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HomeMy WebLinkAboutIR 8392 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8392 ror , To the Mayor and Members of the City Council April 2, 2002 Page I of 5 SUBJECT: Sales Guidelines for the Conveyance of Tax Foreclosure Properties and Establishment of Comprehensive Land Banking Guidelines Purpose The purpose of this informal report is to review current guidelines for the sale of tax foreclosed and surplus properties and to recommend specific guidelines for future sales. The informal report also provides recommendations for establishing comprehensive land banking guidelines to support the Strategic Goals of the City Council and ongoing City Commercial Corridor initiatives. Current Sales Guidelines Historically the City of Fort Worth has used sealed bid sales as the primary means of conveying tax foreclosed property. The properties are advertised in a newspaper of general circulation, bids are received and opened publicly. The property is then typically sold to the highest bidder. State law also allows municipalities to dispose of tax-foreclosed property using a direct sale method. The notice and bidding requirements do not apply in a direct sale scenario. In Fort Worth, with the exception of direct sales to non-profit organizations that provide low/moderate income housing, direct ir "lles have been used as an exception to the sealed bid sales process. Recommended Sales Guidelines In order to meet several of the long-range strategic goals of the City Council, staff recommends that more comprehensive combination of direct sales and sealed bid sale methods be utilized for the following types of conveyances: Sales to Non-Profits for Low/Moderate Income Housing Initiatives City Ordinance Number 13533 (G-12284) approved by City Council on July 28, 1998, provides that the City of Fort Worth may sell properties to qualified nonprofit organizations without competitive bids for less than the judgment amount or the fair market value as specified in the tax foreclosure lawsuit judgment. This ordinance has encouraged the development of affordable housing by non-profit agencies and facilitated the movement of vacant properties back onto the tax rolls with the addition of new improvements. Sales to Religious Organizations Section 253.010 of the Texas Property Tax Code provides that the City may sell land directly to a religious organization that (a) owns other property located in the municipality that is exempt from taxation...and (b) has entered into a written agreement with the municipality regarding the revitalization of the property. Staff recommends that direct sales to religious organizations be conducted as provided in Section 253.010 of the Texas Local Government Code. Sales to Further Urban/ Economic Development Initiatives ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8392 Irr " To the Mayor and Members of the City Council April 2, 2002 Page 2 of 5 SUBJECT: Sales Guidelines for the Conveyance of Tax Foreclosure Properties and Establishment of Comprehensive Land Banking Guidelines Section 34.051 of the Texas Property Tax Code allows the resale of tax-foreclosed property for the purposes of Urban Development. If the property is sold for the lesser of: (1) the market value specified in the judgment of foreclosure; or (2) the total amount of the judgments against the property, the consent of each affected taxing entity is not required. However if the fair market value is less than either of the amounts outlined above, then the City can sell the property for fair market value with the consent of the other taxing entities. The interlocal agreements with the other taxing entities will contain all the elements or statements required by State law. Sales to Abutting Property Owners Direct sales to abutting property owners are allowed under Texas Local Government Code 272.001. The code provides that fair market value is determined by an appraisal obtained by the City. The direct sale of property to abutting property owners is appropriate when: 1. There are narrow strips of land, or land that because of its shape, lack of access to public roads, or small area cannot be developed independently under its current zoning or under applicable subdivision or other development control ordinances; 2. Streets or alleys, owned in fee or used as easements; and 3. Land, which was originally acquired for streets, rights-of-way, or easements, has been Staff recommends that direct sales to abutting property owners be authorized as allowed under Texas Local Government Code Section 272.001 and as outlined above. Sales to Foundations or Governmental Entity ' In addition, Texas Local Government Code, Section 272 (b) allows for direct sales for fair market value for the following situations, with fair market value being established by an independent appraisal: 1. The property involves land that the City wants to have developed by contract with an independent foundation; or 2. The property is being conveyed to another governmental entity that has the power of eminent domain. Staff recommends that direct sales be authorized as allowed under Texas Local Government Code, Section 272(b) and as outlined above. