Banking & Finance and Government

County auction process pays off bigtime

Treasurer reports tax collections are current, and hotels are seeing revenue growth

October 15, 2012
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The Kent County Treasurer’s office recently completed its most successful auction of tax-foreclosed properties in recent memory and was able to collect more than enough revenue from the two public sales to cover the office’s expense of buying the delinquent properties from the cities and townships.

“It certainly is the best one in the last four or five years. I don’t have all the numbers in front of me, but it could very well be the best total sales since we’ve been doing the property auctions,” said Kent County Treasurer Kenneth Parrish.

The second sale, known as the scavenger auction because all minimum bids begin at $1, was held earlier this month. Almost all of the 101 properties that went unsold at the initial auction in August were sold Oct. 5.

“Of that 101, we sold 92,” said Parrish. The sale of those properties brought the county about $360,000 in revenue.

The first sale in August netted $1.6 million, and a sale of 43 properties to the Kent County Land Bank Authority in July deposited $420,000 into the office’s account. Adding those revenue numbers to the $360,000 earned at the second sale and the total receipts from the tax-foreclosed properties come to nearly $2.4 million. The county needed $1.9 million to cover its expenses.

“We were actually made whole after the first auction with the combination of the land-bank purchase,” said Parrish, who also chairs the KCLBA.

In all, 309 properties were listed for sale when the process began and now only nine are left in the tax-foreclosed inventory. Parrish said his office will inform the respective municipalities of the remaining properties and give them a chance to reclaim those. Each governmental unit the county contacts has to formally decide whether to accept or not accept the properties.

“If they don’t accept, then these stay with me. We’ll do an evaluation of each property to figure out what we can do with it. Sometimes it’s little slivers of land between two other parcels and sometimes we can convince one of the adjoining owners to take it for $1. Things like that,” he said, while adding that some might be transferred to the land bank.

Parrish also said property-tax collections were going pretty well. He told members of the county’s Legislative Committee last week that his office has collected all of the eligible taxes for the past few years and plans to do so again this year. Parrish explained that eligible taxes are those that aren’t tied up in a bankruptcy proceeding or being withheld from the county for other reasons.

“We’re receiving a larger amount than expected. While the economy is improving, there still is a lag. Some people are making partial payments to avoid (tax) foreclosure,” he said.

The office has processed more than 25,800 tax receipts in each of the last two years, and two it recently caught up with came from a pair of hotels on 28th Street.

Operators of the Crowne Plaza Hotel and The Ramada Plaza were reportedly $270,000 behind in their lodging-excise tax payments, a 5 percent county levy operators tack on to their guests’ bills. But Parrish said both matters have been resolved. The Crowne Plaza has paid in full and The Ramada Plaza has agreed to a monthly payment plan.

“I believe they owe us $75,000. They should be caught up in four or five months,” he said.

Parrish said he has two full-time auditors that track lodging-excise tax payments. They annually audit about 22 of the county’s 85 hotels and motels each year.

“They’re out in the field about 90 to 95 percent of the time,” he said. “The hotels seem to be having a good year this year. Most of the hotels are seeing revenue growth.”

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