John White’s family has been working its 57-acre oceanfront farm in Sagaponack since 1695, the last holdouts against a tide of Wall Streeter mansions. But in an effort to save his children's inheritance—by selling 10 of those acres to a Houston oil mogul—White may have lost it all.
On a field by the ocean, in the heart of the Hamptons, a lone farmer tends his rows.
The village is Sagaponack, not long ago ranked America’s richest real estate. To the east is singer Billy Joel’s dune-front house, put up for sale after the end of his last marriage. Across the lane, hedge funder David Tepper is about to start tearing down the mansion on the 6.5-acre property he recently bought for $43.5 million, while just beyond, the towering chimneys of billionaire industrialist Ira Rennert’s 100,000-square-foot compound shimmer in the sea-spray mist. To the west, across Sagg Main Street and Sagg Pond, are the shingled mansions of several Goldman Sachs partners—On Goldman Pond, as the locals put it. Amid this ostentation is the 57-acre potato field of John C. White, whose family has owned it, and continuously farmed it, since 1695. White’s homelot, as he calls it, is not only the oldest family-owned oceanfront farm field in the Hamptons, it’s also the last. But it may not be John White’s much longer, if one of Houston’s wealthiest oil-and-gas men has his way.
One summer long ago, Anthony and Cynthia Petrello rented one of the little wood-shingled cottages tucked against the dune at the ocean side of the Whites’ farm—all visible from Sagg Main as it curves to the beach. The Whites had rented out these cottages—camps, as they call them, that had originally housed migrant workers—for years. To his renters, John White made no secret of his fear that on his death his four grown children might have to sell the farm to pay estate taxes, so fast were land prices climbing. Maybe if he sold a corner of the field, he’d have the cash to keep the rest intact. Anthony Petrello thought he could help. He would buy that corner and build his dream house.
A decade of bitter litigation later, Petrello, president and C.O.O. of Nabors Industries, the biggest land-based oil-drilling company in the world, seems poised to acquire nearly the whole 57 acres. An innocuous-seeming clause in the original contract gives him “right of first refusal,” he argues, to buy the open field, along with the Whites’ two-story 19th-century farmhouse, at the corner of Sagg Main and Bridge Lane. John White, 89, feels fooled and betrayed. Petrello, 56, feels the family hornswoggled him at every turn. As they’ve battled, the stakes have risen: not long ago, an oceanfront plot about the size of John White’s farm, just up the beach, sold to mutual-fund billionaire Ron Baron for $103 million.
All that’s happened to the Hamptons lies in this archetypal tale: the coming of money, the breaking up of farms and the building of McMansions, the end of community, the fraying of trust.
Once upon a time, a scattering of potato farmers managed this patchwork of fields, with some of the most fertile soil in the world, as a hamlet with just one store. Hardly anyone lived here who wasn’t a farmer. Then the writers found it—Peter Matthiessen in the mid-50s, later James Jones and Truman Capote, Kurt Vonnegut and Irwin Shaw and Willie Morris. They moved into the old farmhouses and drank through winters as desolate as North Dakota’s. Southampton had the old money, East Hampton the new; this humble in-between place felt like the farmers’. But the writers—and artists, among them Bob Dash and Sheridan Lord—were followed, as always, by the rich in search of the next great place, and suddenly, in the mid-90s, Sagaponack was it. Lloyd Blankfein, then an executive at Goldman Sachs but not yet its chairman, was an early Wall Street arrival. Goldman’s then head of investment banking, Bob Hurst, was another, as was its current number two, Gary Cohn. The Wall Streeters weren’t content to live in old farmhouses. They wanted open land on which to build their big, and bigger, houses. Rennert’s colonization of an entire farm field upped the stakes in l997. By then, Anthony Petrello had put down his marker in the southwest corner of the White family farm, and a tragic story had begun to unfold.
