How to Depreciate Sea Side Real Estate

Jun 18, 2007

Whyte Out-For the Best?

Summer has arrived, which means that a large contingent of upscale gay New Yorkers, along with a tiny, but growing, minority of hip and happening straights, will be making their annual pilgrimage to that enchanted island paradise known as the Pines. No cars are allowed, encouraging and facilitating major drinking and revelry. For decades, more than 80% of the commercial space was owned by a single person: John Whtye. Mr. Whyte was a very cantankerous individual, resistant to change and new ideas. But that might not have been a bad thing.

John Whyte, who died several years ago, presided over the most glamorous and storied era of the Pines. Calvin Klein and Bianca Jagger cavorting on the beach, seaplanes buzzing overhead, and smoking cutting-edge disco at the most underground of clubs, the Pavilion. Today we have Carson Kressley, Starbucks, and Citarella (coming soon!). We also have new owners that have installed a Gap Brand mentality to the commercial space.

The once mighty Pavilion was literally razed to the ground, and has been reconstructed as part Citarella and part airport hangar. Even before its dismantling, the Pavilion's reputation was rapidly deteriorating through poor promotion, inexperienced DJs, and general indifference. You once felt you were inches from the water at the once fun and festive early evening (8-10pm) High Tea fete. Now you feel like you are in a badly lit warehouse. The main Pavilion area is scheduled to reopen at some point (summer 2009, perhaps), but will anybody care?

All told, the Pines has gained frozen lattes and lost significant cachet. From a real estate investor perspective, you will probably see far more pricing appreciation in the Hamptons over the next several years. Don't get me wrong: the Pines still remains the most special place on earth for me and my friends. And no amount of "creative" tinkering and branding by the new owners will change that.

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