Hoping to increase its access to funding for the acquisition, demolition, and rehabilitation of neglected properties, the city is considering an alliance with the Cuyahoga County land bank.
The City Council on Tuesday will discuss in committee a proposed memorandum of understanding with the Cuyahoga Land Reutilization Corp. that would create the framework of a partnership whose purpose it is to return distressed Lakewood properties to tax producing status.
The 20-page draft document outlines how the two entities will coordinate their efforts and sets standards on how properties within the city acquired by the county land bank – largely vacant, abandoned or tax-foreclosed – will be handled. (see .PDF).
The memorandum, for instance, discourages the sale of a rehabbed home to an owner who will rent it out rather than live in it. In addition, the sale of any commercial and industrial property will be subject to a development agreement that requires a specific redevelopment or re-use within a specific period of time.
Interim Mayor Michael Summers at the last meeting of City Council said memorandum negotiations with the county land bank were “through and slow” and “fairly frustrating.”
Gus Frangos, president of the Cuyahoga County Land Reutilization Corp., said Summers’ assessment was “probably a good characterization” of the situation.
Frangos admitted the initial delay in negotiations was the result of his procrastination. “I take the full blame,” he said.
However, the city’s law department contributed to the problem later when it was careless in reviewing sections of the draft agreement that contained language geared towards a different municipality. The issue further bogged down when the city inserted minute details that didn’t belong in a document that was meant to be very broad. As a result, the effort to revise the agreement was a lengthy back and forth process.
Frangos, who is also an attorney and deals with about 100 different properties each month at the county land bank, said the memorandum of understanding with the city is now complete, and ready for the review and approval of the mayor and the city council.
City targeting six structures for demolition
One objective the city hopes to achieve through its relationship with Frangos and the land bank is greater access to financial assistance to help with the demolition of several nuisance structures.
According to the Division of Housing and Building, here are the six properties the city wants to demolish:
Address: 1369 Westlake Ave. (Ward 2)
David and Patricia Laform acquired the home in 1987. They received a $144,330 mortgage in 2004. Their lender successfully foreclosed on the property in April 2009, but didn’t move it to sheriff’s sale. The Laforms owe $9,000 for back property taxes, water and sewer, and lawn maintenance fees. The Laforms also own an Atkins Ave. home that has been successfully foreclosed upon, but not sent to sheriff’s sale.
Address: 2067 Bunts Rd. (Ward 3)
Maureen Kundtz purchased the property in 1978, and lost it in a 2007 foreclosure. CitiFinancial Mortgage acquired the property at sheriff’s sale for $94,900. It owes more than $20,000 in delinquent property taxes and water, sewer, and lawn maintenance fees.
Address: 1241 Thoreau Ave. (Ward 4)
Jeffery and Patricia McNerney purchased the home in 1981. Patricia became the sole owner in 2001 after a divorce, and received a $108,000 mortgage in 2003. The home has been in foreclosure since 2009. She was found guilty in October 2010 in Lakewood Municipal Court of failing to comply with an order to maintain the house. McNerney is current on her property taxes.
Address: 1635 Hopkins Ave. (Ward 4)
Charles Willis Jr., John Cepec, Michael Cepec, Sr. and five other people took ownership of the home in 1990 through probate court. Beginning in 1999, the property was involved in a decade long foreclosure effort. The city declared the property vacant and abandoned in 2006. The property was sent to sheriff’s sale in 2007 and 2008, and was not bid on in either instance. Plymouth Park Tax Services successfully foreclosed on the property in 2010, but did not sent it to sheriff’s sale.
The property has numerous tax liens. The property owners owe $16,567 in unpaid property taxes and lawn maintenances fees dating back to 2006.
Address: 2145 Halstead Ave. (Ward 4)
Coletta Kilbane purchased the house in 2006 for $35,500 with a $28,500 mortgage. Related documention suggests it was acquired as an investment property. Wells Fargo’s 2010 foreclosure was uncontested by Kilbane. The home was appraised at $10,000, and sent to a sheriff’s sale that was cancelled. The property taxes are current, but $1,285 is owed for water and sewer, lawn maintenance, and criminal nuisance fees.
