The city is bundling more than 100 abandoned properties to auction off at a special tax sale that officials estimate will bring in approximately $3 million in revenue to municipal coffers.
The special tax sale of abandoned properties is unlike anything that has been held anywhere in New Jersey, according to city law director Domenick Stampone. He said the sale is being conducted in accordance with the Abandoned Property Rehabilitation Act. “We’d be the first city to utilize this statute in New Jersey,” he said.
Stampone said the special tax sale is very different from a typical tax sale that many municipalities hold. He said a developer who purchases a tax sale certificate through the auction will be able to rapidly foreclose on the home rather than wait years before obtaining possession of the deed.
Some of the properties on the list have been off the city’s tax rolls for the past five to seven years, according to officials. Mayor Jose “Joey” Torres told a skeptical city council on Tuesday evening his administration intends to raise revenue and diminish the large sum of money the city sets aside for uncollected taxes.
Torres said the sale is part of his neighborhood stabilization program. At least three speakers opposed Torres’ plan to bundle and deliver the properties to developers.
Michael Jackson, 1st Ward councilman, who voted against the measure to hold the tax sale, wanted neighborhood residents to get opportunities to take over some of the properties. He opposed allowing outside developers to come into the city to develop the properties.
Kenneth Morris, councilman at-large, said the concept of selling a bunch of properties to developers sound eerily similar failed program Torres ran in the past. “This does have the overtone of what we did many years ago,” he said.
Torres said in 2004 and 2006 the city undertook a similar program to rehabilitate blighted properties in some of the city’s run down neighborhoods. “We didn’t have all the success we anticipated,” said Torres of past efforts.
The new program will require developers to enter into agreements with the city and show they have the means to fix up the property. A deed restriction will prevent the property from being flipped by profiteering developers, said Torres.
The properties are a mix bundle of good and bad, said Torres. “I don’t see good and bad,” said Julio Tavarez, 5th War councilman. Tavarez said he did not see a property from the 2nd and 4th Wards being bundled into a package.
Torres said the bundling is done based on proximity and within a political district. Tavarez worried developers may buy a bundle and undertake rehabilitation at certain properties while ignoring others.
Tavarez wanted a clause that would penalize developers if they decided to develop some and leave others.
“I was really looking for more homeownership,” said Ruby Cotton, 4th Ward councilwoman. She said promoting homeownership builds neighborhoods.
Jackson and Cotton voted against the measure while Mohammed Akhtaruzzaman, 2nd Ward councilman abstained.
Two council members – Tavarez and Andre Sayegh, 6th Ward councilman, often highly critical of Torres voted in favor of the measure.
Morris pointed out the council has many times called on the administration to find new sources of revenue. He said this was another source of revenue other than increasing taxes on property owner.
“I had great reservations,” said Sayegh who wondered whether the city could raise the anticipated $3 million. “We got to generate revenue somehow.”
The city will hire an outside firm that will take 10-percent buyer’s premium from the developers to conduct the tax sale of the 102 properties, said officials. The sale is scheduled for January 22nd, 2016.
“This looks like something that might work,” added Tavarez.