1. Tax Foreclosed Property
Presented by Jesus Chapa, Director
Housing and Economic Development
April 10, 2012

2. Presentation Overview
Update Regarding Sale of Tax-Foreclosed Property
Request for Council Direction on Future Sales 2

3. = Tax Foreclosed Property9

4. How does the City receive tax foreclosed properties?
Each month Tarrant County holds a sale of properties foreclosed for non-payment of taxes.
Properties located in Fort Worth which do not receive a bid are “struck off” to the City.
The City holds the properties as trustee for all taxing entities
must market and sell the properties.
The sales proceeds (minus fees and lien releases) are divided amongst the various entities that were a party to the lawsuit. 3

5. How Does the City Sell Tax Foreclosed Properties?
Direct Sale – Strategic Areas:
An interested buyer must approach the City with a request to purchase the property.
Must show how the property will be developed and funding
New development must comply with zoning
Allows the City to control the type of development that occurs in the strategic areas
Sealed Bid Sale – Non Strategic Areas:
Properties are added to bid sale once staff has verified the following:
Zoning complies with Comprehensive Plan
If not in compliance, work with Planning and Development to re-zone 4

6. Inventory Reduction 2010 – Over 1000 tax foreclosed properties
Summer 2010 – March 2012
sold 523 properties for almost $3.4 million.
City has received an estimated $1,420,000
Over $550,000 in city fees and lien release payments
Over $870,000 in taxes
$500 for mowing – Goes to Parks
$600 for Board up or Demo– if this was done– goes to Code
If funds remaining from sales proceeds– HED gets $500– to cover filing deeds and lien releases -- does not go into our budget– goes into General Fund Revenue- 5

7. Current Inventory Status
7-15 properties a month are “struck off” to the City
645 properties in the inventory as of March 2012.
Of these, 266 are available for sealed bid sale. The remaining 379 are in strategic areas and must be sold via direct sale.
Sealed bid sales are held every other month to reduce the inventory, but these sales do not address the 379 properties in strategic areas. 6

8. Tax Foreclosed Properties7

9. Issues Related with a Large Inventory
Lost tax revenues
Ongoing mowing and maintenance costs
Resources not available to fully manage which leads to:
Illegal dumping
Illicit uses
Deterioration of properties
Loss of opportunity for development 8

10. Breakout of Strategic Area
379 Properties in Strategic Area:
241 vacant residential lots
62 improved residential lots
43 vacant commercial lots
31 improved commercial lots
2 duplexes
Source: TAD 9

11. CD #2
= Strategic Area Boundary = Tax Foreclosed Property 11

12. CD #3 = Strategic Area Boundary = Tax Foreclosed Property 12
NOTE: CD 3 has two strategic areas. There are no tax foreclosed properties in either area. 12

13. CD #4
= Strategic Area Boundary = Tax Foreclosed Property 13

14. CD #5
= Strategic Area Boundary = Tax Foreclosed Property 14

15. CD #6
= Strategic Area Boundary = Tax Foreclosed Property 15

16. CD #7
= Strategic Area Boundary = Tax Foreclosed Property 16

17. CD #8
= Strategic Area Boundary = Tax Foreclosed Property 17

18. CD #9
= Strategic Area Boundary = Tax Foreclosed Property 18

19. Strategic Area Properties Non Strategic Area Properties
Detailed Inventory CD
Strategic Area Properties
Non Strategic Area Properties
# of Properties
TAD Value 2 51
$2,061,644 45
$1,336,960 3 $0 5
$327,832 4 10
$362,301
$157,512
169
$2,583,187 61
$2,181,578 6
$112,659
$78,060 7 93
$1,436,480 8
$1,583,773 52
$762,160
113
$4,642,761 9
$80,450 28
$567,160
TOTAL
379
$7,398,881
266
$10,875,636 19

20. Strategic Area Properties Non Strategic Area Properties
Time In Inventory
Years In
Inventory
Strategic Area Properties
Non Strategic Area Properties
# of Properties
TAD Value
12+ 83
$905,577 46
$1,283,808
7-12
113
$1,774,440 53
$3,163,258
4-6 91
$1,843,190 36
$2,541,018 3 39
$1,800,648 13
$1,061,811 2 23
$715,292 34
$713,564
1 or less 30
$1,436,480 84
$2,112,177
TOTAL
379
$7,398,881
266
$10,875,636 20

21. Time In Inventory Average Non Strategic: 5 years, 8 months Strategic:21

22. Expenses to Manage Police Department Fire Department
calls to properties to address complaints
Fire Department
calls to properties to address fires
Parks & Community Services Department
mowing
Code Compliance Department
board –up
Housing and Economic Development
management 22

23. Parks & Community Services Mowing of Tax Foreclosed Properties
2010: Total: $768,900.20
Properties – 1170
Mowing Cycle – 35 days
Cost – $73.02
9 mows per year
2011: Total: $590,804.82
Properties – 899 23

24. Code Compliance Department Board-Up of Tax Foreclosed Properties
2010: Total: $10,015
# of Board-Ups: 14
Avg. Cost per board-up: $715.36
2011: Total: $38,044
# of Board-Ups: 34
Avg. Cost per board-up: $1,118.94
2012*: Total: $19,718
# of Board-Ups: 10
Avg. Cost per board-up: $1,971.80
*From October March 2012 24

25. Code Compliance Department Demolition of Tax Foreclosed Properties
2010: Total: $529,991
# of Demos: 13
Avg. Cost per Demo: $40,768
2011: Total: $180,894
# of Demos: 49
Avg. Cost per Demo: $3,692
2012*: Total: $34,051
# of Demos: 6
Avg. Cost per Demo: $5,675
*From October March 2012 25

26. Code Compliance Department Clean-Up of Tax Foreclosed Properties
2010: Total: $16,203
# of Clean-ups: 3
Avg. Cost per Clean-up: $5,401
2011: Total: $37,104
# of Clean-ups: 8
Avg. Cost per Clean-up: $4,638
2012*: Total: $3,208
# of Clean-ups: 1
Avg. Cost per Clean-up: $3,208
*From October March 2012 26

27. Options to Reduce Inventory
Eliminate strategic areas – sell all tax foreclosed properties through bid sales
Reduce the number and/or size of strategic areas
Keep current procedures, however, adopt policy that properties can only be kept for a specific time period (for example 2 yrs.) before being placed on a bid sale.
No change in current procedures 27

28. Next Steps Meet with City Council members individually to discuss:
potential of reducing the size of strategic areas
potential of reducing the number of strategic areas
Potential for setting a time limit on properties whereby they become eligible for bid sales
Present to City Council, as part of the budget process, any recommended changes to the current process 28

29. Questions/Discussion?29