is reinforced concrete, 845 feet long and six feet high. It is clearly designed to keep people from coming on the property, and the fact that bulldozers flattened the dunes on both the ocean and land side of it, thus tearing up all the old beach vegetation there, made it a full environmental catastrophe.

Although this seems to be a no-brainer about what to do, no ordinance violations were filed against Baron for nearly two months. What was going on nobody knows. Meetings were held, demands were made that the wall be torn out, attorneys for Baron said that he had as much respect for the environment as anybody else. And they also said he was within his rights to build this wall.

Were they just expecting a small slap on the wrist fine with the wall staying a fait accompli and then let bygones be bygones? If they did, they underestimated the Town, and they also forgot that the Town had a very big card to play in all this - the application asking that the Town approve Baron's nine-home, $100 million subdivision.

It seems possible that Baron was misled in all this by his relationship with East Hampton Village, a separate legal entity that owns the property just to the west, where Baron has his mansion. Years before, according to Penny, Baron had flattened a part of the double dune on that property. It was a small amount of double dune. And the Village, although they knew about it, did not act to prevent it or serve Baron a summons after he did it. They just let it go.

Last week, the East Hampton Town, which is known for upholding its laws at all costs, served Baron with eight separate zoning violations pertaining to the retaining wall. He built it without a permit, without a natural resources special permit, without a certificate of occupancy, without approval from the Architecture Review Board, and in creating it he had removed a good piece of a protected natural feature, the preserved double dune along with its unique habitat.

If the wall was not removed, and the native vegetation not restored within 90 days, the Town said, no further work will be done on his subdivision application.

Town Attorney Tiffany Scarlato took it even a step further, saying, "If he doesn't fix this, the Planning Board will stop the application."

Tucker Hewes, who is a spokesman for Baron, said, "The environmental integrity of this property is a priority for the owner. The owner's representatives have been working closely with the Town to resolve these issues."