Focused on Eliminating Blight and Vacancy, TGNCDC purchases 3751 Potomac for Redevelopment
In 2014, Tower Grove Neighborhoods Community Development Corporation (TGNCDC) created and then updated a long list of vacant and abandoned properties in Shaw, Tower Grove South and Southwest Garden neighborhoods. On the top of the priority list was a vacant property in a highly visible location at 3751 Potomac Ave in Tower Grove South. Based on our TGNCDC framework and vision plan (download here), the property is in our focus area for redevelopment work. The previous owner bought the property over 6 years ago with intentions of renovating but didn’t have the time nor the financial means to complete the project. A gut renovation typically costs upwards of $90 to $110 per sq ft. And it takes a skilled and experience team to complete these projects.
TGNCDC first sent a letter to the owner of 3751 Potomac over three years ago and we also personally visited his home outside of the city. We didn’t have any luck. Like most, decision time to sell for this owner of a vacant property in STL City is when he fell behind on his real estate taxes for 3 years. That’s because, on the 4th year, his property was put up for auction at one of the four tax sales the Sheriff holds each year. Some advocates for reducing vacancy have discussed speeding up this type of sale to one year tax delinquent from three and we expect this to be talked about more in the future. The positive side of speeding up the sale is that the properties don’t fall into as much disrepair and the buildings may be renovated at a lower cost while eliminating the blight and adding to the City tax rolls faster (assuming there is a market for these homes). It’s worth noting that tax sales properties may be redeemed (paying the delinquent taxes) up to the last minute before the actual sale. Lots of work goes into these auctions in time, money and capacity only to be right back in the same position going forward. That includes a special tax sale for some of the worst of the worst City properties that takes place every Oct. This is the way the City sells vacant/abandoned properties with past tax debts and loads of fines sooner than the 3-4 year time frame.
In the case of 3751 Potomac, the owner contacted us so late in the process (a few days before the tax sale) that we were only able to run a letter report. The letter report costs about $150 and can be provided by a title company. It outlines all the past fines and other liens on the property. We discovered an occupancy lien from the City for $5000 and $2200 in building code fines. One additional year of taxes due for about $700 and past water bills for $200. These additional costs to close and the owner’s unwillingness to pay them made the purchase much more expensive and difficult. With a little research from our friends at Beck Law (jpbecklaw.com), who specialize in tax sales, we were informed the occupancy lien isn’t typically enforced by the City and that it would be would be released after we complete the rehab. Then we were informed by the good people at the STL City building division that back building code fines could be waived by the local Alderman. 15th ward Alderwoman Green assisted with removing the fines. Without this information, we may not have pursued this project. This is important to note because you have to wonder how many people decide not to invest in our neighborhoods because of the negative factors on the title work that could have been resolved fairly easily?
In the end, the owner paid the 3 years of back taxes at the last minute before the sale and it was removed from the tax sale list. This is a typical occurrence. Several months later and after more negotiating, the owner held to his promise to sell the property to us for a renovated single family home.
Construction on 3751 Potomac has already begun and the financing was provided by Gateway CDFI (http://gatewaycdfi.com/). The building was filled with construction materials and other reusable items. Refab (www.refabstl.org/) and local neighbors were able to re-purpose them for other projects. We expect the home to be completed in the next 3 months.
As you walk, bike and drive our neighborhoods and you see dumpsters and other signs of economic activity, please understand the high level of work and effort that goes into redeveloping only one vacant building in our City. With more informed people and some tweaks to the process, TGNCDC knows we can accelerate our development of vacant buildings. Each investment helps drive more investment. TGNCDC is dedicated to removing all vacant buildings/lots in our service area to attract new neighbors and stakeholders to STL City.