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Sea Cliff completes buy of NYAW waterfront property

Sea Cliff Mayor Elena Villafane says the village

Sea Cliff Mayor Elena Villafane says the village will reach out to residents to determine the best use of the acquired property. Credit: Shelby Knowles

The Village of Sea Cliff said it finalized the purchase of waterfront property stemming from a lawsuit settlement with New York American Water.

The 2.5-acre parcel sits directly on Hempstead Harbor at 325 Prospect Ave. and contains two utility pump house buildings formerly owned by the water utility. The village sued New York American Water in 2017 amid claims that customers' bills had been inflated by "accounting inaccuracies" tied to its state-approved rate hike in 2016, the village said.

As part of its settlement with the village last week, New York American Water agreed to sell the property at a $1 million discount, as well as to reimburse the village's legal fees, according to village administrator Bruce Kennedy. In the end, the village said it acquired the property for a net price of $540,000.

The deal also includes a $1.6 million credit on future water bills for North Shore customers to be enacted within 30 days of the June 30 land-deal closing, Kennedy said.

In a statement, Sea Cliff Mayor Elena Villafane said the village will conduct outreach to local citizens to determine the "best public use or uses of the property" with public meetings in the fall. The meetings will examine how best to cover the cost of potential renovation of on-site buildings in a way that doesn't "unduly impact the taxpayers."

The village mayor and trustees have said a "significant portion" of the property will be dedicated to the arts, according to their statement.

Kennedy said the larger of the two buildings is "incredibly beautiful" and could ultimately be used as a performing arts center. Both buildings, however, "need work."

Around 25% of the property is fully forested, and will likely remain that way, said Kennedy, who is credited with coming up with the idea to purchase the building as part of settlement talks. New York American Water is in the process of being sold to Liberty Utilities of Canada.

The Village of Sea Cliff has conducted a study and found a potential public takeover of New York American Water's North Shore territory is feasible. More recently, the state Legislature approved a bill paving the way for a North Shore Water District to facilitate the deal. The bill awaits Gov. Andrew M. Cuomo's signature. Kennedy said he's hopeful Cuomo will sign it.

A separate bill that would have exempted New York American Water from a special franchise tax that makes up a large portion of customer bills did not pass the Assembly, and customer bills increased upward of 30% last month.

New York American Water president Lynda DiMenna, in a statement, thanked the Public Service Commission for "approving our proposal to facilitate the sale of this property for the benefit of the Sea Cliff community and provide the net proceeds of the sale, approximately $1.3 million, to our North Shore customers."

She noted the sale will "also preserve this historic property for the Sea Cliff Community," and said the company will work with the state to "identify the appropriate way to deliver 100% of the net proceeds of the sale back to customers."

As for the sale to Liberty, which she said is in "the best interest of our customers," DiMenna said, "The time has come for this transaction to move forward."

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