On a hook by the back door of John White’s house hangs his jacket from the Bridgehampton volunteer fire department. “Red” White, as John is known, was a volunteer for more than 50 years. Now shrunken with age and stooped by a lifetime of farming potatoes, White tends to doze at the kitchen table. He has “diminished capacity,” and the details of the lawsuit get jumbled. “I’ve never signed anything giving anyone right of first refusal,” he says, perking up at one point.
Thomas, 49, one of his four grown children, sighs. “Yes, you did, Dad.”
When John White was a boy, he farmed this field with horses, as his Scottish ancestors had done. At 17, in the hurricane of 1938, he rescued his father, hanging on for dear life to the little bridge on Bridge Lane. He served in World War II but never left the farm again. His future wife was from New Jersey; he met her when she came to visit “kinfolk up the road.” When Betty died, last winter, at the age of 87, some 350 neighbors attended the service at the Presbyterian church originally presided over by family forebear Ebenezer White in 1695.
Tony Petrello found his way to the farm in the summer of 1992 through his best friend, Mike Burrows. The two had worked as up-and-coming lawyers at Baker & McKenzie in New York. Burrows, who’d rented one of the cottages since the 1970s, tipped off Petrello that the camp next to his had come free. “The model”—so called because it had been built on the side of Route 27 as a model-house display in the early 1960s before John White bought it and hauled it out to the dune—was just 650 square feet, but no one could fail to be charmed by its new location.
Petrello had grown up in a lower-middle-class Italian neighborhood of Newark, New Jersey, the grandson of immigrants. Gifted in math, he won a full scholarship to Yale and went on to Harvard Law School. At 31 he was named managing partner of Baker & McKenzie’s New York office. At 37 he accepted an offer from one of his clients to be day-to-day head of Nabors Industries. It was a ticket to wealth—considerable wealth—but it did mean living in Houston. For Tony and his Connecticut-born wife, Cindy, a former soap-opera actress and TWA flight attendant, renting “the model” was a way to escape the Houston heat and see their families back East.
The Petrellos joined a casual fraternity of White-farm cottage dwellers. All were quite successful, but life at the beach was low-key: cocktails and moonlit barbecues. “It was like the beach version of how I grew up,” recalls Petrello, “where everyone knew each other, you hung out on your stoop … ” When word went around in the summer of 1995 that Tony and Cindy had bought the southwest corner of the field, including one of the cottages, the fraternity was delighted, especially Mike Burrows.
White was no hayseed. For years, he’d weighed various plans to subdivide the field. But Petrello was no country lawyer. By the time they met on the porch of “the model” one August day in 1995, they’d haggled quite a bit to reach a deal. Petrello would commit to buying roughly 11 acres for $2 million, a not unreasonable price, given that the whole field had just been appraised for $6 million. But Petrello would pay more than that. The field first needed to be subdivided; he would front those costs. Only when the subdivision was done would the deal actually close.
A festive air suffused the porch meeting as Tony and Cindy Petrello, along with John White and his son Jeffery, then in his late 30s, reviewed the memo of sale Petrello had drawn up, the field unfurling majestically from where they sat. The only sensitive point was the size of the house the Petrellos would build. John White wanted to be sure they wouldn’t erect one of those “monstrosities” that had begun to pop up all over. Cindy told White that she and her husband would live happily in a house the size of “the model” if they could own on the beach instead of renting. But Petrello’s lawyer, David Berg, now says, “It is just silly for anyone to say that Cindy was committing to a house the size of the model.” It was a passing remark, not to be taken seriously.
The Petrellos did tell the Whites they admired designer Calvin Klein’s oceanfront house, a hulking, shingled mansion originally owned by Pan Am founder Juan Trippe.
Later, John White would take it upon himself to measure the house, saying it was roughly 16,000 square feet. Large indeed for the time. But had the Petrellos said they hoped to build a house like Calvin Klein’s in size? Or just style? Later, the Whites would say Petrello gave them repeated assurances his house would be modest in size; he just couldn’t put that in writing, they claimed he told them, because it would limit the size of the mortgage a bank would grant. (Petrello denies he ever said that.) The contract did say that if the Whites chose to sell any more acreage, Petrello would have the right to match the highest offers they got. John White could pass the property directly to any of his descendants, but any other plan would trigger this right of first refusal. After all, Petrello was like family now. If the Whites needed to sell any land, he should be able to buy it—to keep it in the family, so to speak.
