Hampton Bays School District Demands $10.5-Million For Students In Transient Housing

HAMPTON BAYS, N.Y. (CBSNewYork) -- A school war is brewing in the Hamptons.

Are families illegally living year round in transient hotels, and sending their children to school tax-free?

The Hampton Bays School District is demanding millions in compensation.

Because of its prime location -- bays, inlets, canals, and ocean -- Hampton Bays long served the summer tourist crowds, but many of its motels and hotels are struggling in the off season and beyond now renting rooms to families during the school year.

"We are living in a house, but other friends, they are in a bad situation right now," Tony Brenes said.

He said his friends are in hotels and motels, and sending their kids to school.

The Hampton Bays school district -- in an unusual turn of events -- has filed a notice of claim against the town saying it wants $10-million from Southampton as compensation for educating children living in transient hotels.

"The properties have done damage to the Hampton Bays union-free school district in unrecovered pupil costs of over $10.5-million," a document claims.

The notice also accuses local officials of failing to enforce the zoning code by permitting long-term residential use of transient hotels or motels.

"We will defend the town and the facts are entirely on our side," Town Supervisor, Jay Schneiderman said.

The complaint is coming out of the blue. Property values have been steadily rising, and school enrollment is on the decline.

"Things are moving in the right direction in Hampton Bays, it is just sad that the school can't see it. Instead of a pat on the back, we get a slap in the face," Schneiderman said.

Some called the threatened lawsuit 'veiled discrimination.'

"The kids at the school make dinners for us, Christmas, different times. You should see these schools, you should see what the kids do," Linda Esposito said.

Others said they worry about taxes.

"I think it's really selling the kids short if you're not paying taxes to go toward the school," one homeowner said.

The school's claim is false, Schneiderman said. He said the town, aggressively enforcing its code, is doing more to revitalize the hamlet, so motels and hotels are viable and not home to drifters.

He said the goal is to create affordable housing east of the Shinnecock Canal while enforcing and revitalizing neighborhoods.