At the Town of Cortlandt’s tax-foreclosure sale last week, $1,000 was the high bid for a single-family house on 1.7 acres at 55 Cortlandt Ave., which the town assessor values at $294,000. A two-family at 280 Bleakley Ave., valued by the town at $193,000, went for just $60,000.
So it goes in a town where getting top dollar for town-owned property is not a priority. Cortlandt officials declared last week’s auction a success because the bids on six houses and four vacant lots came to the grand total of $236,500 — more than enough to recompense the town for $176,000 in back taxes.
“Our point is not to make money on these properties,” said Town Board member Richard Becker. “Our point is to sell the houses, get them back on the tax rolls, and make sure we don’t have a loss. We aren’t in the real estate business.”
That was obvious from the lackluster efforts taken by the town to promote its July 15 auction. The auction was advertised for three weeks in a local weekly, without mention of the address of the homes for sale, which you could obtain by paying $5 to the town clerk.
Then, on the day before the sale, the town posted notice of the sale on its website and Facebook page.
That was fine with Town Board member Frank Farrell, who said the town should not aggressively market property obtained for nonpayment of taxes. He didn’t want to upset the delinquent Cortlandt residents, whose taxes to Westchester County and local school districts had been fronted by other town taxpayers since 2011.
Getting top dollar for foreclosed property not a town priority. (Video by David McKay Wilson/The Journal News)
Video by David McKay Wilson/The Journal News
Farrell said he didn’t want to “add to the suffering by somebody who was in a situation by no fault of their own. It’s not to spare their feelings, but to treat somebody who is a neighbor with dignity and respect. I don’t see it as the role of the town to capitalize on someone’s misfortune.”
When Farrell made a similar remark at Tuesday’s Town Board meeting, town Supervisor Linda Puglisi, chimed in: “That’s a very good point. We are compassionate.”
The town’s compassion for its scofflaws could prove a windfall to the handful of real-estate speculators who caught wind of the auction and had winning bids — to be approved by the Town Board on Aug. 12 — that appeared far below market value.
The prices were so low that Westchester County is considering exercising its right of first refusal on two of the foreclosed homes detailed by Tax Watch last week, to fulfill the requirements of the federal fair-housing lawsuit, said county spokesman Ned McCormack.
Cortlandt resident Dan Pagano and Tarrytown real estate attorney David Wilkes said selling the houses for so little could run afoul of the state constitution, which prohibits municipalities from proffering gifts to taxpayers. The low bids on six homes came to $175,500. Town assessment records peg their collective value at $1.3 million.
“Town officials don’t seem to have any qualms about selling the property for a little more than 10 cents on the dollar,” said Pagano. “Their job is not to squander away public property.”
Town Attorney Tom Wood said it would only be considered a gift if the town gave it away for nothing.
“Gift of public property is if you give no consideration at all,” he said.
While state law does not require that an auction be advertised, other municipalities do so to cast a wide net, in search of maximum return for taxpayers. Putnam in 2013 listed 15 properties with four local real estate agents, who marketed them through the Multiple Listing Service for a 5 percent fee. A year later, six houses had sold, for a total of $401,000. Putnam received $121,000 more for two vacant lots, Assistant County Attorney Andrew Negro said.
In White Plains, the city hired an appraiser in 2013 to determine what a rundown house was worth, which became the minimum bid of $225,000. The house sold for $240,000, said Corporation Counsel John Callahan.
Mount Vernon, which plans to hold a sale of about 20 properties in late August, will publicize the sale on its website, advertise in newspapers, and host open-house tours over three days before the sale.
Ossining on Aug. 13 will auction several building lots and a burned-out house at 94 State St. Receiver of Taxes Gloria Fried developed a website to promote the sale, where you can see the property and obtain information about the auction. During its first week online, more than 100 prospective buyers downloaded information.
Fried recalls the town’s 2006 sale of a condominium for which 37 bidders competed. The back taxes were about $30,000. The condo sold for $291,000.
“It’s a town asset, and you want to get as much as you can for the taxpayers,” she said. “You do that by making the sale known to the widest possible audience.”
Twitter: @davidmckay415