White had no lawyer advise him on the 1995 memo of sale—he didn’t like lawyers as a rule, and hated their bills. Later, that would seem a grave mistake.
‘There’s not a single document telling me any square-foot limitation of size,” declares the man who is, to the Whites and their friends in Sagaponack, the villain of the tale.
Tony Petrello looks like the math professor he could have become: thickly bespectacled, soft of chin, stern, and rather pedantic. In his lawyer’s Houston office, only his elegant clothes suggest the oil-and-gas mogul he is. The picture becomes clearer when, with some reluctance, he leads a tour through his 18,000-square-foot Spanish Mission-style mansion in Shadyside, one of the city’s most exclusive enclaves. The five-acre property includes a tennis court, lots of gorgeous oaks, and a round grassy labyrinth, Cindy’s inspiration, based on the original at Chartres Cathedral. The labyrinth is for meditation; monks once followed the paths of the one at Chartres on their knees, the Petrellos explain as the lawn sprinklers come on, soaking Tony’s elegant shirt and Hermès tie and wrecking the meditative mood.
One off-season weekend, in 1996, White flew to Houston, on his own, to visit the Petrellos and see their new Shadyside house. How could he not realize that the Petrellos would want a comparable-size house on his field? White had a different perspective. He told his family he had Tony Petrello’s word the house would be modest, and that was enough for him.
The Petrellos’ original contract with architect Francis Fleetwood, dated October 1996, seems to support this: it called for the architect to design a house of between 4,500 and 7,000 square feet. Later, a judge would ask Fleetwood about those numbers. “If you look at my contracts, the numbers can be very accurate or very inaccurate,” Fleetwood would say. To which the judge would reply, “So why put them in?” Petrello’s lawyer, Berg, says, “What was really going on is that Fleetwood had had preliminary conversations with the Petrellos but had not started work. When Fleetwood did sit down with the Petrellos the next year, the result … was plans for an 18,000-square-foot home.”
The Petrellos were still renting “the model” in the summer of 1997—the subdivision process grinding along—but Tony was getting seriously rich, and to his friends he’d taken on “a bit of flash,” as one put it. When he spoke now of the house he wanted to build, the word he used, according to one friend, was “grandeur.” “Tony did say he wanted a home that conveyed a certain grandeur,” allows Berg, “but to the Petrellos that means quiet elegance and the complete opposite of flashy.”
As for the house in Shadyside, purchased in 1996, it was a disaster. The Petrellos planned a complete restoration—oil money had built it in 1920—and then the needs of their daughter, Carena, who had recently been diagnosed with cerebral palsy, dictated there be more bedrooms for all the nurses needed to care for her.
Petrello decided to change the design of the first floor. “But he liked the second floor,” recalls builder Chandler Robinson. “So he said, ‘Remove the first floor, but keep the second floor up there.’” Robinson found a way to do that, but it wasn’t easy. When he missed the original deadline, Petrello refused to pay him $350,000 and kept $250,000 the builder had given as “retainage” until the job was completed. Then Petrello sued him for not getting the work done on time. Robinson says he was stunned. He had built houses for former president George H. W. Bush and Michael Dell, of Dell Computers, among others. “If there’s a modern-day Satan, it’s Tony,” groans Robinson. “If you’re around him you see it: he’s mean, he’s self-centered, he’s very aggressive On top of everything, he wants to hurt you. He really wants to hurt you. It isn’t just business with Tony, it’s personal.” (In response, David Berg supplies a letter written by Robinson to the Petrellos in July 2001, after both sides had withdrawn their legal actions. In a formal tone, the letter states, “Our review has shown that the Petrellos are indeed honorable people who abide by their commitments.”)
