Southampton settles with The Hills developer, will sell East Quogue strip for $10 million

Southampton Town has agreed to sell a narrow strip of land running through the middle of a luxury golf course and residential development in East Quogue for $10 million after officials unexpectedly discovered the town — not the developer — owned the property.

The deal to sell the land is part of a settlement, approved by the town board Tuesday, to resolve three lawsuits between the town and affiliates of Arizona-based Discovery Land Co., the resort developer behind The Hills. That luxury residential community and golf course is located on roughly 600 acres in the pine barrens.

The settlement also secures additional land and cash for the town while allowing the golf course to expand beyond residents-only membership.

The property at the center of the dispute is an approximately 50-foot wide, 1,060-foot long strip that runs through the development, where Discovery had built portions of its 18-hole golf course and cleared land for housing.

Ownership came to light last year

Town officials learned about the ownership last year while researching property records as part of their legal battle with Discovery. The land had been acquired through eminent domain in 1957 for highway purposes.

“I'm not going to lie; there were a few high fives” when it was found the town owned the property, Southampton Highway Superintendent Charlie McArdle said in an interview.

The town and highway department sued Discovery in January, alleging the company misrepresented ownership of the property.

The lawsuit sought damages and asked a court to order the removal of golf course features and other structures on that land strip. Instead of proceeding with that lawsuit and two others, the parties reached a settlement.

“I'm just happy it's coming to a resolution,” McArdle said. “The highway department is going to enjoy a big portion of that money to get new equipment and pave some roads.”

Under the settlement, Discovery will pay the town $10 million for the strip of land, transfer a mostly wooded 32.4-acre parcel along Montauk Highway and make an additional $1.5 million payment to the town.

"While this public process is ongoing, we look forward to the completion of all settlement processes," Discovery said in a statement to Newsday. "With the settlement agreement adopted by the Town Board today, Southampton residents will be able to receive meaningful community benefits, preservation of public spaces, and support for important local charitable organizations."

In a statement, Southampton Town Attorney James M. Burke said the settlement “clearly encompasses the best interest of the residents of East Quogue and the town as a whole,” adding the project will result in a “significant contribution to the tax base.”

Other details

The settlement also eliminates the possibility that the town could have faced a significant damages award stemming from a 2018 lawsuit. A 2024 court ruling found officials had improperly rejected an earlier version of The Hills. Discovery had estimated its damages at more than $100 million, though that figure was calculated before the company received approval for a scaled-back development.

The agreement also resolves a long-running dispute over Spinney Road, an unpaved road that crosses the property and was the subject of a 2025 lawsuit. The town will give up ownership of part of the road, but public access will remain. Discovery must preserve access for pedestrians and bicyclists traveling through the property to nearby wooded trails, build a small public parking area and make trail improvements.

As part of the settlement, the town must approve a zoning change allowing The Hills’ golf course to operate independently of the development’s 118 residential units.

Previously approved as an accessory use, the golf course had been limited to homeowners within the development, which includes a mix of condominiums and standalone homes. The change will allow the club to have up to 295 members, regardless of whether they are owners.

The course also agreed to host at least four free charity events each year benefiting the East Quogue school district, the East Quogue Fire Department and two local nonprofit organizations.

The Hills project has been a source of controversy for years, including unsuccessful lawsuits from environmentalists and residents. Discovery first sued the town in 2018 after officials rejected its original proposal. A scaled-back version was approved in 2022; the golf course has been built, but homes there are still under construction.