Speaker Asks County To Improve Tax Deed Property Sale Process

During time for public comment at the Marinette County Board meeting at 9 a.m. Tuesday, Jan. 26, realtor Mike Kunesh suggested that Marinette County should make some changes in the process of selling properties taken through the "in rem" foreclosure process for unpaid taxes to improve financial results for the county and make it easier for private home buyers to fulfill dreams of becoming home owners by acquiring those properties.

Some of his comments and suggestions became a topic of discussion at a Marinette County Association for Business and Industry (MCABI) Board meeting at 1 p.m. that afternoon. County Board Chair John Guarisco, who is a member of that board, asked Corporation Counsel Gale Mattison to bring copies of applicable statutes to their February meeting, and asked to have the subject of selling in rem properties be on the agenda for more discussion.

Kunesh told County Board the timeline for bidding on a renovated home at 1842 Liberty Street in Marinette simply does not work in today's market, when it can take up to 60 days for a first-time buyer to get approval for a loan. He also declared the 25 percent down payment required is prohibitive for most prospective home buyers, particularly those buying first home.

Also, he said, by not putting properties in the multiple listing service (MLS), "a tool that all realtors use," and by not advertising widely, they are limiting the number of potential buyers. He had been told there was not even a "For Sale" sign on the newly renovated house the county is trying to sell at 1842 Liberty Street in Marinette.

(There were no bidders the first time that 2-family house on Liberty Street was offered, so it was re-offered and a new, longer bidding window was opened. Bids are due by 3 p.m. Friday, Feb. 19 on a second try, and the required down payment has been reduced to 5 percent, which will be forfeited if the successful bidder does not ultimately buy the property. Originally the county bid process required a 25 percent down payment, payable by a cashiers check with the bid.)

Other than that, Kunesh had praise for the new program through which Marinette County has partnered with NEWCAP and MCIDC to renovate selected homes taken through the tax deed process and then offer them for sale in greatly improved condition.

"I think it's great that the county is investing money to renovate these homes," he said, but added, "I believe the current system the county uses really encourages investors, and makes it challenging for those who would use it as a private residence to make an offer." He felt local real estate agents who work with home buyers do not even know it's out there. He feels the system that is in place is very intimidating to a first time home buyer, and said in today's world there is a realtor involved with 89 percent of homes sold.

County Administrator John LeFebvre thanked Kunesh for coming to them and mentioning how the county is selling its homes.

"We'd definitely like to sell them in a different fashion, but that is not possible for us," LeFebvre added. He explained that state law requires tax deed foreclosure properties to be sold by the sealed bid process or by auction to the highest bidder.

Kunesh is one of the candidates seeking the 89th District Wisconsin State Assembly seat vacated by the resignation of John Nygren, and LeFebvre suggested that if elected, Kunesh should work to get those laws changed.

Sale and renovation of three of the homes taken this year by Marinette County for unpaid taxes was once again a major topic of discussion at the monthly meeting of MCIDC at 1 p.m. Tuesday afternoon.

MCIDC is charged with overseeing and financing the renovation work done through the agreement with NEWCAP and for ultimate sale of the properties once the renovation work is done. Goal is to recoup the renovation costs and all unpaid taxes and get the properties back on the tax rolls with a higher assessed value while providing quality housing which is badly needed in the county.

LeFebvre is also very directly involved in the renovation and sale processes. In rem properties that are not renovated are sold to the highest bidder, generally at an annual or bi-annual tax deed auction.

There are currently three residential properties in the rehabilitation program with NEWCAP. Work is complete on the home at 1842 Liberty Street in Marinette, the first to be completed in the new program. Improvements are in progress on homes at 1240 Forest Street in Niagara and W8748 Dow Dam Road in Amberg.

Because the homes are "in rem" properties taken on tax deed foreclosures, they must be sold either at auction or through a sealed bid process to the highest bidder whose offer meets or exceeds the minimum price. Conditions for the bid process, including down payment and timeline for completing the sale, are set by the county.

The Liberty Street home had been offered for sale last fall, but LeFebvre had told the MCIDC board at its December meeting that there had been no bids by the Nov. 18 bidding deadline and he felt they needed more time to sell it. He also felt the required cashier's check for a 25 percent down payment was perhaps too high. If a bidder were to submit the high bid and and then be unable to get the needed financing the entire down payment would forfeited. In the case of a $100,000 bid, that would mean a $25,000 loss. He suggested that might be a bit high, and perhaps they should lower the down payment to 5 percent.

Guarisco, who is a professional realtor as well as County Board Chair and member of the MCIDC Board of Directors, agreed with both ideas. He said he had notified the local realtors that the property was available, but the home had not been advertised on the multiple listing system.

Mattison said she would not oppose cutting the down payment to 5 percent. She agreed that $25,000 is lot of money, and on $100,000, even 5 percent is $5,000. However, if there were no down payment required people might bid and be unable to buy, and the county would need to go through the sale process again.

