CITY COMMISSION AGENDA ITEM

Department:

City Manager’s Office

Commission Meeting Date:  Dec. 6, 2016

Staff Contact:

Diane Stoddard, Assistant City Manager

Recommendations/Options/Action Requested:

Receive report regarding outstanding property taxes and special assessments due from Eastside Acquisitions, LLC  regarding an industrial parcel located at 2460 Fairfield Street.  Direct staff as appropriate.

Executive Summary:

The City has recently become aware of a tax foreclosure involving a parcel of property in southeast Lawrence located at 2460 Fairfield Street.  The tract is approximately 3 acres and is zoned industrial with an approximate land value of $200,000.  The owner of the tract is Eastside Acquisitions, LLC, which is owned by two entities (1) Norris Holdings, LC, the principals of which are Darrell R. Norris and Phyllis A. Norris; and (2) Farmland Development, LLC. Farmland Development, LLC, was dissolved in 2010. However, before being dissolved, it was owned by an entity known as CCN Farmland.  The principals of CCN Farmland are: William R. Newsome, Robert M. Chase Trust, and Douglas J. Compton.

The parcel has a significant amount of unpaid taxes and special assessments due to all of the taxing jurisdictions dating back to 2011.  A chart showing the outstanding delinquencies to the City and Douglas County is below: 

Property Taxes
City	$4,171.79
County	$5,261.45
State	$206.18
USD	$7,889.71
Subtotal:	$17,529.13
Special Assessment
City	$85,608.39
County	$14,198.13
Subtotal:	$99,806.52
Other Costs
Interest	$31,545.40
Fees	$80.00
Subtotal:	$31,625.40
Total Delinquent Costs:	$148,961.05

Additionally, the parcel is subject to significant future special assessments totaling $53,787.36 to Douglas County and $144,504.30 to the City of Lawrence.

Douglas County has advised that the property will soon go to a tax foreclosure sale.  At the sale, bidders will be provided the opportunity to bid on the property. Current owners of the property are prohibited from bidding. There is no minimum bid and the outstanding taxes and special assessments do not need to be paid in full to win the bid.  However, the successful bidder will be required to assume the future taxes and special assessment obligations on the property.  Also, any funds that come in with the bid will be split in the appropriate ratio between the City and County to satisfy the outstanding taxes and special assessments.  The City has already written off the prior outstanding assessments. 

The City appears to have several options regarding this matter.  It could do nothing, or it could enter a bid on the property.  After careful review, staff does not recommend that the City submit a bid on the property but did want to bring the matter to the attention to the City Commission in case action was desired. 

Strategic Goal Area:

Other

Fiscal Impact (Amount/Source):

The fiscal impact to the City may be up to the outstanding taxes and special assessments owed in the amount of approximately $95,000. 

Attachments:

Map

Total Tax and Assessment Delinquencies by Year – Added 12/05/16

Reviewed By: (for CMO use only)

☐TM ☒DS ☐CT ☐BM