Wednesday, June 23, 2010

East Hampton Downgraded

The summer playground of NYC's rich and famous has been downgraded by the credit rating agency Moody's.

Moody's Investors Service  has  downgraded the town of East Hampton's rating to A1 from Aa3 and revised the outlook to stable from negative affecting $85 million of outstanding parity debt.

"The rating downgrade reflects depletion of the town's financial reserves following four consecutive operating deficits (2004 through 2007), with further financial deterioration anticipated given a projected operating deficit in fiscal 2008 (unaudited) and fund balance decline driven primarily by management's ongoing efforts to clean up the town's balance sheet in 2009 (year ended December 31, 2009)...Further diminishment of the town's financial flexibility beyond that currently projected could lead to downward pressure on the town's rating...Moody's expect the town's sizable $32.9 billion tax base to continue to be impacted by the current economic downturn. The town's very high full value per capita of $1.5 million is indicative of a concentration of highly-valued second homes; this market is considered to be vulnerable should the economic recovery falter, resulting in further Wall Street job losses. While full valuation has grown at a strong average annual rate of 14.8% over the past five years, driven by healthy market value appreciation, growth is expected to slow or even reverse in the near term," Moody's said.

Among the very many wealthy who have (or have had) summer homes in East Hampton are
  • Jerry Seinfeld
  • Martha Stewart
  • Sean "Puffy" Combs
  • Chevy Chase 
  • Alec Baldwin 
  • Kim Basinger
  • Jimmy Buffett
Jacqueline Kennedy Onassis spent part of her childhood in East Hampton, where her grandfather owned a home.

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