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The Saugerties Lighthouse Conservancy was formed in 1985. The Coast Guard, the original owners of the lighthouse, relinquished jurisdiction, and the property reverted back to New York State. The Conservancy then bought the deteriorated remains of the lighthouse for one dollar. Efforts to stabilize the building began shortly thereafter while local architect Alex Wade completed plans for the reconstruction. A wooden barge was built to haul construction materials including tons of masonry materials. An elaborate scaffolding and shoring system was created to hold up the sagging tower, floors and roof so that new brick walls could be constructed. More than 10,000 new bricks were required to replace bricks that had crumbled. The entire masonry structure, including the massive stone base, has been reconstructed.
The lantern that houses the light was removed from the building and completely restored to its original condition. Local craftsman completed the building with woodwork, plastering, and painting. After 36 years without a light in the lighthouse tower, it was finally restored to operation on August 4, 1990. The Coast Guard installed a fourth-order fresnel lens with solar-powered light. A replica picket fence surrounds the lighthouse. On it are the names of the many keepers who lived and worked here and hundreds of donors who contributed towards the restoration.