Address: 1549-59 Lakewood Ave. (Ward 4)
New York resident William Oscar Graham purchased the six-family brick and wood apartment house in 2005. A juvenile who lived in the property was found to have lead poisoning in 2008 and a lead risk assessment identified lead hazards on the property.
Green Tree Management Systems terminated its property management agreement with Graham in September 2009 due to non-payment of bills. The Lakewood Fire Department visited the property in October 2009 to investigate vandalism to the property’s gas lines. Water service was disconnected that same month due to an outstanding bill of $6,211 and the tenants were ordered out by the city for safety reasons. Foreclosure proceedings were also initiated on a loan of $269,000.
In November 2009, Lakewood Municipal Court Judge Patrick Carroll signed a search warrant permitting city representatives to enter and inspect the property. The city declared the property a public nuisance a month later and served written notice to the owner of its intent to repair or demolish the property. In March 2010, the city issued the same notice to Florida-based Bayview Loan Servicing, the holder of the property’s mortgage.
Bayview Loan Servicing (doing business as IB Property Holdings, LLC) acquired the property at sheriff’s sale for $60,000 in May 2010. It claimed it never received the city’s public nuisance letter and wanted to repair the structure and put it on the market, but was open to a “negotiated transfer” of the property to the city.
In June 2010, the mortgage company filed an appeal of the nuisance designation in the Cuyahoga County Court of Common Pleas and requested an injunction and temporary restraining order preventing demolition. It claimed the structure did not meet the definition of a public nuisance and the city’s demolition estimate of $66,380 (including $25,000 for asbestos removal) was excessive. The judge in the case issued a temporary restraining order, and the two sides met to discuss the situation.
After meeting on June 28, 2010, Bayview agreed to get insurance for the property to protect the surrounding properties from any damage that might occur. Both sides agreed that in the event the vacant structure caught fire, the city’s fire department would not enter the building due to its hazardous nature.
Bayview acknowledged “that the manner in which the structure was secured has rendered the property more hazardous for an interior fire attack and that entry into the structure in the event of a fire would subject the firefighters to imminent danger.” More notably, all parties agreed to leave the property untouched unless instructed to do otherwise by the court.
Bayview consented to an inspection of the property on August 6, 2010 by city building and county health officials. Mark Siefert, of the Cuyahoga County Board of Health, wrote the city regarding his observations:
“These units must be thoroughly cleaned of all debris, rotting food, clothes, syringes, any mold or bacteria covered wood and other items, etc. The units need to be treated by a licensed exterminator as I observed a number of different insect infestations. I strongly recommend that the sewer lines for the building be inspected…as I observed evidence of a sewage back-up. I also observed evidence of water intrusion that has caused mold/bacterial growth. These basements should also be sanitized.”
The city issued a building code correction notice to Bayview on August 16, 2010 based on the inspection results. A couple of weeks later, Bayview filed a court notice indicating the city would not work with them “in any fashion to allow the repairs on the property to be performed.”
Bayview’s court appeal is still pending. The city is scheduled to submit a brief in opposition to Bayview’s request by March 4th. Bayview is current on property taxes, but owes a couple of hundred dollars in criminal nuisances fees.
City sells one of the houses it bought and rehabbed
According to data from the Ohio Department of Taxation, the median sales price of residential properties within the city sold through the first six months of 2010 increased over last year.
|*Through the first half of 2010|
Among the homes sold was the city-owned house at 1300 Andrews Ave. The city acquired it a little over a year ago for $52,000. The property received extensive interior and exterior renovations. It was placed on the market this summer for $149,900. It sold for $132,600 in December 2010 to Catlin Dirk and Anthony Diaquila. Records on file with the Cuyahoga County Recorder indicate the couple has a $129,238 mortgage and a $10,400 loan from the city.
The asking price for 1598 Wyandotte Ave., another property the city has rehabbed, dropped from $139,900 to $129,900.