It could have been a scene out of “Billions,” the Showtime series about a larger-than-life hedge fund villain, Bobby Axelrod, who drew the ire of federal prosecutor Chuck Rhodes after the mogul paid $63 million for a beach house in the Hamptons.
The TV scene played out at Axelrod’s sprawling estate on what’s known as “Billionaire Lane” in Southampton Village — Long Island’s largest hamlet — which Showtime rents from private investor Michael Loeb. The financier has been known to charge $800 an hour, or $275,000 a month, for the 18,000-square-foot mansion on a nine-acre spread at 1610 Meadow Lane.
But instead of Axelrod decking a fellow hedgie for driving drunk with his kids in tow, what happened in real life was far uglier. On July 15, Loeb, 62, allegedly punched out a teenager who was attending a $500- to $5,000-a-plate fundraiser at his home, a barbeque cook-off with celebrity chefs like Jonathan Waxman serving up ribs to benefit autistic children.
Avery Arjang, 18, had been invited to the event by Loeb’s son, a childhood friend. He ended up with a broken nose, a concussion, and surgery as a result of the pounding that occurred when Loeb allegedly flew into a rage after one of the teens Arjang had brought with him got drunk, threw up, and soiled himself in Loeb’s garage.
The CEO of Loeb Enterprises was charged with misdemeanor assault and pled not guilty. But the saga is far from over. The Southampton police could upgrade the assault to a felony should the damages prove to have long-lasting, serious repercussions, says Arjang’s attorney, Michael Griffin, who estimates that damages could result in a $100,000 lawsuit against Loeb. Neither Loeb nor his attorney returned calls for comment.
It was just another Saturday afternoon in the playground of the rich, the fabulous, and the wanna-bes, where too much sun, booze, and money often come with dire consequences. “At least once or twice a season, people become unhinged,” sighs Griffin.
What is it about the Hamptons — home to gorgeous estates, pristine beaches, and quaint villages — that makes people go crazy? Is it the lack of cell service just about everywhere? Every summer stories abound of drunk revelers trashing houses, crashing cars, and getting into fights, occasionally over property lines. Each year the population of the Hamptons more than triples during the summer, to what is now about a quarter of a million people, all on a slim stretch of land less than 50 miles long. That strains everything from septic tanks (the Hamptons has no sewer lines) to nerves.
As more people find their way here, the popularity of the Hamptons and the money that comes along with it threaten to destroy the qualities that make the place so special. Residents fret about airplane noise, lack of parking, beach erosion, water quality, and the rudeness of the interlopers. Some longtime Hamptons locals believe that a tipping point has been reached. East Hampton Star editor David Rattray, whose family has owned the paper for three generations, is perhaps the most vocal.
“The region has reached a point at which growth should actually be reversed,” he wrote in an editorial earlier this summer. “The surge of summer residents is well beyond what any rational planner would consider a sustainable level, given all the constraints dictated by the landscape, lack of sewage treatment, and limited roadways and emergency services, to name but a few.”
Alas, the Hamptons scene in the summer of 2017 showed little sign of slowing down. Real estate was coming back, art was selling, Airbnb was bringing in the riffraff, and restaurants were catering to young Wall Streeters by trying (illegally) to turn themselves into nightclubs. Never mind the bacteria in the water.
The storied end of the South Fork of Long Island known as the Hamptons is a state of mind for New Yorkers. It’s the ultimate getaway from the steamy summer grit and grime of the big city, a paradise where — if you’re wealthy enough to own a ten-bedroom manse with tennis courts, a pool, and staff — you should finally be able to relax away from the frenzied life on Wall Street. You can see the stars; walk on wide, sandy beaches; and swim naked in your infinity pool. Because it’s full of New Yorkers, of course, it’s also a place to see and be seen — for everyone from young hedge fund managers looking to hook up in Montauk to bankers hoping to cut deals to politicians raising money for their next campaigns to socialites soaking the rich for worthy causes on tented lawns in Southampton.