Forced by Carena’s needs to stay in Houston, the Petrellos stopped going to Sagaponack. But they stayed in touch. By the summer of 1999, the Whites well understood that Tony Petrello wanted to build a big house on their field.
Concerned, John White wrote Petrello to ask about it. Petrello replied that the house would probably be just 14,000 to 16,000 square feet, adding that the odds were “very remote that the house exceeds 20,000 square feet.” In that letter, he offered to undo the deal if the Whites wished to “unscramble the eggs,” as he put it. But the Whites say they didn’t want to provoke him and were now wary of anything Petrello proposed. So was Mike Burrows. “At that point we became afraid of Tony,” Burrows later said in a court deposition. “Tony had changed And he became very aggressive It became clear to me that he was not going to do what he promised.” Burrows did admit Petrello had some cause to be irked. Not only was the subdivision unfinished, Petrello, at the Whites’ request, had sent three down payments totaling $635,000. And yet his piece of the land was still out of reach. The Whites still had it all.
“[The Whites] were sitting on land that was more valuable than anyone’s,” says Marilee Foster, whose own family has farmed in Sagaponack since the 1870s. “But they didn’t act like it. They were lower-middle-class to all appearances, driving broken-down pickup trucks. Obviously their eye was on something greater than financial reward.”
Now, with the kind of big house popping up right and left about to rise on John’s own field, he was appalled, but Foster never heard him lash out. About all she recalls him saying as the deal turned sour was “I guess a handshake just doesn’t mean anything anymore.” (Responds Berg, “That’s what I always say about the case: a man’s word is his bond. And it took a court order to enforce that bond.”)
John White was a man of few words, most of them short. Back before the summer people came, most of the farmers would gather every evening on the porch of Sagg General Store because the mail came at seven P.M. “Not usually John, though,” recalls Merrall Hildreth, whose family had owned the store since the late l9th century. Hildreth lived in the house next to the store—still does—and sometimes White would join him on the front porch. “I don’t talk much either,” says Hildreth. “The two of us together—it was pretty quiet.”
Still, in his ornery, Scots-quiet way, John White was a pillar of the village. He didn’t just serve in the Bridgehampton volunteer fire department; for a while he was its chief. “After a snowstorm, he would come plow your driveway—for free, of course, that’s what neighbors are for,” says Hildreth. The White children followed suit, with Tom and Jeffery active in the Presbyterian church, Barbara in the Horticultural Alliance of the Hamptons, and Johnnie a volunteer E.M.T.
Decades later, Johnnie still wins honors for responding to more calls than anyone else. “So many times at a beach party, Johnnie would get a call,” says Peter Klebnikov, an environmentalist and lifetime neighbor of the Whites. “A beautiful July Saturday night— and he would be the only guy who went to the scene. I’ve seen boldfaced names come up to him and thank him for saving their lives.”
Among the farmers of Sagaponack, John White had a reputation for being thrifty to a fault. Rather than buy a gravestone for himself and his late wife, he used the backside of his parents’ stone: there it is in the Sagaponack cemetery, with John C. White on front (1882–1946) and John C. White on back (l921-). Yet the Whites were setting aside for conservation more land in Sagaponack than anyone else: parcels the family had traded over generations with other farm families, some 90 acres in all. Selling that land to developers would have made the Whites rich. Instead they’d taken a fraction of market value to keep those fields open. “It’s hard for most of us to understand how deep an attachment to the land the Whites have,” says Klebnikov. “They’re like characters out of Willa Cather.”
Finally, the subdivision was approved and filed in mid-2000; the deal could close. Petrello would be getting 9.56 acres in three contiguous lots. But something very dramatic had happened since that long-ago porch meeting. Land prices had skyrocketed. The farm was now appraised at around $32 million. That meant that the $2 million wouldn’t even cover estate taxes. John White wrote to Petrello, suggesting they needed an extra $6 to $8 million for his lots, which together were now appraised at $14 to $16 million. Petrello declined. “There was a sense of entitlement to them,” Petrello says. “That they were entitled to redo a deal because it would help them.” Also, he says, “their argument that they needed the money to keep the farm is false. At any time they could have put a conservation easement on the land. But they wanted cash.”
The Whites say that isn’t true: Southampton’s land-preservation fund was established only in 1999 and didn’t have enough money in 2000 to buy an easement on the whole field. (The fund’s Mary Wilson confirms this.) The Whites could have donated the easement. But then they would have made no money at all.
The Whites canceled a first closing in late 2000. They felt Petrello had lied to them about the house size. They said he’d also promised, many times, to donate development rights to his northernmost lot, take the tax deduction, and sell the land back to the Whites at agricultural prices: a buffer for him, more farmland for them. This, too, he had said, couldn’t be put on paper, or so they recall. Petrello says he was always clear he’d do that only if and when he liked. To the Whites, that was another oral pledge broken. (Counters Berg, “These oral promises are fabrications.”) Until Petrello made some concessions on paper, they’d sit tight. They canceled a second closing the following May. Petrello sued a few days later. He notes that the Whites made no mention of giving him back his down-payment money or the money he’d spent getting the land subdivided. Jeffery White says Petrello never asked for his money back—and didn’t want it. “When he sued, we couldn’t have given him back his down payments—that was never on the table.” Besides, says White, “he was after the land. After all, it was worth so much more. And he had those rights of first refusal.”
Furious, Petrello said he would “bury” John White under legal bills, according to one of the Whites’ lawyers. Petrello claims he never said that. “My sentiment was I would do what [was] necessary to protect our rights.” Ten years later, the filings from that litigation fill a good-size storeroom.
A year ago this month, the Whites were finally forced to close on the sale: 9.56 acres, in three contiguous lots, to Petrello for $2.1 million—a slightly revised figure—less his down payments. Along the way, the Whites had done something that seemed to belie Petrello’s sense of them as greedy. They sold development rights to their beachfront land—all except the Petrellos’ slice—for $14 million to the Town of Southampton, which by early 2007 had the money in its preservation fund to swing that kind of deal. The Whites could have gotten twice that much by selling off beachfront lots of the subdivided field to mansion builders. Instead, the beachfront will remain open in perpetuity, a lovely view for all, including Tony Petrello. Most of that $14 million is gone—spent, in large part, battling with Petrello in court.
And yet Petrello is still filing more legal claims—for all the money and inconvenience he says the Whites have cost him. “It has nothing to do with money,” Petrello says. “It’s an issue of accountability and fairness.” He is demanding the Whites reimburse him for “delay damages.” These, says Berg, include the $62,500 Petrello spent on trees a decade ago in anticipation of the original closing, along with another $13,422.13 in landscaping. He wants them to pay him the $257,000 he paid his architect for the house he can no longer build, thanks to new flood-zone standards and coastal-erosion rules. Also for the increased cost, a decade later, of constructing his house. The original house, had it been built back in 2000, could have provided rental income ever since; Petrello wants that decade’s worth of rent, along with the money the Whites got from renting the dune-front cottage on Petrello’s parcel these last 10 summers. He wants the Whites to pay his 10 years’ worth of attorneys’ fees too: $4.3 million.
But that’s not all.
Petrello now knows that over time the Whites transferred ownership of most of the farm into trusts. He feels he knows why. By his right-of-first-refusal clause, any of the four children could inherit land directly. But what if one of them died? They have only one grandchild among them—Eliza, 25, daughter of Johnnie. Petrello feels the Whites used the trusts to allow for the passing of land into nonfamily hands. An early trust contains the main farmhouse; at one point it had less than 90 percent family ownership, which Petrello says triggers his rights. More recent trusts contain only family members but allow for the possibility—some future day—that the family trustees could bequeath the land to non-family members. That in itself, says Petrello, triggers his rights—today. So Petrello says he can buy all the land that’s gone into the trusts, at the same market value the trusts assigned to it. Those 24 acres of beachfront for which the Whites sold development rights? He can have 95 percent ownership of that chunk the family put into a trust—for the roughly $3 million value they set on it. As for the main farmhouse, Petrello notes it was put into an early trust without an ascribed value. So he’s due it for “zero consideration.” Once the Whites provide an honest answer to the value of the transfer, he adds, the Petrellos will pay that value.
