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The City of Rochester is thinking twice about selling its tax liens to an outside company.

Since 2009, the city has been selling its liens in bulk to American Tax Funding. The idea is to get the city more money than it could collect on its own and let another company worry about collections and sale of the properties. The city did keep some of the properties for targeted development.

Since 2009, the city has sold 20,948 liens to ATF and collected nearly $21 million. The city was paid between 43 and 49 cents on the dollar. Since ATF took over, the city’s delinquency collection rate has risen from 44 to 55 percent.

The city is now looking for a consultant to assess how it’s going and offer alternatives. There have been complaints from neighborhood groups the ATF-owned properties are languishing. The vacant houses are in limbo too long, they say. In addition, some property owners are not happy with ATF’s payment plans. It’s possible the consultant will recommend the city continue its relationship with ATF.

Those types of complaints led Syracuse to stop doing business with ATF, which strongly denied it let properties languish. The Post-Standard reported last year:

The company sells some properties over the Internet to buyers as far away as Germany, who may or may not be prepared to address the building code violations, old water bills or additional unpaid taxes that come with the houses, city officials say.

In other cases, ATF has allowed abandoned properties to languish and fall further into disrepair because the houses have minimal value and would be difficult for the company to sell, said Tom Babilon, an assistant corporation counsel (in Syracuse).

“Vacant and substandard housing is one of the priority issues that we are trying to remediate,” Mayor Stephanie Miner said. “And ATF has not helped us redevelop or renovate our neighborhoods and our housing stock at all.”

Marini, the CEO of American Tax Funding, said the company owns $100 million worth of tax liens all across the country. Syracuse is the only city that has picked a fight with his company, and he’s not sure why.

ATF’s profit motive gives it a strong incentive to improve conditions in neighborhoods where it owns liens and properties, because that helps boost the value of company assets, he said.

“How would ATF gain by allowing these properties to languish?” he asked. “A blighted neighborhood impacts us as badly as it does everyone else.”

That article quoted Rochester officials saying they’re happy with ATF. But since then, neighborhood groups have gotten more vocal about ATF-controlled properties. The entire situation shows how difficult it is for declining cities to deal with abandoned properties and homeowners struggling to make payments.

Links of the Day:

– Now, the other side. The fired boss of the crime lab filed a notice to sue. It’s full of details that make Maggie Brooks, Mike Green and Sandra Doorley look bad.

– The candidates for the 27th District congressional seat are from Erie County, but the district stretches to Canandaigua. Residents of small towns want to know what Chris Collins and Kathy Hochul will do for them.

Half of all jobs in the United States pay less than $35,000.

– The pink slime scare was a hallmark of bad, sensational reporting.

– The post-goal celebrations of Abby Wambach and company are annoying opponents.

– Given what we now know about football’s impact on players, can the sport be fixed?

10 Responses to City Rethinking Tax Lien Sales

  1. August 5, 2012 at 12:38 pm James Simons responds:

    The NPR article hits the nail on the head. This country is facing a big problem. The jobs that are being created are not sustainable for families. As the Rochester area continues to laud and heap tax dollars on call centers, they fail to realize that these jobs simply add to the working poor. While these workers might not fall below the poverty line, they do live close to it. They pay an overly high percentage of their income for rent and utilities. Everyone says college is the answer, and I agree that in many ways it is. However, with the costs of higher education soaring it adds another layer to the problem. Those seeking to better their life must take on massive student loan debt which will cripple them financially even once they have achieved a better job status.

  2. The passage of the long-sought New York landbanking law last year — which a prominent national land bank expert considers the “gold standard” for state land bank programs — gives New York municipalities with vacant property problems a good opportunity to step back and look at alternatives to auctions of properties with tax liens. Under the new legislation, Buffalo & Erie County, and Syracuse & Onondaga County established land banks this year, and Rochester should consider doing the same. The existence now in Syracuse of that credible alternative to property auctions may be one of the reasons that city is now speaking out against the company that is auctioning property with unpaid liens.

    Mayor Miner’s comments are telling. Relying on auctions as the primary tool for handling property with uncollectable tax liens is inherently deficient — yielding just the kinds of results that Syracuse leaders say they neither want nor like. And that may be the case regardless of who handles the auctions — the City, County, or an outside contractor like ATF.

    For more on the inherent problems with auctions, and why land banks present a better alternative in many cases, may I humbly recommend my recent cover story in Buffalo’s alt-weekly, Artvoice: http://artvoice.com/issues/v11n24/cover_story

    Auctioning distressed properties to the highest bidder seems, at first glance, both fairest and revenue-maximizing. But as the great observations from Syracuse leaders quoted above suggest, the cycle that all too often results is properties churning through the system, losing value and increasing blight each time through. Eventually, a property becomes so dilapidated and devalued that, for safety and/or economic reasons, there is no alternative to demolition. A property in that downward spiral can blight a block, and a block can blight a neighborhood.

    Syracuse is both right and smart to re-evaluate their arrangement with ATF. You’ll find lots of folks in Rochester who would love to follow their lead.

