Public property auction a big success
Criticism that the county’s sale of 43 tax-foreclosed properties to the Kent County Land Bank Authority prior to the public auction would frustrate private investors and limit the annual sale’s receipts proved to be unwarranted.
“It was one of the most successful sales ever held,” said Dave Allen, KCLBA executive director, of the Aug. 16 auction.
Bidders bought a record 160 of the 309 properties that were up for auction. The Treasurer’s sale netted the county more than $1.6 million.
The county needed to get $1.9 million from the auction to cover its expenses for buying the foreclosed properties from the cities and townships. With the $1.6 million from the sale and the $420,000 KCLBA paid the county for the parcels it bought, the total receipts topped the county’s monetary goal and the investment the county made in the auction.
“That means the county is up by $120,000,” said Commissioner Stan Ponstein, who also serves on the KCLBA board.
The sales receipts also met the county’s overall goal for the auction.
“The purpose of the tax sale isn’t to promote private enterprise. It’s to make the county whole,” said Commission Chairwoman Sandi Frost Parrish when she established a subcommittee recently to review the county’s process for selling properties.
The county will add to that $2 million take as the remaining 149 properties will be auctioned Oct. 5 at the second sale, which doesn’t have a minimum-bid requirement. The sale will be held at DeVos Place. Registration begins at 11 a.m., with the auction starting at noon.
Allen told the land bank board the demolition work at the former Sparta Foundry site was nearing completion and environmental testing had begun and is expected to be finished in late October. He also said representatives from the unnamed European manufacturer interested in buying the four-acre site are expected to be here this week to meet with The Right Place Inc. and township officials.
KCLBA took possession of the property at 252 Garner St. in Sparta Township last winter and has directed the cleanup and promoted its sale.
“We’re close to finalizing everything, but the due diligence on a $30 million investment doesn’t move very quickly,” Allen said last week.
In another development, Allen said Cedar Springs’ officials have asked the land bank to take the deed to 95 N. Main St., a blighted downtown two-story building that is filled with asbestos and lead paint. The property also includes an underground storage tank believed to contain petroleum products. Cedar Springs doesn’t have the funds to remediate the property and the city doesn’t qualify for a brownfield designation, but the land bank can secure that status for the half-acre site.
“It’s a big property in the city’s downtown. It’s a commercial property with a two-story building,” said Jeff Edwards of SME Environmental, an engineering firm that does a lot of remediation work.
He said the building has been a hotel, an IGA grocery store and an auto repair and parts store. SME has secured a grant from the U.S. Environmental Protection Agency for the city that can be used to help clean up the property.
“Demolition or renovation will follow,” said Edwards.
Allen said the property is just north of a greenspace and a creek. He said a brew pub is interested in the site.
“The value of it right now is the land. We’ll have to see what we have to sell or what is left,” said Scott Nowakowski of Northstar Commercial Real Estate. “There is a contiguous piece of land that would be significant for parking.”
Edwards said his firm has identified potential funding sources for the project if KCLBA takes title to it.
“We’d be deeded the property,” said Allen. “All I’m asking the board to do is let the land bank take title, but Cedar Springs has the right to buy it back.”
Allen told the board he would come back with more information on the project and a budget for the work.
“One of the benefits for us being out there is we can clear the title,” said Ponstein.
Board members agreed last week to accept a $350,000 line of credit Founders Bank and Trust offered the land bank. Allen said the money would be used to rehabilitate 11 tax-foreclosed homes the land bank bought from the county.
“I have a lot of confidence in Founders in their commitment to the community,” said Sharon Brinks, Kentwood city commissioner and board member. In return for the financing, Allen said the land bank will grant Founders a lien on the mortgages.
Allen said three local banks have agreed to donate their mortgage-foreclosed properties to the land bank when the fair market value of those parcels is less than $25,000.
“Our phone is ringing off the hook,” he said of the calls he has received from buyers interested in properties the land bank owns. “One of our properties on Crescent Street (in Grand Rapids) had seven showings today.”