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City buys homes, properties seized by county

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published August 5, 2015


ST. CLAIR SHORES — The city of St. Clair Shores agreed to purchase five homes and seven vacant lots — including a lakefront piece of property — from the Macomb County Treasurer’s Office as part of a group of properties seized by the county for back taxes.

This year’s group, larger than the 2014 batch, cost the city $117,510.44.

The money paid to the county accounted for the back taxes owed on the properties. In past years, there have been more than 20 properties included in the group offered by the Macomb County Treasurer’s Office. The city has to take either all or none of the properties and cannot inspect their interiors beforehand. It has purchased the tax foreclosure properties from the county each year since 2009.

Out of the five homes, at least one may be demolished, said Community Development and Inspection Director Chris Rayes. The homes are on Avon, Edgewater, Glen Court, Maple and Maxine streets.

The seven vacant lots vary in size from 50-by-93 feet on Glen Court to 90-by-414 feet on Jefferson Avenue. The city paid $42,494.81 for that largest lot.

Since city ordinance requires at least a 100-foot frontage on the lake, Rayes said the property can’t be split into two 45-foot lots when it is sold.

“This ... former house, the occupants were indicted for health care fraud. The U.S. Attorney’s Office had interest against the property (but has dropped the interest),” Rayes said. “It will come to us free and clear of any interest other than the debt owed.”

City Councilman Chris Vitale, Councilman Anthony Tiseo, City Manager Mike Smith, Mayor Kip Walby and Rayes are all members of the tax foreclosure committee and evaluate each home the city purchases through the program.

“We’ll walk through the homes and do an assessment of what we think they need,” Vitale said after the vote. “What’s needed not to just bring the house up to code, but maybe a little beyond that.”

In addition to paint, new floors and other needed repairs, sometimes the city even makes changes to a home to make it more marketable, Vitale said, as is the case in a home being renovated on Playview, where the city decided to move walls to make larger bathrooms. He gave credit to Rayes for having vision where the home renovations are concerned.

“(Rayes) has some very good ideas in terms of, ‘You know what we could do,’” Vitale said. “We’re staying within the footprint of the home (but) come up with a much more attractive and, therefore, much more valuable home.”

On average, the city has come out ahead on the projects, selling many of the homes for more than the taxes paid. From July 1, 2009, through June 30, 2015, the city has had a net gain of $793,398 on properties purchased and later resold. The city currently has $320,887 invested in properties it is holding for resale, according to information provided by Vitale.

Both Vitale and Tiseo said that the neighbors appreciate the work the city is doing to update and remove obsolete homes.

“It’s been a great program, cleaned up neighborhoods and, quite honestly, it’s minimized rentals,” Tiseo said after the meeting. “These houses become, in my opinion, too expensive for a renter to buy and turn over.”

The improved homes have helped raise property values in some neighborhoods, and Tiseo said the homes they do have to demolish, as well as the vacant properties, provide an opportunity for new houses to be built in St. Clair Shores.

“We’ve got a number of houses going up,” he said. “It’s been a positive program from start to finish. When there’s no property available to do anything new, this is the closest thing we have.”

At the July 20 City Council meeting, Councilwoman Candice Rusie pointed out that if the city passed on purchasing the properties from the county, there could be consequences.

“The county will put these up for auction, and if they sell for less than what’s owed to the county, then the city has to pay for it and we won’t get the property,” she said.

Rayes explained that even if the properties were to sell for more than the amount of back taxes owed, the city wouldn’t receive the excess money — that money would also go to the county.

By rehabilitating and selling the homes and properties, the city is able to keep the money. In his memo to City Council on July 20, Rayes wrote that in this batch of homes and properties, it was also expected that some of the homes had value and, when sold, would help offset the cost of acquisition.