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What you need to know for 07/25/2017

Schenectady collects $1.7 million in back taxes

Schenectady collects $1.7 million in back taxes

Threats of foreclosure brought a flood of money to the city this spring.
Schenectady collects $1.7 million in back taxes
The Patton & Hall building located at 237 State St. in Schenectady is pictured on Friday. The building is tied up in bankruptcy proceedings, delaying foreclosure.
Photographer: Marc Schultz

Threats of foreclosure brought a flood of money to the city this spring.

Schenectady received $1.7 million in back taxes from dozens of owners who didn’t want to lose their properties.

Unfortunately, many others didn’t pay up. If every owner threatened with foreclosure had paid, the city would have collected about $4 million.

“We’re doing good. It’s not great,” said Mayor Gary McCarthy.

The city was dealt one particular disappointment when the owner of 237 State St. filed for bankruptcy. That delays, but does not invalidate, foreclosure proceedings.

The building is a partially burned structure on lower State Street in the middle of the block that city officials plan to revitalize this year. It’s the only building on the block for which there are no development plans.

McCarthy said city officials thought they would be able to finally do something with the building because the city would own it through foreclosure.

“Now he’s filed for bankruptcy. That building will sit there. It slows the whole process. How do you show someone a building, ask them to make a $10 million investment, next to that?” McCarthy said. “It becomes so frustrating to deal with that.”

The issue is particularly frustrating because National Grid shut off power to the building, but someone installed a fake meter head and ran electric cords inside, McCarthy said. That led to a fire, and since the owner had no fire insurance, the building has been left unrepaired.

The owner owes the city about $120,000 in unpaid taxes.

But McCarthy is pleased by the $1.7 million in taxes that were paid. He plans to continue the strategy of sending out foreclosure notices every year. The notices refer to the taxes owed from the previous two years.

“It’s a slow, methodical process,” he said. “There’s no quick fixes.”

In the bureau of receipts, city workers can now accept partial payments and even help residents create payment plans.

“We’ll help them set up their own payment plan,” said bureau Supervisor Ed Waterfield. “We tell people, ‘Don’t wait until you have it all.’ We charge 21 percent interest and the interest does add up quick.”

After the foreclosure notices went out, he said, a number of owners asked him to determine how much they must pay per week to pay off their debt before the foreclosure deadline.

“A bunch of people paid periodically,” he said. “A lot of people were scrambling.”

McCarthy said the city wouldn’t foreclose on those who were paying regularly and had made a large dent in their debt.

“People who are acting in good faith, we try to work with them, if they’re consistent,” he said.

But he added that most of the owners were absentee landlords who routinely ignore their tax bills.

“If everybody pays their taxes, there would be an across-the-board 10 percent tax cut,” he said.

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