Clairton hopes to benefit from sale
By Jennifer R. Vertullo
Published: Saturday, Sept. 7, 2013, 1:06 a.m.
Clairton is invoking Pennsylvania's Third-Class City Code in an effort to put delinquent properties back on active tax rolls.
Combining the city's existing vacant property review process with a state provision that allows liened properties to be sold publicly 30 days after a year's delinquent real estate taxes have been recorded, Clairton will host a delinquent real estate tax sale in council chambers on Monday.
The sale, scheduled for 6 p.m., is the continuation of a public process that began on June 3. That session was opened briefly and adjourned to July 22, then again to this month.
“We wanted to get all three taxing bodies coordinated,” city manager Howard Bednar explained. “We are ready for Sept. 9. It will happen.”
In auction-style proceedings, Bednar will lead a three-phase review of nearly 180 city properties. Lot by lot, he will follow the list — first asking if the property owners are present to pay due taxes. If not, the property will be open to public bid in a second phase.
“For example, if there is a total of $15,000 (in due taxes), I would ask if anyone wishes to purchase the property for a minimum bid of $15,000 plus city cost,” Bednar said. “If someone says they will pay the $15,000 plus cost, I will ask if anyone else is interested in a higher bid.”
That process could go back and forth and would end at the highest qualified bidder.
If no one is interested in purchasing the property for the total amount of back taxes plus city cost, Bednar will enter the third phase of the sale by transferring it to individuals or organizations who began the vacant property review process prior to the sale. If those parties still are interested, they will receive lien-exonerated property under the following conditions:
• They must keep current on all future real estate taxes, beginning with 2013.
• They must remain current on all real estate taxes, charges and fees on any other properties they own in the city.
• Property must be maintained, keeping vegetation cut at least four times per year and clean of all garbage.
• If the property has a structure on it, it would be required to be fully compliant with all building codes or be demolished within a specified period of time.
• The property cannot be sold within a specified period of time.
• The property assessment cannot be appealed for a specified period of time.
• The property cannot be declared tax exempt for a specified period of time.
• The purchaser must pay the pro-rated cost that the city incurred with the delinquent tax sale, estimated at $400.
The standard vacant property review process is time-consuming and expensive, Bednar said. The legal process costs interested parties between $3,000 and $4,000 in court fees alone.
“People don't have that kind of money, especially for a small lot next to your house that, by today's standards, is not a buildable lot,” Bednar said.
In a city that can't afford to fully exonerate taxes with residents who can't afford the fees associated with properties they would like to save, he said the delinquent real estate tax sale has to be a winning option.
While Third Class City Code does not require delinquent properties to be vacant to qualify for the sale, Clairton's program is only addressing vacant land and unoccupied structures.
“There was never any intent to remove people from their houses,” Mayor Rich Lattanzi said. “We wanted to move vacant property. One-fourth of our city is either abandoned or blighted. We needed to find a way to get some of these houses back on the tax rolls and basically fixed up or remodeled.”
Monday's sale includes a 52-lot neighborhood along the wooded Lincoln Way on the city's border with Jefferson Hills. These properties will be grouped in one sale, rather than a piecemeal auction.
If no owners are present and if no developers express an interest in the land on Monday, the property will be transferred to the Redevelopment Authority of the City of Clairton.
Authority chairman Kevin Jones said having control of a large developable parcel would be advantageous because it would provide an easily navigable process for interested developers, because the costly hassle of acquiring deeds to 52 separate properties would not exist.
“This could be a one-stop shop for a developer,” Jones said. “It's a positive thing that could bring a lot of potential to expedite growth.”
The redevelopment authority also is interested in a block of properties along St. Clair Avenue in the city's downtown business district.
With other Mon Valley communities under the same pressure of financial distress since the steel industry's decline in the 1970s and '80s, Clairton officials believe fellow third-class cities of McKeesport and Duquesne could take advantage of delinquent real estate tax sale laws sales as soon as next year. They also have generated an interest among local councils of governments to pursue legislation that would allow boroughs or townships to develop a similar process.
Clairton Solicitor Deron Gabriel confirmed Pittsburgh, under Second-Class City Code, is the only regional municipality to have conducted a delinquent real estate tax sale to date.
“We are not the only city that has a problem with property that can't be moved,” Lattanzi said. “I'm very excited for the prospect of what can happen on Monday.”
Jennifer R. Vertullo is a staff writer for Trib Total Media. She can be reached at 412-664-9161, ext. 1956, or email@example.com.
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