By Rob South, WKAR
http://stream.publicbroadcasting.net/production/mp3/wkar/local-wkar-979948.mp3
LANSING, MI – http://wkar.org/images/library/programs/REWMI-120.jpg
The recent Ingham County tax-foreclosed property auction set a county record, generating around $380,000 and placed dozens of properties back on the tax rolls. | SKIP down to article
Auctioneer John Bippus moved through more than 70 properties up for auction last week in about an hour and a half. Most of the selling properties received no more than a bid or two before he moved on to the next parcel. Bippus has been an auctioneer for more than 20-years and he says the foreclosure crisis has changed the game significantly.
"Well business in the last few years is about half of what it used to be," says Bippus. "And I'm trying to get used to the new paradigm of that and the reason I say that is because I'm not looking at units, I'm looking at dollar value. We're probably selling as many units, but they're selling for less money."
All of the real estate in last week's auction was held by the Ingham County Land Bank Authority for unpaid taxes. The county is responsible for collecting and distributing property taxes for the local municipalities.
The opening bid equals three years worth of delinquent taxes plus administration fees. Some properties were let go for less than a thousand dollars. County Treasure Eric Schertzing says he'd rather see the property sell on the open market, but that's been harder and harder to do.
"The Land Bank Authority has absorbed and tried to deal with a lot of the properties in past years," says Schertzing. "The Land Bank has gotten pretty full, we're pretty busy with all of the neighborhood stabilization program funding. So, we needed to be able to get rid of properties in other ways and the auction is one of those ways to do it."
One of the winning bidders was Mark Dobronski. Dobronski owns the Jackson and Lansing Railroad company and had been looking for a place to put new offices.
"Some property adjoining our rail-road track in downtown mason came up for treasurers auction," he says. "It has some dilapidated barn-like structures on it. Looking at the property it would make an ideal location for us to locate our mason office for our crews to report to. So, we came down today to see what we could do at the auction."
He paid about $1,500 for the land, which he says he'll start redeveloping as soon as he gets the deed.
"Once that occurs we have to agree to demolish the dilapidated structures on the property," says Dobronski. "I'm going to start today getting the forces ready so once we have the deed we can tear down the dilapidated barns there and then we'll start the design for what we're going to build."
That's exactly what Schertzing says he'd like to see happen with all the properties. But out of 71 up for bid, only 30 were snatched up. And, assuming all of the bidders pay up, the county will only collect about $380,000. That's about a million dollars short of covering all the delinquent taxes represented at the auction. What's left over will go back up for auction later this summer this time, the starting bid will be for about $500, regardless of the value of the property or the taxes owed.
"So, if we don't recoup the taxes through the auction cycle, there's chargebacks," he says. "And ultimately we won't have recouped a lot of the taxes. There will be fairly significant chargebacks to all the taxing authorities on the bill."
In other words, already cash-strapped municipalities will have to pay some money back to the county. Schertzing says he hopes the real estate market will stabilize soon so the county and other local governments will have more fiscal certainty when they plan their budgets.
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