“There’s too much money and too much ego,” says longtime Sag Harbor resident Mark Borghi, who runs an art gallery, Mark Borghi Fine Art, in Bridgehampton. “I’ve been coming out here for 30 years, and every year it gets worse. It’s exponential.” Just going to the neighborhood café to buy a cup of coffee can rile him. “People go in front of you in line because they feel they are entitled,” he grouses.
The modern fascination with the Hamptons was largely spurred by bohemian artists, particularly post–World War II abstract expressionists like Jackson Pollock, who lived in the woodsy working class hamlet of Springs, adjoining East Hampton. That’s where he made his famous drip paintings in a barn and became the greatest living American painter of the era. In a classic case of Hamptons excess, Pollock, at the age of 44, died in the summer of 1956 when he was driving drunk and his car spun out of control less than a mile from his home and hit a tree, as he and two female companions were en route to a party. Now the aging farmhouse he and Lee Krasner, his wife, bought for $5,000 in 1945 is a National Historic Landmark museum, including the barn. Visitors must wear special foam shoes to walk on its paint-splattered floors.
Fast-forward to the 21st century, and there are no bohemians of any sort to be found. The Hamptons is dotted with billionaire art collectors (hedge fund legend Steve Cohen once paid $52 million for a Pollock), pricey art galleries, a couple of museums, and an art fair — though two other fairs were shut down this year. Still, Borghi insists business has been brisk this summer at his gallery, which sells small works by the likes of abstract expressionists Willem DeKooning and Helen Frankenthaler. Borghi says one man walked in off the street and plopped down $375,000 for a painting this year, his biggest sale of the summer.
Now when clients ask him if they should come to the Hamptons, he jokes, “I tell them, ‘There’s nothing to do. Don’t waste your time.’”
One problem is that before you get to paradise, you have to endure one big traffic jam. Whether you’re driving a Honda Civic or a Mercedes SUV, you’ve got to wait. On a recent Friday night, there was a ribbon of cars as far as the eye could see on Montauk Highway, the road that traverses the Hamptons. More than 50,000 cars a day cross the highway at Southampton in July, according to the New York Department of Transportation. “The growth happened pretty quickly, and our infrastructure can’t keep up,” says Laura Tooman, president of Concerned Citizens of Montauk, an environmental group.
Driving isn’t the only way to get there, either. For just $695 one way, billionaires can travel via helicopter from midtown to either East Hampton or Southampton, a trip that takes 35 minutes. About 70 aircraft fly into the East Hampton airport daily. And for the plebeian day-trippers and weekend revelers heading out to the honky-tonk that Montauk has become, there’s always the bus — the Hampton Jitney — for $33 one way, or the slightly cheaper Long Island Rail Road, which offers a $29.25 one-way peak-hour ticket.
No wonder the überwealthy stay ensconced behind their hedges. “I never leave my house once I get here,” says one hedge fund manager.
The crush of people has occurred despite the fact that the Hamptons keeps getting more and more expensive, with more people priced out of the market and a steady exodus of locals. The previously sleepy hamlets of Montauk, once a fisherman’s port, and Sag Harbor, a former whaling village where writers have congregated for decades, have seen some of the biggest booms in recent years, according to realtors. Sotheby’s International Realty reports that during the second quarter of 2017, Sag Harbor home prices jumped an average of 21 percent, to $1.9 million.
It’s true that Hamptons real estate took a dive after the financial crisis, but prices recovered to peak around the end of 2014. Sales in second-quarter 2017 were the best in two years, according to Douglas Elliman, which reports that most of the action continues to be at the very high end. The overall average sales price in the Hamptons for that quarter was $2.5 million, with the average sales price jumping 28 percent. Sales above $10 million doubled.