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8392 To the Mayor and Members of the City Council April 2, 2002 Page 3 of 5 SUBJECT: Sales Guidelines for the Conveyance of Tax Foreclosure Properties and Establ-ishment of Comprehensive Land Banking Guidelines Sealed Bid Sales All remaining properties that do not fall into any of the above outlined categories will be targeted for sale through regular sealed bid sales within 6 months of the City receiving custody. Establishment of Comprehensive Land Banking Program Guidelines The City Council authorized the Leland Consulting Group'to develop specific recommendations for the development of urban villages within various corridors of the City. One of the recommendations of the Leland Consulting Group was to establish an interdepartmental committee to draft and enforce policies, which encourage land assemblage in the central city. An interdepartmental committee has been established under the direction of the City Manager. This interdepartmental committee has evaluated the need for a comprehensive Land Banking Policy and recommends the following be adopted as interim land banking guidelines: Selected tax foreclosed properties will be held for 2 years (redemption period) for the following City initiates: a. In-fill Housing b. City development initiatives C. Future ROW/Public Needs; and d. Revitalization of the Commercial Corridors/Central City 2. The Department of Engineering will work with the Departments of Housing, Economic and Community Development, Code Compliance, Planning and the City Attorney's Offir-e to establish and monitor specific performance timelines for holding of properties within the City. Requests by individual departments or City Council Members to hold properties for greater than 90 days or for inclusion into the longer term Land Banking Program will be referred to Council's Economic Development Subcommittee for review and approval. In the absence of an interlocal agreement with the affected taxing entities no property may be held for longer than 2 years. 3. The Department of Engineering will provide a quarterly report to the City Council identifying properties by District that are being held and for what public purpose. 4. Interlocal agreements will be developed through a partnering process with the affected taxing entities. The agreements will provide the mechanism to hold properties for periods exceeding two years, conveying property for less than fair market value for low to moderate income housing and for conveying property for fair market value when the adjudged value or the tax judgment amount is higher. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS --------------- INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8392 0),r� l To the Mayor and Members of the City Council April 2, 2002 Page 4 of 5 SUBJECT: Sales Guidelines for the Conveyance of Tax Foreclosure Properties and Establishment of Comprehensive Land Banking Guidelines 5. All tax-foreclosed property that directly fronts along each of the seven priority commercial corridors (Berry Street, North Main Street, East Lancaster Avenue, East Rosedale Street, Hemphill Street, West 7th Street and Camp Bowie Boulevard) will be identified and held from sealed bid sales until the interdepartmental team has reviewed each of the properties. Specific long-term land banking opportunities along the corridors will be provided to the City Council in the forrn of a written report. 6. All tax foreclosed property within the "Villages" as defined in the Commercial Corridors study will be held from sealed bid sales until the property has been reviewed by the interdepartmental team. Specific long-term land banking opportunities along the corridors will be provided to the City Council in the form of a written report. 7. All tax-foreclosed property within an area designated by City Council as a "Neighborhood Empowerment Zone" or Model Blocks will be held from sealed bid sales until the interdepartmental team has reviewed the property. r,!/ , The interdepartmental team consisting of the Departments of Housing, Economic and Community Development, Code Compliance, Planning, Engineering and the City Attorney's Office will develop long-term land banking policies and procedures. These long-term policies and procedures will be presented to City Council. Once approved, they will supplant the above interim guidelines. Estimate of Annual Costs Attributable to Land Banking Initiatives Based on recent bids received by Code Compliance the costs to maintain future parcels reserved for the land-banking program have been estimated and the assumes that each parcel will be mowed six (6) times per year and two 20-gallon bags of refuse will be collected. Following are the estimated costs: Parcels up to 7,500 sf $44.00 per parcel ($44,00 x 6 = $264.00 annually per parcel) Parcels from 7,501 sf to 21,780 sf $49.00 per parcel ($49.00 x 6 = $294.00 annually per parcel) Parcels from 21,781 sf to 1 acre $58.00 per parcel ($58.00 x 6 = $348.00 annually per parcel) Based on an analysis of the Surplus Property Database as of mid-March 2002 an estimate of cost to maintain parcels on annual basis is as follows: ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8392 To the Mayor and Members of the City Council April 2, 2002 Page 5 of 5 r; SUBJECT: Sales Guidelines for the Conveyance of Tax Foreclosure Properties and Establishment of Comprehensive Land Banking Guidelines Mowing and Trash Removal Parcel Size Number in Inventory Annual Cost Parcels up to 7,500 sf 441 $116,424 Parcels from 7,501 sf to 21,780 sf 134 39,396 Parcels from 21,781 sf to 1 acre 75 26,100 Total 650 $181,,920 Demolition and Board Ups Demolition of a typical single-family residential structure is estimated at $2,000. There are currently leparcels of tax-foreclosed properties with structures that would be potential candidates for molition. The estimated one time cost of demolition is approximately $52,000. Any structures that were not demolished, but instead were boarded up would cost approximately $500 per occurrence. Summary Unless further directed, Staff proposes to implement the above Guidelines for the Conveyance of Tax Foreclosure Properties and Establishment of a Comprehensive Land Banking Program on an interim basis. With the concurrence of the City Council, Staff will bring forward a Mayor and Council Communication in early May recommending the adoption of the above guidelines by the City Council. Should you have any questions I would be happy to respond at your convenience. ,��ary W. Jackson City Manager g" ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS