Tuesday, December 16, 2008

Selling "land banking" property for less than value

The City of Toledo has a land banking program. On today's agenda, there are three ordinances to approve the sale of such properties, but for less than the listed value at the Auditor's AREIS website.

One ordinance is to sell 1624 and 1626 Dorr Street to the Brownstones project for a total of $1,000. According to AREIS, the 35% value of these two properties is $2,350 each and the 100% value is $6,700 each. So why would the city sell them for a total of $1,000?

The second ordinance is to sell three properties to Southern Missionary Baptist Church: 1236 and 1240 Pinewood and 1111 True St. AREIS lists the 35% value for the three at $1,690 and the 100% value at $4,500. The city plans to sell the three lots for a total of $450.

The third ordinance is to sell two commercial lots on North Detroit (1933 and 1935) to a contiguous property owner. AREIS places the 35% value of the two lots at $4,940 and the 100% value at $14,100. The sale price is $300.

I realize that property values in Toledo have decreased, but this much?

The Dorr St. properties are being sold for 17.5% of the 35% (taxable) value and 7.5% of the full value.

The Pinewood/True St. properties are being sold for 26.7% of the taxable value and 10% of the full value.

The N. Detroit properties are being sold for 6% of the taxable value and 2% of the full value - and, remember, these are commercially-zoned properties.

Considering that the city is trying to figure out ways to make up a $10 million deficit for 2008, should we really be selling such properties for so much less than the actual or taxable value? And who gets to decide how much those properties sell for? Why is a church paying a larger percentage of the value than a private property owner who is purchasing commercial property?

Final thought: will city council ask these questions before they vote on these items tonight?


Casmi said...

The only thing that comes to mind about WHY these properties are being sold so cheaply is this:

The addresses listed are in 'less than desirable' areas, and thus will remain a maintenance/upkeep expense for the city/county UNLESS they sell it off and make it the responsibility of someone else.

A year or so ago I had a client that was interested in a home on Parkwood. There was a vacant lot behind the property that was in the land bank. When I called to ask how much it would be to purchase that lot I was told that my client would have to wait until that lot went to auction (done twice a year, I was told) and then hope that they would be the highest bidder.

My client did not want to purchase the home on Parkwood without knowing that they could/could not have the small lot behind it. Boom! Dead deal.

This appears to be, yet again, another demonstration of what I call "willy nilly decision making" on behalf of our elected officials.

Is it any wonder that Toledo and Lucas County are in trouble?

Casmi said...

A correction to my previous response - the home I referred to was not on Parkwood, but it is on Glenwood.

The vacant lot is on the corner of Maplewood and Highland.

My apologies for the confusion.

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