  3. August 5, 2012 at 6:35 pm theodore kumlander responds:

    i am not surprised maggie brooks fired JAS, from what i read in the news she was running the crime lab professionally and not a tool of the DAs office. saggy maggie should have stayed out of this one.

  4. american tax funding has paid 3 different persons ..i have an order protection for 2 years to BULLY THREATen,KICK IN my doors at MIDNIGHT at our home..on west avenue 2 times..regardless of the order protection.. they have FORCED me to give them this commerical property at 395 maple street and our home at 279 west avenue REFUSED all arrangements to take propretys they will get a fight if that what it take see them in court soon and all involved. we are going to still put this HOMELESS SHELTER and non violent program in this building on maple, regardless..and the 45 cent on the dollar you paid on a 45 thousand lien is half…not 65 thousands plus your fees.. and same on west ave 12 thousands owed @ 43 cent =6 thopusands NOT …NOT 21,000..owed..RESPECT COURT order protections,that the law…and CONSPRIacy is a serious family problem and threats at our home ..this has several police reports all year long from previous investors BULLY VIOLent Situations over and several break ins and DAMAGES and taken items… see you in court soon…

  5. stop taking our seniors homes..after all these years there..for taxes to American tax funding/reoco/atlantic ventures for commercial valu properties worth lots of money,that why..395 maple street in roch.value over 550k said sold to friends 10k ..but refused 65k on agreement from me ow ed 40k anyways not 65k…paid 43 cent on the dollar to the city of roch to buy lien… m notust pay in full on west ave 20k

  6. in 2013 .the name on deeds ta 395 maple street roch ny is still CITY OF ANGELS/V HENRY NOT reoco UNTIL MAY 2014 FORCED OUT ..bully out…after Completely DESTROYED INSIDE..by paid assailant by American tax funding to run us out to RECOVER the property with no mortgage ..only taxes ,,REFUSED to let us Make ANY agreements..They said ,SOMEONE ALREADY said they WANTED THIS PROPERTY..sold already..in 2013..craig corey,scott scherberger,timothy altier,said now new owners ..no more BREAK INS.. new owners..deed changed may 2014 to REOCO/Atlantic ventures…also is AMERICAN TAX FUNDING…THEMSELVES…for 10,000 dollars..sold to THEMSELVES… RIPPED US OFFF FROM OUR HOMELESS SHELTER AND YOUTH CENTER..we need so badly..we got no HELP even from our mayor lovely warren,or cith council,talked with laretta scott several times no help..totally ignored..

  7. anerican tax funding /reoco has changed AGAIN another deed for 100. dollars to themselves to keep from making ANY REASONable AGREEMENTS to keep our home at 279n west ave roch ny just like they did on 395 maple street roch ny to THEMSELVES ..any properties worth some value to resell RE-SELL again FAST>>> call virginia henry 585 351 7637 and others at TAKE BACK THE LAND heree in rochester ny the mayor is NO HELP ,NO EMPIRE JUSTICE all said no ,its a mess…and city council loretta scott said..what can i do… that all..i petition the mayor with signatures..i hope it can help me and others ..we are the people..i think…

  8. they might have to make a sedrious arrest AGAIN..AFTER BEING THROWN TO THE GROUND BEFORE AT 5-11 Appleton street .that last ILLEGAL EVICTION. july 2011..Mayor did NOTHING ,a cover up for police,what really did happen that day in my TRESSPASSING yard,i lived there since 2008 and rehab ,fannie mae said in writing at the time they had NOTHING to do with EITHER property…. I got 5 storages ,900 dollars a month for ever was left from our home <NOT TAKEN..ROBBERy ..NO INVENTORY taken 20 rooms.one family changed from4 family.. then we got AMERICAN tax funding /REOCO are REAL THIEVES..MAKE NO ARRANGES with people to gain control and DEEDs ,transferred to REOCO..to RESELL…RESELL sap. or sold to THEMSELVES.. fron 10 dollars to 100 dollars; 395 maple street ,,commercial to REOCO for 10000 then TRANFERRED IMMEDIATELY to their subsid. to atlantiv ventures..these are the people I have an ORDER PROTECTION to 2017..we have to stop them….

  9. we know the city contract only can charge the same in terest and same fees..How did the 279 west avenue property once o owed from ..8 thousandswed/purchased at 43 cent to the dollar…from city of Rochester ny 8 thousands..in daily record now 20 thousands …now to re gain property..now 38,800 dollars ..MUST PAY IN FULL IN 2 weeks or sold to themselves REOCO for ONLY…100…. one hundred dollars. on oct,15 2015…now trying to evict..even after city of Rochester also had me pay 3880. dollars a few months ago on the same taxes..and 610 dollars and 1440. dollars and other arrears water bills over 1,000 dollars and still continued to foreclose to REOCO..no mortgage ,,and REFUSED ALL AND ANY AGREEMENTS..from 4 differents attorneys..said no no…

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