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Gloversville begins pilot program for foreclosed properties

Gloversville begins pilot program for foreclosed properties

City wants to rehab properties
Gloversville begins pilot program for foreclosed properties
Photographer: Shutterstock

GLOVERSVILLE -- The Common Council voted unanimously Tuesday night to acquire 23 Park St., the first step in a pilot program that seeks to change the way the city addresses chronically distressed properties.

Mayor Vince DeSantis said the lot at 23 Park St., which has a one-family, two-story home on it, is an example of a property that was "underbid" at Fulton County's most recent foreclosure auction, meaning the $7,000, plus 10 percent bid made at the auction did not cover the back taxes owed for the property.

"We've never done this before. The city has never exerted control over this before. This is the first time that we've approached the county and said, 'can we work something out, where we take a proactive approach, acquire these properties and make sure they get into the hands of a qualified homeowner,'" DeSantis said.

Unlike most cities, Gloversville does not foreclose on its own properties. DeSantis said the city gave foreclosure power to Fulton County around the turn of the century, while he was still a city judge.

He said giving up foreclosure power was good for the city's finances because it alleviated the city of the responsibility to pay taxes owed on city properties to the school district and the county, However, it also meant the city lost control over the fate of its distressed properties.

DeSantis said it's time for Gloversville to take some of that power back.

The normal procedure for underbid properties at Fulton County's foreclosure auction is for the finance committee of the Fulton County Board of Supervisors to vote on whether or not to accept the high bid for the property. The Gloversville Common Council Tuesday night agreed to match the high bid for 23 Park St., at a cost of $7,700.

While it will take an approval vote of the full Board of Supervisors to agree to sell the property to the city, the finance committee has informally endorsed the idea, according to DeSantis.

If Gloversville is allowed to acquire 23 Park St., DeSantis said the plan will be for the city to "mothball" the property and make it presentable for sale to an income-qualified home buyer who agrees to enter into a deed covenant requiring the homeowner to reside within the house at the property.

"A home that is well-maintained and up to code, benefits all of the homeowners in the neighborhood. This is something we wanted to try to think outside the box," he said.

DeSantis said Gloversville needs to find a way to break the cycle of Limited Liability Corp.'s purchasing foreclosed properties in the city, failing to pay taxes on them, and forcing the county to wait another three years before foreclosing on them again.

"Sometimes these properties are sold for $2,000 to $3,000. The owners have never even seen the property, and then when they do they say 'oh my God!' and walk away and the property stays vacant for years," he said.

The purchase of 23 Park St. cannot be finalized without several more steps.

First, the Fulton County Board of Supervisors must approve Gloversville's bid for the property at the board's Aug. 12 meeting.

Then the Common Council will hold a required public hearing on the acquisition of 23 Park St. at its Aug. 13 work session meeting. The council can vote to finalize the purchase after the public hearing is held.

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