Council decides against tax sale certificate sale

Jul. 21--WATERTOWN -- The City Council on Monday night said thanks but no thanks on a offer by a White Plains real estate agent to purchase the tax sale certificates for 11 properties that it had acquired during an annual auction three weeks ago.

In a 3-1 vote, council members passed on the deal by real estate agent Karan Garewal to purchase the tax sale certificates -- worth $40,314.94 -- that the city ended up with as the default bidder during a June 25 auction. Councilwoman Lisa A. Ruggiero cast the only no vote, adding the deal would have been brought in revenue for the city.

"Let's hold on to them," Mayor Jeffrey M. Smith said before voting against selling the certificates.

The city ended up with tax sale certificates because no one else submitted bids on them at the June 25 auction.

The transfer of so many tax sale certificates after the action would have been an unusual move for the city.

The properties included: a $6,033.16 certificate for the building that houses Shaker's Bar at 536 Arsenal St.; a $13,297.02 certificate for the Fun Xcape building, 223 JB Wise Place; $2,054.97 for a commercial garage at 805 Huntington St.; and 11 residential properties.

The city holds tax sales annually for properties that have gone one year in arrears with city, county or city school district property taxes. The city is made whole when bidders, usually investment firms, pay those delinquent taxes following tax sale auctions.

Delinquent owners have two years after a tax sale to redeem their properties before the owners of the tax sale certificates can request to take ownership of the properties. To do so, they must pay all outstanding taxes and any interest and penalties.

Council members looked at it as a short term investment because the city will earn a 1-percent-per-month interest charge on properties, which then is given to the tax sale certificate holder, along with the money paid for the certificate, if the property owner pays in full.

During the June 25 auction, the city sold tax sale certificates for 101 properties for $214,632, while the city acquired certificates for these 14 properties and 55 others.

Three properties came off the list before Monday night because property owner Mark Bonner paid off $3,234.88 for 644 Bronson St. and $1,916.72 for 113 Rutland St. South in back taxes that he had owed.

There also was an issue for the certificate for 850 Superior Street property because the house encroaches on another property, so that also was taken off the list.

Mr. Garewal, who had not seen the properties in person, missed the auction, he said, because he didn't want to risk traveling from his Mount Kisco home and "physically attend the auction" during the coronavirus pandemic.

He, too, saw the tax sale certificates as a short-term investment that would have earned 1 percent interest on each property.

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