Schenectady starts selling houses

PHOTOGRAPHER: Kathleen Moore

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At long last, the city has begun selling the houses it seized for unpaid taxes last year.

Five new owners agreed to make substantial renovations — in the tens of thousands of dollars — to bring their new properties up to code. They also agreed to purchase prices high enough that the city made back almost all of what it lost in delinquent taxes on those properties.

City Council members had hoped to sell many houses before winter. The process instead took 10 months, but it’s finally under way.

On Monday, the council sold five houses — and nearly sold a sixth, but two more bids came in at the last minute. In response, the council decided to allow bidding to continue until Friday before making a final decision.

For the five houses sold Monday, the city received a total of $99,500.

That’s almost exactly as much as the city was owed in taxes on those houses: $99,936.

But the windfall came mainly through the sale of one house: 1902 Broadway, which sold for $60,000. The former owner, Timothy Will Young, owed $25,251 in back taxes.

When the city foreclosed, each property’s tax bill was wiped out. But the hope was to recoup at least some of those taxes — and the hefty cost of foreclosure — by selling the property.

The key was finding buyers who would also agree to make renovations and live in the property, rather than becoming landlords. Many of the properties were seized from landlords who collected rent but did not maintain their houses or pay the taxes.

bids coming in

After Mayor Gary McCarthy hired Realtors to sell the houses, bids started flowing. There are several more sale contracts in the pipeline, Councilman Carl Erikson said.

“This is really good progress,” he added. “I’m delighted with the number we had tonight.”

But the sudden interest in the houses was bad news to one family.

Christopher and David Malizia had intended to buy 2522 Campbell Ave. for $15,100 Monday night. They also agreed to renovations that the city estimated would cost $55,000.

But after their bid was approved by the property disposition committee and discussed by the City Council in committee last week, two more bids came in. One was filed Monday, just hours before the council meeting.

In light of that, Corporation Counsel John Polster said the council should let all the parties continue bidding before selling the property. Bids will be accepted at the Law Department office in City Hall until the end of the day Friday.

The council agreed to postpone a vote on that sale, but Erikson said it indicated a flaw in their process.

“That’s a really good problem to have, but we need to figure out a process where everyone is treated fairly,” he said.

Christopher Malizia urged the council to just sell him the property.

“I want to bring it back to life,” he said. “We plan to go full time as soon as we get the property, hit the ground running. We don’t even need the year [to finish renovations].”

He added that he doubted the other bidders had inspected the property. He and his brother walked through it before deciding to bid on it.

“They just think they can slap a coat of fresh paint on it,” he said. “They don’t know; they haven’t seen the inside.”

The brothers offered before-and-after pictures of another city property they had renovated, and noted that they were current on their city taxes. They emphasized that David Malizia would live in the two-family house.

But Polster implied that they would have to pay more to buy the house now. He told them that if they wanted it, they should offer a new bid.