With the stock market riding high this year, some also see the frothy market as a good time to sell. Goldman Sachs co-chair J. Michael Evans owns the second-most-expensive property on the market this summer. It is a multiple-home spread, with two putting greens, two swimming pools, and tennis courts on 16 acres in Southampton, with an asking price of $150 million. In mid- August another Southampton waterfront estate, once owned by the Ford family, bested that price, listing for $175 million.
One little-discussed drawback is that some coastal Hamptons estates could be underwater by 2100, according to current estimates by Climate Central, a group of scientists and journalists researching the impact of global warming.
Even though that’s a long time from now, the events that unfolded in Houston during Hurricane Harvey are a reminder that overdevelopment next to water can have devastating consequences. In addition to facing rising sea levels, houses within a mile of the ocean or other bodies of water are most at risk of polluting the water through their septic systems, especially after heavy rainstorms soak the ground, limiting the soil’s capacity to filter wastewater from the septic system before it enters the groundwater, says Tooman. “A lot of people don’t know we only have septic systems. A lot of people don’t know where theirs is located or what it is,” she says. “It can be frightening for water quality.”
Concerned Citizens of Montauk monitors water quality in the Hamptons and found excessive levels of bacteria in a number of locales this summer. Among them were several spots on Georgica Pond, a wealthy enclave in East Hampton populated by such notables as Steven Spielberg and Ronald Perelman, who owns a 57-acre estate with “prized conifers.”
Last year, Georgica Pond faced another problem: It was poisoned by pesticides leaching into it from nearby lawns. Hamptons landscape contractor Francisco Torres, who owns Evergreen Screens Landscaping in Wainscott, says it took 15 of his men six weeks to pull the toxic algae blooms out of the pond by hand last year. “It was really bad. We had to wear special gloves and boots.” This year the algae were back, says Torres.
The proximity of humans to water exacerbates problems for the environment, but water is where the money is. Southampton’s five-mile-long Meadow Lane boasts about two dozen gargantuan homes precariously perched on a spit of sand that looks out at the ocean on one side, where double dunes protect them from the ocean’s surges, and Shinnecock Bay on the other. In addition to Michael Loeb and Michael Evans, its denizens include a who’s who of financiers and a smattering of other boldface names: Hedge fund magnates Chase Coleman, Dan Ochs, and David Ganek (who is famously suing the U.S. Attorney for Manhattan over the collapse of his hedge fund, Level Global); private equity giants Leon Black and Henry Kravis; Republican Party financier David Koch; designer Calvin Klein; and hotelier Ian Schrager, among others.
“Waterfront trumps everything,” says one Sotheby’s realtor in Southampton.
Hampton's money is still flowing, but this year a malaise exists just beneath the surface. Pierre’s, a cheery, sunflower-filled French bistro on permanently choked Montauk Highway in the middle of Bridgehampton, has become a hangout for the hedge fund billionaires who populate Bridgehampton and neighboring Sagaponack — which for the past two years was deemed the most expensive zip code in the U.S., with an average home price of $5 million. That number was no doubt boosted by a 110,000-square-foot monstrosity, which has been called “the house that ate the Hamptons,” built by junk bond billionaire Ira Rennert and now valued at $248 million.
At Pierre’s on a recent Thursday, one of George Soros’ sons was seated in the rear of the lively bistro, and former New York Mayor Rudolph Giuiliani’s wife, Judith, was outside having lunch en plein air, next to the adjoining patisserie. Still, business is off slightly this summer. “It’s the uncertainty,” owner Pierre Weber said on the weekend President Trump was threatening to bring “fire and fury” to North Korea. “You open The New York Times, and you have uncertainty all the way through,” explains the charming Frenchman, who sports a shock of white hair, a deep tan, and bright-yellow eyeglasses.
These days people are ordering less wine and asking for a deal. “I have some customers who want discounts because they think they save my life,” scoffs Weber, whose 15-year-old restaurant is open year-round. “A table of 12 buys four bottles of wine.”
