The former Grassmere Inn in Westhampton Beach would become a luxury hotel under an $11.6 million proposal from a local developer, officials said.
Melville-based WHBH Real Estate LLC wants to restore the Grassmere’s main building, which dates to the 1880s, but demolish an annex built in the 1960s and 1970s and an adjacent cottage.
In their place, an annex would be added to the main building, along with amenities such as an outdoor pool, fitness center, and outdoor lounge with fire pits. The new hotel would have 16 rooms, split evenly between Victorian and modern contemporary styles, said Corey Gluckstal, managing member of the development company.
He said the 9,250-square-foot hotel will be called Seven Beach Lane after its address, which is within walking distance of the village’s town center. Developers hope to open the hotel next year.
“We’re going to create a premium product in Westhampton Beach, the most accessible part of the Hamptons, and hope to attract visitors from New York and the metro area,” Gluckstal told a Suffolk meeting. County Industrial Development Agency Thursday. “Right now there is no place like this in the area.”
The agency’s board voted unanimously to grant preliminary approval for $704,385 in tax relief for the hotel. Much of the savings would come from a sales tax exemption of up to $409,675 on the purchase of building materials and furniture and $238,460 on property taxes over 10 years. The promoter originally requested 20 years of tax relief, according to its application for IDA assistance.
In exchange for the tax incentives, Gluckstal said the hotel will create 14 jobs within two years.
He also said he wanted hotel guests to frequent the bars and restaurants in Westhampton Beach so the hotel bar and restaurant would have a limited menu.
Restoration of the main Victorian building will cost $6 million as a steel skeleton must be installed to stabilize the structure, Gluckstal said, responding to a question from IDA Treasurer Sondra Cochran. He was also involved in the rehabilitation of the Fire Island Hotel and Resort at Ocean Bay Park on Fire Island.
The developer’s attorney, Daniel J. Baker, said the Westhampton Beach hotel “cannot move forward without [IDA] profits” due to inflation, higher interest rates and a possible recession.
IDA Executive Director Anthony J. Catapano said, “The Seven Beach Lane Hotel project is not just focused on adding much-needed hospitality space, but on creating a new tourist destination in one of the most desirable parts of the Hamptons due to its ease. of access and world class beaches.”
He noted that in 2020, IDA supported what is now the Hampton Inn & Suites in Huntington Village, which includes the former Huntington City Hall as its lobby and meeting rooms. The 81-room hotel opened in May and benefits from 15-year IDA property tax savings.