NY Rising's second-round auction of 155 Long Island storm-damaged properties in Hauppauge Tuesday drew winning bids totaling $24 million, selling out quickly in lively bidding from a crowd of nearly 500 contractors, investors and would-be homeowners.
The high bid of $510,000, for a West Islip canalside property, came from Brooklyn real estate investor and dental lab owner Johnny Wong, who said he might use it as a "vacation home . . . I like the spot, I like the area."
The high bid for a Nassau property was $500,000 for a waterfront Baldwin Harbor house that Dr. Mohammad Kahn of Hicksville said he would elevate and use as a second home.
Numerous other dwellings were purchased by contractors and investors who said they intended to repair and elevate, or demolish and rebuild FEMA-compliant homes for resale.
The properties, 81 in Nassau and 74 in Suffolk, were bought by the state for $64 million under its acquisition program for homes substantially damaged by superstorm Sandy, Hurricane Irene or Tropical Storm Lee.
The money generated from the auctions will go for housing programs under a state disaster recovery action plan, including allocations for multifamily affordable housing and public housing assistance relief.
While auction prices are lower than the homes' acquisition costs, the state avoids paying substantial amounts to the original homeowners for elevations and repairs, officials said.
"It's the same cost to us," said Jon Kaiman, special adviser to Gov. Andrew M. Cuomo on storm recovery. "There were people who couldn't get their hands around restoring their homes on their own, so this program exits."
Winning bids ranged from a high of $510,000 to a low of $67,500, and closings are to take place within 45 days. Buyers have three years -- four if a variance is required -- to make the properties compliant with FEMA regulations under local building codes, and obtain certificates of occupancy.
Otherwise, title reverts to the state, which can grant discretionary extensions. The program is run in coordination with Cuomo's Office of Storm Recovery and the NY Rising Housing Recovery Program. Lee Moser of Capstone Remodeling, of Nesconset, paid $175,000 for a West Islip property with a pre-storm value of $650,000. He intends to tear it down and rebuild an elevated house for sale.
"It's right where I valued it," he said. "The deals in Suffolk were good . . . the way I assessed them as a contractor is I need to make $100,000 on a house -- I need to make money."
William Mitchell, of Mitchell Contracting in Babylon, said he bought two Babylon properties in a May auction and just purchased his third. "One is up in the air and the other two will be up in two months. I can't wait for the next auction."
As a general contractor, he said, he has a "Rolodex" full of sub-contractors and is familiar with doing elevations. "It's a piece of cake for me. This is my 16th lift."
In Nassau, the auction included 15 properties in Island Park, 14 in Freeport, 11 in Long Beach and Massapequa, 10 in East Rockaway, and 20 additional properties in six more towns and villages. In Suffolk, 38 Lindenhurst properties were auctioned and one more sold to the Village for open space. Fifteen Babylon properties and 19 in nine more towns and villages were auctioned as well.
Developer Gary Pasquaretto, owner of Northeastern Building and Development, bought a property in East Rockaway, adding it to the three in East Rockaway and the one Baldwin property he bought at the first auction in May.
"It was definitely a bigger crowd" this time, he said, "and the prices stayed higher longer." He paid about $60,000 for a property with a pre-storm value of $260,000, he said. Among those who saw the auction as a way to buy a home was Dennis Myers. He said he'll trade his 700-square-foot Seaford home for a high ranch he bought for $210,000 that he'll fix.
"It's an upgrade," he said, noting he hopes to start a family "now that we have a bigger house."
Keith King of Oceanside, bought an Island Park property for $225,000 because "I needed something to keep my mind going" since retiring from his job at UPS, he said with a laugh. He has experience building houses, he said, and might sell his own home and move in here: "Let's see how this turns out," he said.
Carpenter John O'Sullivan of Queens said he bought a gutted Long Beach bungalow for $115,000 as a weekend home and possible future residence that he'd tear down and replace with a "beautiful house. Mrs. O'Sullivan wouldn't have it any other way," he laughed.
So far in total NY Rising has paid nearly $121.2 million to acquire 305 properties on Long Island at pre-storm value prices of $113,000 to $875,000, with a median payout of $397,000, according to the agency.