Weber says many of his fellow restaurateurs blame the decline in business on the recent growth in Hamptons Air-bnbs, which has resulted in increased down-market trade. The streets of the Hamptons may be full of visitors, but the dearth of hotels and the high cost of renting a home there — $1 million for the summer is not out of the question — has opened the door for a thriving Airbnb community. On Airbnb an East Hampton bayside rental at the end of August could still be had for as little as $245 a night in mid-August. As a result, more visitors are making short trips, renting a room for a few days instead of the traditional week, month, or entire summer and forgoing the exorbitant cost of dining out in the Hamptons — or so goes the thinking.
As more-diverse people manage to find their way to the Hamptons, they bring another type of unease to this bucolic playground. This summer, for the first time, the Southampton police developed a counterterrorism force that polices large public events with semiautomatic weapons and riot gear. Could the affluence of the Hamptons, home to both movie stars and Wall Street moguls, make them a terrorist target? There have been no specific threats, but the Hamptons stand for everything terrorists oppose, notes Southampton Sheriff Steven Skrynecki. “There’s some symbolism to the Hamptons, just like New York City,” he says.
The sheriff says the population of the town of Southampton, which includes not only Southampton village but also Water Mill, Bridgehampton, Sagaponack, and Hamptons Bays, triples to about 180,000 during the summer. The counterterrorism unit is planning to monitor about 18 events this year, including benefits open to paying members of the public but held on private property.
The police, with AR-15 rifles in full view, are a jarring sight to some at public events. It may be overkill, but the sheriff doesn’t think so. “To escape the potential of that kind of violence, you have to go to the moon or to Mars,” says Sheriff Skrynecki. “That kind of guaranteed serenity doesn’t exist anywhere on the planet today.”
Southampton may have cops in riot gear and billionaires punching out teenagers, but it’s the tiny hamlet at the far end of the Hamptons, some 118 miles from New York City, that is the most beleaguered.
Ten to 20 years ago, Montauk was so low-key that hipsters deemed it the anti-Hamptons. Unlike upscale parts of the Hamptons, it was dotted with workmen’s cottages, a few aging seaside motels, and masses of undeveloped land. Its soaring bluffs provide some of the most spectacular scenery around, and even today about 70 percent of Montauk is in the hands of conservationists.
Given that it is at the tip of the Long Island, Montauk is also in the most perilous position, surrounded on all sides on water. Downtown Montauk abuts the ocean, and the encroaching coastline and heavy storms are a constant flood threat. The business district was moved once before, after a 1938 hurricane, and may have to move again. “We’re starting to work on a strategy that may include planned retreat,” says Laura Tooman. By 2100, according to Climate Central, Montauk could be its own separate island.
For the moment, however, like most Hamptons villages, there is one overriding concern. “Pollution from septic systems, in particular, is an ongoing challenge in the hamlet,” according to a report commissioned for the town of East Hampton and done by consulting firm Dodson & Flinker in conjunction with RKG Associates, LK McLean Associates, and Fine Arts & Sciences. The state of New York has already designated Lake Montauk an imperiled water body, resulting in the closure of once-thriving shellfish beds and the shuttering of one public beach, notes Concerned Citizens of Montauk. This summer high levels of enterococcus bacteria, indicating feces in the water, have been found in several watering holes in Montauk and elsewhere.
Along with Amagansett, Springs, and Wainscott, Montauk is part of the town of East Hampton (with about 22,000 permanent residents and 73,000 during the summer months), which is trying to tackle the sewage problem. In August it agreed to offer rebates of $16,000 for property owners to install “low nitrogen” septic systems and mandated that all new-home development and commercial construction use the new systems.
The tiny hamlet of Montauk (population 3,518) is literally as far from Billionaires Lane as you can get in the Hamptons. But its high-perched views have drawn in stars like Robert DeNiro and Ralph Lauren. Dick Cavett’s historic home, on a Montauk bluff overlooking the Atlantic, is on the market for $62 million.
