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East Hampton halts property relocation in dispute over ownership of trail land

This Stop Work Order was issued to Michael

This Stop Work Order was issued to Michael Novogratz who owns the property at 58 Cross Highway East in Amagansett, New York. Credit: Doug Kuntz/Doug Kuntz

East Hampton Town has issued a stop-work order on an Amagansett property owned by a former hedge fund billionaire who town officials said erroneously laid claim to a popular town-owned hiking path.

At issue is ownership of a sliver of the 125-mile Paumanok Path hiking trail that runs through the property and how that affects the parcel’s building envelope. Attorneys representing property owner Michael Novogratz, CEO of cryptocurrency firm Galaxy Investment Partners, had argued the land should be folded into the property in exchange for keeping the trail open to hikers. East Hampton officials believe the town has sole interest in the land.

The trail was laid out as a town road in 1914 but never paved, and has been used by hikers for decades.

“From our perspective, we believe the road is a town road,” town Attorney John Jilnicki said Tuesday.

A building permit issued Nov. 6 would have allowed Novogratz to relocate late architect Francis Fleetwood’s former home to Novogratz’s 4.8-acre Cross Highway East parcel. The town building department issued a stop-work order on Nov. 25 after discovering the permit was based on an outdated Suffolk County tax map displaying the trail as part of Novogratz’s property.

The project does not meet setback guidelines when the trail is considered town property, Jilnicki said.

“We believe the title issue will ultimately be resolved in our favor and our client will be able to site the house the way he wants, which has always been his objective,” Novogratz’s attorney, Stephen Latham, said in an email. “The portion of the Paumanok Trail which runs through a portion of the property will not be disturbed.”

Town staffers removed several “No Trespassing” signs on Tuesday from the trail entrance that were posted by Novogratz, although several more on his property were still visible Tuesday afternoon.

In 2018, Novogratz asked the town to abandon the trailway and in exchange, he would have offered an easement that allows hikers, cyclists, skiers and horseback riders to continue using the trail during daylight hours. New York State’s real property law states that the owner of a so-called "paper" road may request that it be abandoned if after 20 years the road was never opened, was never made a public highway, is not used by the public and is not necessary for use of anyone with interest in the subdivision.

Town board critic and Springs resident David Buda, who opposed the deal, said the abandonment procedure should not apply to the trail, which he said was accepted as a public highway and has been used by the public for years. The deal was never approved by the town.

Novogratz’s representatives then hired a title company to research the issue and determined that Novogratz owned the lane. Corrected deeds were filed with the county clerk’s office and the Suffolk County tax map was updated in March to show Novogratz’s ownership of the parcel, according to Latham.

But the tax map was again revised in October after Buda presented evidence to the county that Novogratz’s documents were what he called “incomplete and legally ineffective."

“It’s really a matter of him grabbing public property and trying to eradicate the public rights,” Buda said. “It boils down to big money versus public interest.”

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