Guarisco declared to most private home buyers, $25,000 is prohibitive, and said the 45-day bidding window was too restrictive. He suggested allowing at east 60 days to close, and more time between the bid deadline and posting the property for sale. The last time they had allowed only a 2-week window because they were trying to avoid heating the home through the winter. Guarisco said he had one prospective buyer call him but the bid deadline had already passed.

The MCIDC Board then unanimously agreed to offer the Liberty Street property again, with a 5 percent down payment, 60 days between being accepted and closing, and set the bid deadline for 3 p.m. Friday, Feb. 19, which would be prior to the Feb. 23 County Board and MCABI meetings.

LeFebvre told the board that NEWCAP had encountered some problems with the Dow Dam Road property renovation work and would be requesting some change orders that would increase the renovation price by approximately $11,000.

Guarisco said two County Board Supervisors had pointed out to him that NEWCAP charges the county a percentage of the total renovation cost, "so the higher the cost of repairs, the more money they make...there's no incentive to keep costs down!" Learning about that percentage of cost agreement "blew all kinds of red whistles for me," Guarisco declared.

LeFebvre said there is a cap on total cost for each renovated property. He added that NEWCAP realized they had overspent on the Liberty Street property and did not come back for an increase.

LeFebvre said NEWCAP is working with a realtor that would try to market the Liberty Street home.

Guarisco said he is president of MLS, and listing with them is a 10-minute process and he will look into their by-laws in terms of that group being able to work with the county.

In other action at the December meeting, LeFebvre strongly recommended renewing the MCABI Loan Administrator Agreement with Mike Piasecki under the same terms and conditions for a 1-year term starting Jan. 1, 2021. Other members of the board approved without dissent, and Piasecki agreed to accept the extension.

Board members present were Diane Becker, Laura Mans, LeFebvre, Guarisco, Rick Polzin, Gale Mattison, Tom Mandli, Kim Brooks and Steve Votis, by phone.

They also approved some changes to the Revolving Loan Fund Manual that included making it easier to reduce interest rates for qualifying businesses, particularly in view of Covid; denied a loan request for which they wanted more detailed information and more collateral; discussed status of current loans; and agreed to remove MCABI as an entity with a member representing them on the board, since that organization no longer exists. The former MCABI has been converted to inVenture North. Shelly Ghere, who was the MCABI representative, was not present for the meeting.

First order of business at the Jan. 26 MCIDC Board meeting was election of a chair and vice chair. By unanimous vote, Chair Diane Becker and Vice Chair John LeFebvre were both returned to office.

Following a brief closed session on a loan application and a potential loan default the board returned to open session to discuss applications, defaults and the active loans report, including interest reduction requests before turning to discussion on the tax deed properties.

They advised Piasecki to ask applicants for extensions, deferred payments and interest reductions on their loans to provide very specific information about what help they need, for how long, and why.

LeFebvre reminded the board that deadline for bids on the home at 1842 Liberty Street is 3 p.m. Friday, Feb. 19. Bids will be opened at that time, and MCABI members will be kept informed. He asked board members, "If you know anyone interested, send them my way." He said there has been some interest from a neighbor, a few individuals, and a couple who would like the entire home for themselves, not as a rental unit.

People can look at photos and other information on-line for that property and for the home at 1240 Forest Street in Niagara, where painting and plastering are being completed. Outside work is done, and completion is proceeding quickly.

A tree had fallen on the garage side of the home at W8748 Dow Dam Road in Amberg, and LeFebvre is having the forestry crew come and remove it. There were issues with some leaks, and all the doors and windows are to be re-done. A change-order request totaling $11,188.45 was approved after some detailed explanations by LeFebvre. There had previously been approval of change orders totaling $7,216, and back taxes due come to $1,030, so the sale price will need to e about $121,000 to cover all costs, rather than the original estimate of $110,000.

Before the meeting adjourned, Guarisco asked that their next agenda include discussion on ways to legally make it easier for private buyers to purchase these homes and other tax deed properties. He asked Mattison, as County Corporation Counsel, to bring copies of the actual statutes and whatever other information she has.

Mattison said she was glad he asked, because she felt the person who had spoken at the County Board meeting "had somewhat misled the board."

"I don't want to go through all this and then find out too late that there is some leeway in the law, perhaps a provision allowing them to make some decisions "for the greater public good." He added that the speaker was correct in saying that he would like to see us "loosen the noose on this property and let it on the web sites, and in saying that with the rules as they are now, investors would be their typical buyers.

"Individuals seeking to buy a home for themselves would want their offers subject to financing, and we don't have that leeway right now," Guarisco said, and added, "If we could go that route it would be great!" He added that the speaker at County Board that morning was not aware that current laws do somewhat limit what the county can do to sell the in rem properties.

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