It's all about a proposal for the village to absorb 17.2 acres currently outside its borders. As part of the village, the KACE property east of the San Simeon Nursing Home would have a right to public sewer service. Land served by sewers can support residential development at densities far above what's permitted with on-site septic systems.

The suit was filed under the previous administration of mayor Dave Kapell, and the KACE company, owned by the Kontokosta family, is covering the village's legal expenses.

It's a project many villagers, including current Mayor David Nyce, fought four years ago. But since Mr. Nyce took office with a new board more than two years ago, the board has taken no action, pending completion of an environmental study. The state Department of Environmental Conservation assumed responsibility for reviewing the report.

Whatever testimony the village receives at its Nov. 12 session will be added to the record amassed by DEC administrative law judge Richard Whistler last week. The DEC will continue to take written comments until Nov. 30 and KACE principals Michael and Dino Kontokosta will have an opportunity to respond to any concerns raised during this comment period before the final environmental study is written.

The Kontokostas proposal calls for 128 units, half of which they say would be designated for workforce housing. At last week's hearing, Theresa Elkowitz, principal of VHB Engineering, which drafted the DEIS for KACE, said the workforce housing units would be kept affordable in perpetuity and require no governmental subsidy. She offered no explanation as to how affordability would be perpetuated.

In 2005, Dino Kontokosta said the size of the workforce units would assure they would remain affordable. Two people who testified last week -- Diana Weir from the Long Island Housing Partnership and Patrick "Skip" Heaney, a commissioner with the Suffolk County Department of Economic Development and Workforce Housing -- endorsed the project citing Southold's need for affordable housing.

In an interview following the hearing, Ms. Weir said she has talked with the Kontokostas, but has no contractual agreement for the Long Island Housing Partnership to get involved. If it did, LIHP would impose its own standards requiring that the units be perpetually affordable, she said.

There has been no change to the earlier KACE proposal, but the principals are prepared to include controls on sales price, resale and homeowner qualifications in response to concerns voiced during the first hearings, Dino Kontokosta said.

"These restrictions will be in place for a minimum of 30 years and are consistent with both Suffolk County guidelines and current Town of Southold policy," he said.

Another possible turnaround could be in the making as the Greenport Board of Education examines its response to the proposal. The draft impact statement concluded that the school could accommodate additional students from the development. In 2005, former superintendent Charles Kozora argued that the tax revenues generated by the project wouldn't cover the cost of educating students living in the development.

Current board president Heather Wolf said she and her fellow members aren't sure how they feel about the KACE plan.

At the October hearing, Greenport resident Jim Dinizio said he welcomed the development as a means of assuring the strength of the Greenport School District. Noting that in the last year, Oysterponds, which sends its junior and senior high school students to Greenport, had threatened to take their business elsewhere, Mr. Dinizio said if that happened, Greenport couldn't survive.

However, Ms. Wolf said the board's response to the development won't be dictated by fear of losing the Oysterponds contract. She predicted that in the year ahead good will between Greenport and Oysterponds would increase.

School board members will continue to discuss the situation and may seek a professional to guide them in responding to the study and its potential impact on the district, Ms. Wolf added.

On another front, several environmentalists, including representatives from the North Fork Environmental Council, the Southold town land preservation committee and the Group for the East End, all suggested the land is ecologically valuable and would be compromised by the Kontokosta project.

jlane@timesreview.com

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