Petrello has acquired a nearly 10-acre parcel of oceanfront land for a tenth of its current market value—or less. Is that not enough? “Why should they be allowed to walk away scot-free,” says David Berg, of the Whites, “when they’ve created all these problems and caused all this trouble for Tony?”
On these radiant days of early summer, most beachgoers throng down to Sagg Main Beach, oblivious to the fate of the field to their left. Mansions have encroached on, or all but covered, most of the farm fields that once spread like a patchwork quilt for miles. Lloyd Blankfein’s farm-style house on Parsonage looks almost demure, so large have the houses and their lots become since it was built.
Just north of Rennert’s property is the sprawling, gambreled mansion of Gary Sumers, a Blackstone senior managing director and chief operating officer of the investment firm’s real-estate group. A block away, on Hedges, lives billionaire financier Henry Silverman, lately of Apollo Management. The original farmhouse on his property, transformed, is now the guesthouse; the new main house looms behind it. Some of the largest of the new homes are on Sagg Pond. North of the bridge, near Bob Hurst and Gary Cohn, is the equally capacious wood-shingled retreat of Tracy Maitland, whose Advent Capital has managed hip-hop mogul Russell Simmons’s fortune.
All this has tested the bonds of community in a town that once prided itself on them. And the latest turns in the White-family-farm saga have left the longtime residents both angry and aghast. “Whatever mistakes [the Whites] may have made with this guy, I don’t know,” says Tinka Topping, who married into a farm family that, like the Whites, goes back in Sagaponack to the 1600s. “But someone who comes in to grab some beach footage for summer use is a travesty if it interferes with land that belongs to farmers and preserving whatever vestige of a farming community this village still has. It’s just infuriating to those of us who do care.”
“It appears that Mr. Petrello made a very good deal on the land exchange,” says Peter Matthiessen, “and one wonders why he would pursue these other claims under those circumstances.”
Petrello has big plans for Sagaponack.
He will start by replacing the cottage that sits on his oceanfront slice—the westernmost of the old White camps. Architectural plans submitted in late March to the Village of Sagaponack show a two-story, five-bedroom home with a library. Not counting its pool and deck, the new cottage will be nearly 5,000 square feet. This will be the guesthouse. No plans for the main house, behind it, have been submitted as of yet.
If Petrello wins his right-of-first-refusal suit, he’ll own some or all of every part of the farm, except for the house occupied at the north end by John White’s sole daughter, Barbara, 57. (Her house was deeded to her directly, so no right-of-first-refusal claim there—at least for now.) If he loses the suit, says Berg, Petrello will appeal. At some point, he may win by default. “I think he’s trying to bankrupt us,” says Johnnie White. “Because then we have to sell—and he gets right of first refusal.” (“That has never been [my clients’] aim,” counters Berg. “That is just one more slander from the Whites, designed to poison any jury pool.”)
“This is not revenge,” Petrello says. “This is just a continuation of two things. First, the original understanding was: if the White family wasn’t going to use it, it’s us. And basically what has happened, and these trusts only reinforce this, is that the Whites really aren’t farmers; they’re in the real-estate business. They have a bunch of summer renters; they don’t invest in the farm.”
“The land is all being farmed, just not by us—we lease the land to the Fosters, they farm it,” says Johnnie.
John White can no longer agree or disagree with a fully rational mind, but he knows that, for all his planning, something went wrong, and the farm, which he hoped to keep intact for his children, may soon be broken up.
“I don’t remember any agreement on three lots,” he says, rousing himself from his doze. “I don’t know where you get the three lots from, Tom.”
“I know, Dad,” says Tom. “I know.”