And so, not surprisingly, Wall Streeters have followed celebrity to Montauk, which has become the Hamptons destination of choice for New York City’s young moneyed professionals, including bankers and hedge fund managers, along with the occasional starlet, fashionista, or media personality.
This summer, 36-year-old Sahm Adrangi, founder of hedge fund Kerrisdale Capital Management, rented a funky waterfront home that is accessed through a winding road of scrub pines in neighboring Amagansett for the entire summer, as he does every year. Adrangi — who was arrested in the summer of 2016 for drunk driving and possession of cocaine when his BMW hit another car on Montauk Highway — has been trying to keep a low profile this year while his case is pending. Nonetheless, he was headed to Montauk’s latest hot spot, Ruschmeyer’s, on a recent Friday night in August.
At Ruschmeyer’s, a hip hotel and restaurant set on three wooded acres, a party scene exists largely outside, under strings of twinkling lights, and goes on until the wee hours. “I want you here right now,” one slightly inebriated young female friend of Adrangi’s video-texted me that night via his iPhone. “Why aren’t you here already? I’ll pick you up,” teased her friend, lazing in a hammock as dozens of partygoers ambled past.
Other restaurants, like the Surf Lodge — where President Trump’s daughter Tiffany was spotted with her Secret Service detail this summer — are also among the few places for late-night action in the Hamptons. And the advent of Uber in the Hamptons has made nightlife easier, says Lindsay Reed, a 25-year-old PR representative whose fashion clients often invite her to stay at their homes in Southampton, which is a long trek to Montauk. “Really, nobody should be driving,” she says, referring to the partygoers.
Like many hot Montauk venues, Ruschmeyer’s recently changed hands and has undergone a face-lift. This year it has become so popular that it is totally booked through October. And like another restaurant, Grey Lady, it has been cited this summer by the town of East Hampton for illegally turning the restaurant into a late-night nightclub — a scene East Hampton Star editor Rattray frets is making Montauk seem like “frat row.” He adds, “Montauk sometimes feels like Daytona Beach of the North.”
Town officials are trying to turn back the tide, or at least stem it. After one rowdy August weekend, they sought a restraining order against Ruschmeyer’s after 200 people were found partying in a dining room with a legal occupancy limit of 48, according to town attorney Michael Sendlenski, who says Ruschmeyer’s had been denied an outdoor-gathering permit but set up a bar outside nonetheless.
“It has to be pretty egregious conduct to go to state court to seek injunctive action,” says Sendlenski. “It’s not something done lightly or willy-nilly.”
Dating app Tinder was another scourge of the summer of 2017. The company paid $100,000 to rent an oceanfront mansion house — owned by telecom-mogul-cum-real-estate-investor Michael Hirtenstein and on the same street where DeNiro and Lauren live — in Montauk for the month of July. But noisy parties for an elite group called “Tinder Select,” an invitation-only group that caters to CEOs, supermodels, and celebrities, brought complaints from neighbors and ultimately the authorities.
“You can’t turn a single-family residence into a retail establishment, catering hall, or party venue,” explains Sendlenski, who says the town is in negotiations with Tinder, which agreed to leave after the town cited it for code violations.
As another Hamptons summer drew to its end, the tony set of Southampton, where towering trees and chemically engineered lawns have replaced the original scrub pines and potato fields, was hosting an annual pre–U.S. Open tennis tournament. At the Charles Evans PCF Pro-Am Tennis Tournament Gala thrown by Michael Milken’s Prostate Cancer Foundation, pros mingled with Hamptons billionaires. This year they were playing tennis on the estates of hedge fund manager Bill Ackman, art dealer Larry Gagosian, and Republican financier David Koch.
Michael Loeb, the “Billions” homeowner, was not letting his earlier arrest on assault charges keep him out of the action either. He offered his estate for the tournament matches, followed by a lunch of oysters, seared tuna, and steak with an open bar overlooking the waves of the Atlantic.
There may be hope for the Hamptons yet: By all accounts, no one got punched out.
