Town To Close On Capital One Building, New Justice Court Planned

SOUTHOLD, NY —After months of anticipation, the day has arrived — Southold Town is set to close on the acquisition of the Capital One building, located at the corner of Youngs Avenue and Route 25, on Wednesday, according to Town Attorney Bill Duffy.

"The building will be ours Friday," Duffy said.

According to Southold Town Supervisor Scott Russell, the final purchase price of the building is $3.1 million.

The town board voted on a resolution to put $5.5 million in place to cover the purchase and any capital improvements that need to be made, Russell said, adding that the town does not anticipate spending that amount at once or needing the full amount; 10 percent was added for possible contingencies, he said.

The board, he said, has developed a three phase capital plan. Phase I will address immediate needs such as a new roof, and generally, bringing attention to repairs and upgrades "that the building sorely needs," Russell said.

Phase II will encompass conversion of the bank space into a justice court. And, Russell added, Phase III will include long term improvements to the site, such as upgrades to the parking spaces.

"We will be developing bid specs soon to bid out any work that can't be done in house," the supervisor said.

Russell, during his state of the town address at Town Hall in March, announced that the town board would vote on a resolution to put $5.5 million in place for the new facility and to acquire the Capital One bank, where the town has rented space for its annex and a major share of town offices.

Capital One closed its Southold branch last fall and the town had until the end of 2018 to vacate its current space in the building.

The $5.5 million, Russell said, is not the purchase price alone, but instead represents what the town will need to acquire and renovate the facility; the current annex offices will stay where they are and the front portion of the building will house the new justice court, he said.

The issue of justice court safety has been a hot button topic for years in town, with at least one court officer imploring the town board for help with a situation he felt was unsafe, and could spiral out of control with potentially deadly consequences.

Former longtime Southold Judge William H. Price, Jr. said, before retiring, that there was a dire need for the town to invest in a new justice court; the facility is currently sited in a double wide trailer as it has been for years, he said. "We need a dedicated facility," he said.

Pros to the acquisition, Russell said, is that the purchases "preserves a venerable icon" in town while also adding 93 spaces of parking to municipal control. In addition, Russell said, the solution "is the least costly of all our options." The town has looked at renting and leasing, as well as building a new facility, he said. "The opportunity presented itself and when you put it all down on paper, it's more cost effective."

In addition, he said, the acquisition allows for future expansion; there is enough space to create a "two-story addition with relative ease, and get everyone back under one roof" when the time is right; the solution allows for a phased approach. A future board, as they retire debt service, can look to borrow for the addition.

The pressing need for a new justice court, Russell said, "has been a crisis for some time."

In addition, Russell said in March, it's "an excellent time to borrow." The town's credit rating was upgraded by Moody's to Aa1, its highest ever.

Cons, Russell said, are that the building is old and in need of repair and renovation. "Because of its age it will be more costly to maintain down the road," he said, adding that the $5.5 million adds a significant sum of money to the town's debt profile. "However, we work so hard to maintain our bond rating that what would be the point if we don't take advantage of it?" he asked.

One other con is that the purchase adds another substantial building to the town's inventory, Russell said. "When you add that to all of the preserves we are adding, the department of public works is stretched too thin and we will need to add staff in 2019," he said.

Russell said the town has been paying $64,000 annually to rent the space in the Capitol One building.

"It really is a sweetheart deal," he said. But, he added, the town would not be able to extend its lease past 2018.

The $5.5 million means that the town will add $315,000 in new spending in the budget, "a substantial amount to offset," and a little less than one percent of the tax rate, he said.

In past years, the town has weighed a number of options to enhance safety at justice court and installed a metal detector. Options considered for a new justice court facility have included constructing a new building, utilizing the Peconic School on Peconic Lane, and adding modular structures behind Town Hall.

Patch photo by Lisa Finn.