Tax delinquent property dispute entangles Schenectady

PHOTOGRAPHER: Kathleen Moore

On orders from City Hall, a tax collector refused to accept tax payments from a deceased owner’s nephew, opening the way for Schenectady officials to sell the property cheaply to a developer.

City officials said the developer could be better trusted to improve the property than the man who tried to pay the tax bill.

“It has been sitting as a blight on the neighborhood for 10 years,” Corporation Counsel L. John Van Norden said.

The city found a development company, 1001 Davis LLC, that would buy the property for $1,000 to $3,000.

But some city council members have expressed grave concerns about taking the property and then selling it cheaply to a developer who wants to replace empty apartment buildings with new apartment buildings.

The taxpayer, David Bianchi, is now alleging in court that the city is trying to steal his uncle’s property.

His unexpected tax payment, which started the court proceedings, got an immediate reaction from tax collection officials at Optimum Realty. The president of the company called an unidentified city official the day after the payment was received, and then ordered a manager to refuse the money.

“I am very sorry for the inconvenience,” wrote Optimum Realty Accounting Manager Megan Booker when she wired the tax payment back, the morning after Bianchi sent in $3,879, the first installment of a payment plan he had negotiated with Optimum. “The president of the company spoke with someone from the City of Schenectady just this morning, and we are not allowed to accept this payment.”

Van Norden said he did not know who might have directed Optimum to refuse the payment.

The properties in question, at the corner of Barrett Street and South Avenue near North Jay Street, take up half a block. The city owns most of the other properties. Selling them as a group to a developer could spark the redevelopment of an entire block.

abandoned buildings

The buildings were abandoned for years before their owner, Angelo Bianchi, died in 2005.

The city could have simply taken the land by having a court declare it abandoned if the taxes weren’t paid, which for many years, they weren’t. Nephew David Bianchi, who owns several apartment buildings in the city, did not try to pay the taxes until four years later.

In the meantime, the tax liens were sold to American Tax Funding, the city’s tax collector. ATF passed Angelo Bianchi’s liens to Optimum Realty along with many others that ATF deemed uncollectable. Then Bianchi said he would pay the debt.

But it’s hard to pay the taxes when you aren’t technically the owner. Bianchi’s elderly mother is Angelo Bianchi’s heir — or would be, if the will were probated. David Bianchi, who is handling the property for her, has no legal standing to sell the land or make any changes to the buildings. He’s also in bankruptcy court, raising the question that he might not be allowed to sell his assets to a developer without permission from a judge, who could make sure the profits go to his creditors.

It is on that argument that the city is trying to stop him from taking control of the property.

Van Norden said Bianchi cannot be allowed to sell the property himself, because the price will be too high.

“The problem is, it’ll scuttle the deal and there will be no development,” Van Norden said, adding that he thinks Bianchi is only interested in the property because he might be able to sell it to the development company, Davis LLC. He noted that Bianchi did nothing for nearly four years after his uncle’s death.

“Then, when Mr. Bianchi decides he’s going to be the wrench in the wheels of development, and seeing dollar signs in his eyes, he comes out of the woodwork and redeems the property,” Van Norden said. “He is himself in bankruptcy. One has to wonder where he’s getting this money. How much does he owe to people tied up with him in bankruptcy court? We’re not going to assist him in defrauding anybody.”

The city hired a bankruptcy law expert to handle the case. She expects to be in court soon to ask for permission to take the properties through eminent domain. The city cannot act without the judge’s approval.

Van Norden thinks the convoluted process will not end quickly.

“This is what happens when someone wants to really slow things up,” he said, stressing that the properties are a blight on the neighborhood. “How much longer do the people have to support these properties? The people have had to live with this blight. The city has started to do something. How much longer do we have to wait?”