Is the taxpayer getting a good deal when Toledo sells property for $500?

Toledo City Council has an item on the agenda for tomorrow's meeting that would sell a piece of property.

Normally, this isn't a big deal, especially because, under Mayor Mike Bell, the city has been trying to dispose of city owned property for both the revenue and to eliminate the cost of maintaining it.

However, when property is sold for significantly less than the appraised value or even the fair market value, the city - read: taxpayers - suffer.

That is the case with this ordinance:

O-370-12 Authorizing the Mayor to execute and deliver needed instruments to effectuate the sale and conveyance of a portion of certain City-owned real property located at 220 Columbia Street to Mark A. Martin for the amount of $500; authorizing the deposit of the net sale proceeds; waiving the competitive bidding provisions of T.M.C. 187; and declaring an emergency.

The City operates a Land Reutilization Program pursuant to Section 187.19(a) of the Toledo Municipal Code which authorizes the City to accept nonproductive land and dispose of same pursuant to Chapter 5722 of the Ohio Revised Code. The Department of Development oversees the review and processing of the program which includes a property that Mark A. Martin wishes to acquire a portion of at 220 Columbia Street. This property will be utilized for lot expansion of 2257 Putnam. The negotiated sale price to Mr. Martin for this property is $500.

The county auditor's AREIS website sets the 100% value of 220 Columbia (a half-acre empty lot) at $20,600. The 35% value (on which the property is taxed) is $7,210.

Now, I understand that what you can actually get when selling a property is often different from the auditor's value of the property, but is a sale price that is 2.4% of the value a good deal for the taxpayers? Even if you look at the 35% value, the sale price of $500 is only 7% of the worth of the property.

Additionally, the ordinance waives competitive bidding, which means that others who might be willing to pay more for the property are excluded from the possibility of doing do.

Dos the $500 even cover the city's costs of owning this property? According to the AREIS website, the City has owned and maintained it since 1999. They got it from J.R. Talley who acquired it as forfeited land in 1991.

While the purpose of selling the property may be to return unused land to productivity, I believe the city should tell the taxpayer - perhaps in the text of the ordinance - how much it has cost us to maintain it and why they believe the sales price is a 'fair market value' and in the best interest of the taxpayer.

These are the questions I have just looking at the ordinance. Do you think any members of council will ask for such information?

Inquiring minds....

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?