Closed Victorian inn to become luxury hotel in Westhampton Beach 

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 constructed 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 area with fire pits. The new hotel would have 16 guest rooms, split equally between the 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 downtown. The developers hope to open the hotel next year.

“We’re going to create a high-end product right in Westhampton Beach, the most accessible part of the Hamptons, and the expectation is we will attract visitors from New York City and the metro area,” Gluckstal told a meeting of the Suffolk County Industrial Development Agency on 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 breaks for the hotel. Much of the savings would come from a sales-tax exemption of up to $409,675 on the purchase of construction materials and furnishings and $238,460 off property taxes over 10 years. The developer had initially sought a 20-year tax break, according to its application for IDA aid.

In return for the tax incentives, Gluckstal said the hotel will create 14 jobs within two years.

He also said he wants hotel guests to patronize Westhampton Beach’s bars and restaurants so the hotel’s bar and restaurant will have a limited menu.

Restoration of the Victorian main building will cost $6 million because a steel skeleton must be installed to stabilize the structure, Gluckstal said, responding to a question from IDA treasurer Sondra Cochran. He also was involved in the rehabilitation of the Fire Island Hotel and Resort in Ocean Bay Park on Fire Island.

The developer’s attorney, Daniel J. Baker, said the Westhampton Beach hotel “cannot move forward without [IDA] benefits” because of inflation, higher interest rates and a possible recession.

IDA executive director Anthony J. Catapano said, “the Seven Beach Lane hotel project is not simply focused on adding much-needed hospitality space, but creating a new tourist destination in one of the most sought-after portions of the Hamptons due to its ease of access and world-class beaches.”

He noted that the IDA in 2020 supported what is now the Hampton Inn & Suites in Huntington Village, which incorporates the Old Huntington Town Hall as its lobby and meeting rooms. The 81-room hotel opened in May and is receiving IDA property-tax savings over 15 years.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.