CITY COUNCIL
Jim Love / SUITE 425, CITY HALL
COUNCIL MEMBER, DISTRICT 14 / 117 WEST DUVAL STREET
OFFICE (904) 630-1390 / JACKSONVILLE, FLORIDA 32202
FAX (904) 630-2906 / E-MAIL:
4/26/14
8:37 PM
MEETING MINUTES
TAX FORECLOSURE SUBCOMMITTEE
(A subcommittee of the “Stand Up for Your Neighborhoods” Committee, chaired by CM Denise Lee)
DATE: Thursday, 4/24/14
LOCATION: City Hall, 1st Floor, Committee Room - B
TIME: 10:00 AM – 10:45 AM
TOPIC OF MEETING: Discuss City of Jacksonville Tax
Foreclosure Policy for properties valued
below $5,000.00
ATTENDEES: CM Jim Love, ECA Kevin Kuzel, Joe Namey, John Jones, Karen Bowling, Michael Love, Michael Corrigan, Paige Johnston, Sandra Stockwell, Kimberly Scott
CM Love - Asked the attendees to introduce themselves.
John Jones - If you recall from the neighborhood’s committee meeting parcels that were valued at less than $5000 the city calls the tax certificates they don’t get processed for tax foreclosure because the value is so low. A Florida State Statute requires that it be done over $5000. The hand out that Mr. Jones gave showed 50 properties (all vacant lots) in the target area that were all valued under $5000. Mr. Jones explained the handout in detail. It is possible to foreclose on the nuisance abatement properties. If foreclosed upon, the city still has to pay the real estate taxes. The city still has to pay real estate taxes you can’t get that washed out like you can the other. Any information that the committee wants to know, is in the handout. If the city foreclosed other fees can be waived, but title search costs have to be paid.
Paige Johnston - With the title companies, If you batch a group of properties like this, the title search company may give the city a better rate. Also, If properties are contiguous, there may be a discount or we may be able to negotiate a better price.
John Jones - It is my understanding that the city has an account to take money from whenever you process the properties that are valued over $5000.
Michael Corrigan - stated that the councilman could add to the budget extra funds to cover processing the properties valued under $5000.
Councilman Love - Is there are already money in the account.?
Michael Corrigan – The state requires processing if the property is valued over $5000.
Paige Johnston - You also have to consider the cost of OGC doing the foreclosure.
Michael Love – The city in this case is like any other entity. It can move forward with the tax deed Application. If the property owner doesn’t redeem that, it goes to auction, and anyone can buy it. If no one does, it will move to the list of “Lands Available”, and the city can purchase it. If not purchased, then anyone else can purchase it. If it is still not sold, then after three years it escheats to the city. This is the tax deed process.
Paige Johnston - If you are going to foreclose on the nuisance liens, that would be a true court foreclosure action?
Michael Love - That would guaranty the property, this does not. If the goal is to have the property on the tax rolls, because the city is not going to be paying to maintain it.
John Jones - Said he thought CM Lee would want the city to own these properties. But, the only way to keep the properties maintained is for the city to own them. Jones also brought up the “Clean it Up / Green it Up” program started under the Delaney administration. Jones said – the city had an agreement with an attorney who processed these in bulk, and Habijax would pick the properties they wanted, and pay the taxes and the cost of the litigation.
Michael Corrigan - The city would waive the nuisance liens.
John Jones - The real estate taxes were left…
Michael Corrigan - Habitat International is launching their international program in June… They are looking to build 22 houses in 22 days…
Sandra Stockwell - You need to be aware if you do these batch foreclosures like Habitat did, you come out with the title that is not marketable and not insurable. You own the property but you can’t get title insurance on it and it makes it harder to sell and we are now working with Habijax to help fix some of the issues with the properties that they have.
John Jones – Our history in the past has been a particular piece here and there and we asked to be put on the auction for the taxes. That was always done. In this case this we would be asking for 50 which would break the bank, so we would have to fund that. It is a real possibility that we add that to the budget this year. I don’t know if you want to do that, but…
John Jones - The bottom line on these properties if we don’t do something these properties would just sit in limbo…
Michael Corrigan – and there is an expense to the city because when they don’t take care of them they then become as an expense so we are incurring an expense. One of the questions that Corrigan had was on the tax certificates it then if there is multiple years, have we verified that the city was the purchaser of that certificate. Because if it’s a mix then you do not have to redeem the other certificates. You also can’t create a bill to wave the other investors because the other investors have to be paid.
Michael Love – Could we receive the spreadsheet so we could add a column to the spreadsheet…
Councilman Love – You brought up a good question– of what are we trying to do. Are we trying to reduce the blight problem. And if the city owns it, the city mows it. Another idea, if another person owned it who cared and they were able to get a little bit bigger yard out of it then that might be a good idea. The ultimate goal is to make the neighborhood better and for the city to have less cost, because if we owned the mall and we had to mow the mall I don’t know if that is a good thing. If we can get them into the hands of people that care then whatever the case may be, on attended property is not a good thing. The way I understand it, if the city wants to own it, it has to pay off the tax liens. We are just paying ourselves.
Karen Bowling – I was surprised to see that most [of these properties]are locally owned…
Michael Corrigan – at some point there is an opportunity to create a marketing tool. The other thing is, if the city owns it and Public Works has a regular routine of maintaining those properties, that’s much cheaper then reacting to a citizen’s complaint about problems with the property. It is easier to mow it and maintain it on a monthly basis.
