PITTSFIELD, Mass. — The city recouped slightly more than $800,000 in back taxes ahead of Thursday's tax lien auction.
Director of Finance Matthew Kerwood said the owners of nearly 500 properties with tax liens were sent notification of the upcoming auction and 156 owners came to City Hall to settle the debts.
Kerwood said the liens on 86 properties were paid in full resulting in an immediate revenue boost of about $575,000 and 70 other payment plans were set up — reeling about another $240,000 in back taxes. The exact figures were changing even as late as Wednesday afternoon with owners still making arrangments.
"There were in excess of 470 properties that received the inial notification," Kerwood said.
The new payment plans are also expected to result in $115,000 worth of additional revenue per month. Those 156 properties are now safe from the auction but some 300 liens will be auctioned Thursday afternoon.
"Not all of them will sell," Kerwood said.
The auction isn't for the properties themselves but instead for the right to collect the back taxes owed. Collection companies and investors will purchase the liens and thus take over the collection responsibilities -- as well as the legal right to foreclose if there is continued non-payment.
Kerwood said three bidders have already signed up to partake in the auction online and some 35 total packages have been downloaded. Those physically going to City Hall on Thursday for the auction don't have to be registered ahead of time so exactly how many companies participate won't be known until it happens.
Kerwood said one particular company had purchased numerous liens in 2015 and has again expressed interested in purchasing more this time too, a promising sign for auction day.
The effort is aimed to recoup back taxes without going through the lengthy land court process to foreclose on a property and then resell it. In total, the city is owed about $6.8 million in principal for back taxes and about $5.7 million in interest.
"They are both sound strategies. This particular strategy removes us from the process of having to go to foreclosure. We are paid for the lien immediately so our outstanding receivable is paid and we don't have to move to the process of foreclosure," Kerwood said.
"We don't really want to be property owners in the grand scheme of things. We want to see these individuals who have outstanding taxes to have payment plans."
The city, working with Strategic Auction Alliance, placed many of those outstanding liens for auction on Thursday at 1 p.m. while giving property owners a chance to catch up ahead of time. Kerwood said the remaining 300 or so liens are being sold individually and are not being bundled.
But it doesn't represent all of the back taxes owed to the city.
"Anybody who was in an existing payment plan was not subject to the auction. The others not on the initial list were ones that we are currently going through land court or we knew there was a bankruptcy," Kerwood said.
Some of those hitting the auction block are already anticipated not to sell. Kerwood said the city opted to include some properties known as "land of low value."
"For the most part these land of low values are little lots, vacant lots, some of them have demo liens and some of them don't. They are just little orphan pieces of properties that whoever owned it basically walked away from it. We get a fair amount of interest about these properties primarily from abutters," Kerwood said.
Following the auction, the city plans to document a list of those properties and look for the Department of Revenue to rule that the city will never recoup what is owed. The city could then be granted those lots, which could be later auctioned, giving neighbors a chance to buy the land at or below assessed value.
Those attending the auction likely already know which liens those are because investors spend a fair amount of time researching ahead of the auction and are putting $15,000 down just to participate.
"They are investors. Before they bid on these liens there is a whole lot of legal work to make sure the paper trail is in order," Kerwood said.
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Holyoke Mayor Morse Challenges Neal In Congressional Race
By Andy McKeeveriBerkshires Staff
Morse is joined by a large crowd of supporters at the Unicorn Inn on Monday night.
HOLYOKE, Mass. — They said he couldn't do it.
There is no way a 21-year-old, turning 22, could defeat an incumbent mayor with years of political experience. And there was no way the city of Holyoke was ever going to be as good as it had been.
"When I ran for mayor eight years ago, people had a few things to say. They said No. 1, wait your turn. No. 2 maybe run for something else. Or No. 3, don't run at all, you are too young, too gay, too progressive, you are not going get elected here in the city of Holyoke," Alex Morse said at the Unicorn Inn on Monday night to a crowd full of supporters.
They said he couldn't do.
There is no way a 21-year-old, turning 22, could defeat an incumbent mayor with years of political experience. And there was no way the city of Holyoke was ever going to be as good as it had been. click for more
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