Pittsfield tax lien auction hauls in $667,000; $1.2 million paid in beforehand
Photo Gallery | City of Pittsfield holds tax lien auction
PITTSFIELD — The city held its first property tax lien auction on Monday afternoon, hauling in approximately $667,000 in revenue from seven successful bidders — some of whom acquired multiple property liens.
The amount realized was in addition to the more than $1.2 million in overdue tax bill payments made since the auction was announced in early March.
“Absolutely,” city Finance Director and Treasurer Susan Carmel said following the rapid-fire 55-minute auction, when asked if she was pleased with the outcome. “And we had [property owners] coming in right up to minutes before to make payments.”
Strategic Auction Alliance of Braintree, which conducted the session at City Council chambers at City Hall and online, offered 106 residential, commercial or industrial properties, including some open lots or parcels, to about a dozen registered bidders. Registering to bid required a $15,000 deposit and bidders were either present in the room or participating online.
Tom Weitbrecht, who with Stephen Paulin oversaw the bidding for Strategic Auction on behalf of the city, said Pittsfield officials initially listed 329 properties, on which some $10 million in total was owed. Much of that amount dated back two or three decades and included significant interest on many of the tax bills.
He said that, in addition to the numerous property owners who came to the treasurer’s office to pay off their bills or enter into a payment plan, some other properties were left off the auction list because of their unlikely appeal to potential bidders.
Some properties had title issues, Weitbrecht said, or offered “negative equity” in terms of the amount of back taxes owed versus the prospects for an investor to make a profit after expenses. The minimum figure to start the bidding was the amount owed in back taxes and interest, and while some were below $1,000, others were higher than $50,000, and a number of properties offered were passed over by the auctioneers after failing to prompt the minimum bid.
The top successful bidders Monday were Tallage Adams, LLC, of Boston, acquiring 36 liens for a total of $486,000, and Robert Lore of Canton, five liens for a total of $73,500.
The highest amount owed prior to the auction was more than $700,000, while more than $100,000 was owed by several other properties on the pre-auction list — originally posted on the city’s website at www. cityofpittsfield.org in March.
As to what an investor will try to do with the property, Weitbrecht said that varies depending on the bidder. Unlike with a real estate sale, the city for the first time was auctioning the tax liens it holds on the properties. The successful bidders can then go to court to foreclose on the property, or seek to collect the amounts owed and receive an interest fee if owners redeem the property.
The attractiveness of this type of auction, Mayor Daniel L. Bianchi said prior to the event, is that the city does not have to spend the time or endure the expense to foreclose on the properties or undertake the related expenses to sell the property at auction. Typically, many owners come in before the auction to settle their bill or submit a down payment of 25 percent and enter into a payment plan with the city.
Strategic Auction has conducted similar auctions for Quincy and Weymouth, and Weitbrecht said the option is becoming popular with both cities and towns. A 2004 provision in Massachusetts General Law allows municipalities to assign liens to an investor for the full redemption price.