Councilman Love – The best deal is if someone else owns it and mows it and pays us [the city] [real estate] tax.
Michael Corrigan– If you did 10% of them that were turned back into viable pieces of property, the real state taxes on that 10% should be enough to pay for the mowing on the rest of them.
Karen Bowling – …Meanwhile we are investigating an idea whether it’s through the summer jobs program, through JSEP or through Economic Development - to identify people who need work, and teach them how to set up a landscaping business, and hire them to take care of some of these properties so that we are teaching them and getting the job done at the same time. We are still doing some work on that…
Councilman love – Our next step is to find out who owns the property…
Michael Love – It’s going to be outstanding taxes and some of these have expired A few years so I can adjust that for you– referring to the handout. You may see some of these properties purchased by the neighbors and the property back on the tax roll… The problem you’re going to have is [that] the nuisance claims are so high and no one will buy them. The nuisance liens don’t go away.
Page Johnston – The nuisance claims can be reduced significantly… you can settle those for pennies on the dollar.
Kimberly Scott of municipal code compliance arrived to attend the meeting at approximately 20 minutes after 10 AM.
Kimberly Scott – the city could actually there is something in 122 or one of the ordinance chapters that would allow the city to waive those liens if it’s for affordable housing. The definition of affordable housing exists under HUD. So municipal liens can be handled. Now the administrative liens under 162 of Florida statutes which are a penalty levied by a special magistrate or hearing officer for outstanding property violations. The appeal method goes to Circuit Court. That is why the city can’t just cancel those liens. But nuisance abatement and demolition liens are authorized by property safety and maintenance code that is enforced by code enforcement and that takes into account in that code the Department of Finance in the city and perhaps the real estate officer can cancel those liens for a particular reason. It has been done in the past between 1997 and 2004. There was a batch foreclosure process where the city obtained properties and they forgave the nuisance and demolition liens, the administrative liens or handled differently, and - possibly not handled properly - being honest. In those instances, nonprofits would have to pay the delinquent taxes, and in 2000 for the only nonprofit approved to take part in the program they could not pay the bill like when taxes after the city foreclosed on the properties. So they allowed the city to initiate the foreclosure process knowing that they did not have the money for the delinquent taxes and it led to a major problem, so the whole process stopped…
Kevin Kuzel - So, when a nuisance owner gets to the magistrate level, when that happens - is that all State…?
Kimberly Scott - No. Certain types of violations go to a special magistrate. Zoning and more serious violations would go to a magistrate. The magistrate would give them an order to correct which would go out 30 days up to 180 days. If the owner fails to comply, it would go back to the special magistrate who would most likely issue a fine. If the magistrate feels it is a work in progress they may extend the time period. Fines could be up to $250 per day as long as the violation(s) remain(s).
Michael Corrigan – …If a property becomes vacant do you still have that responsibility? It would be helpful for me and the councilman if we knew which one of these 50 properties Head in administratively lean. If we knew that we would be down to 20 or 30 easy ones where the city owns all the certificates and those would be the ones for the city to go after. The others would probably have administrative liens or private investors and would probably be more trouble to take care of.
Kimberly Scott – There’re some states that are starting to handle those types of issues - things are more difficult where they have to go to the state level instead of the city level. I was asked by Karen Bowling to provide some creative solutions tomorrow at the Stand Up for Your Neighborhood Committee meeting… there is no one solution for these problems. The administrative liens, we have only started tracking those in-house since 2007. The reason being is the special magistrate does the order and it is recorded in the Circuit Court. And then on those liens there is no dollar amount. But we can provide information on those liens. Brian may have already done that. I will give this to him. We should be able to get the information to you within a week.
Michael Corrigan – John, if you’re willing to be the custodian, we’ll send the information and Kim will [also] send the information… I think you will find a lot of them will have multiple issues. If the city owns all the certificates it’s relatively easy for the city to take care of it.
Councilman Love – So, You are going to send information on who owes what tax liens? And – you are going to have to get that from…?
Kimberly Scott– We can get that in-house. Because we do that research, code enforcement houses the administrative offices for the special magistrate. Any agency that has an enforcement activity can use the office of the special magistrate. When it comes to historic buildings, there is one person, Martin Canelli and he works in Planning. He is encouraged by the OGC attorneys to attend the special magistrate hearings. So they utilize the process for a few properties every few months, but is overwhelmingly use by municipal code compliance.
Kevin Kuzel - Okay, who is going to do what?
Councilman Love - Michael Love is going to figure out who owns the tax liens, and get that information to John Jones in electronic format. Kimberly Scott is going to decide who has administrative liens. And then from that, we will [know the ones] without administrative liens and only city held tax liens and that would be the group that we might be able to batch or close.
Kimberly Scott – Your nuisance and demolition liens are already written into ordinance – All of this is going to be affordable housing I would assume. It is the administrative liens that are the problem, because of it being something authorized by Florida statutes.
CM Love – When you say “affordable housing” - they are vacant lots.
Kimberly Scott – can you make sure through Housing that it would meet criteria for… there is no house there, if they intend to build housing there. Talk to Darrell [Griffin] because he is close to that process… I am the only one left in [city] government that was part of this process.
Sandra Stockwell – …and there is a way to do those batch foreclosures so that you can come out with good title. There is something you can do to make the title marketable…
CM Love - on that’s what we want to do because the ultimate goal is to have a nice looking piece of property that’s on the tax rolls.