GBCC proposes purchasing of Shelter Island House for staff

Gardiner’s Bay Country Club is on target to solve its staff housing problem with a $5.5 million purchase of Shelter Island House on Stearns Point Road. Members of the Country Club will be voting at a meeting on the morning of Saturday, Oct. 25, on the proposed purchase calling for $1.5 million to be paid at closing with a promissory note to pay the balance of the price over a 10-year period at 5.5% interest. That will follow a “town hall meeting” this Saturday to address members’ questions.

In a letter to members about the proposed purchase, plans call for spending $500,000 for the closing, renovations and refurnishings.

The building has operated as an inn and restaurant since the 19th century and for the past few years hosted Marie Eiffel’s Chez Marie restaurant on a seasonal basis.

The purchase is to be structured through a wholly owned subsidiary of the Club with the promissory note to be issued by that unnamed subsidiary with the Club guaranteeing the obligation of the note.

The letter signed by Club president Louis Bevilacqua said the purchase i

contingent on several conditions:

• Approval of the membership for the transaction

• Satisfactory engineering and environmental reviews

• Ability to obtain necessary permits from the Town and Suffolk Count Department of Health Services, including a change of use for the property “The agreement provides for a 60-day due diligence period” with an anticipated closing by Dec. 31, according to the letter. Club officials have been housing staff in six or seven rental houses for seasonal employees, including house staff, golf pros and grounds keepers. Costs have escalated through the years to the point where costs are more than $400,000. Staff paid about $90,000 of the cost and will do the same at the new facility if the deal goes through, Mr. Bevilacqua said.

“Double digit rent increases have become the norm and local real estate professionals predict the trend will continue,” he said. More housing is being purchased and competition for rentals is coming from other businesses on the Island that need housing for their staffs.

“We risk a crisis where suitable housing becomes unavailable at any price,” Mr. Bevilacqua said.

The purchase is designed to avoid current members having to be assessed for the purchase. The membership cap will increase from 350 to 360 and their initiation fees will increase to $200,000, generating $2 million to pay the down payment and closing and renovation costs.

The 10 new members’operating and capital dues during the next 10 years is expected to generate another $2 million. That money and elimination of rental fees for housing should pretty much cover the purchase cost.

As for ongoing operating costs — taxes, insurance and utilities — the estimated savings in not needing rentals will cover those with money to spare.

Plans also call for rolling back the membership from 360 to 350 beginning in six years and at the rate of two members a year.

“We believe this temporary increase is a small burden compared to the long-term benefits,” said Mr. Bevilacqua’s letter. The increase in membership with potential pressure on the course would be accommodated by suspending the summer guest program.

Other housing possibilities were examined by the Board and rejected:

• Continuing to lease housing would exceed the cost of paying off the purchase

• Purchasing multiple houses would cost an estimated $9.1 million, far more than the Shelter Island House purchase

• Building staff housing on GBCC‘s 19-acre property “would be fraught with permitting and zoning issues as well as significant community and member opposition” and cost an estimated $7.5 million

• Purchasing a new commercial property and constructing a new facility would cost at least $10 million and the permitting process would be “long, complex and uncertain.”