ST. PETERSBURG — With dilapidated properties littering many neighborhoods, a new city program could wipe out thousands of dollars in liens and assessments to help spur redevelopment.
There are more than 300 properties in the city where liens, fines and interest charges exceed the property's value. The city won't be able to collect that money, staffers say, and the liens are blocking those properties from being sold.
The City Council will vote Thursday to approve a program that would eliminate or reduce liens from the deeds. The council's Public Service and Infrastructure Committee unanimously agreed to move the measure forward last week.
Council member Karl Nurse, who has been working on the program for more than a year, admits the program isn't a quick fix for neighborhoods saturated with blight. But it's a start, he added.
"Who will buy a lot valued at $5,000 when it has $26,000 in liens?" he said. "This will help."
Hundreds of properties racked up liens and assessments when city workers mowed, demolished, secured or inspected them. The city has no power to remove liens for sewers, drainage, seawalls or drainage and dredging.
To have the entire assessment forgiven, an owner must build a single-family home on the property within one year. The liens would disappear when the owner occupies the home. Flippers and investors would not be able to eliminate the entire lien.
Applicants would have to prove they were not the property owners who racked up the liens or have any ties to the former owner.
The program would work like this:
• A property owner could pay the principal amount of the assessment as the city would waive the interest.
• Delinquent property owners could deed their property to the city to wipe out the special assessment. For example, a property who owes $8,000 in principal and $42,000 in interest could eliminate all but $5,000, which is the market value set by the Pinellas Appraiser.
• The City Council would have to approve the forgiveness of anything over $10,000. A $250 application fee would be charged.
With the inventory of houses for sale at low-record levels in the region, city staffers hope the program entices builders to buy pockets of properties for in-fill development.
Still, even as the real estate market has improved throughout the Tampa Bay region in the last year, many blighted neighborhoods lag behind the rebound.
Scott Samuels, an agent who specializes in distressed properties with Keller Williams Realty in St. Petersburg, said the program could be another tool for poor neighborhoods.
The liens, which real estate agents call "skeletons in the closet," kill many deals, he added.
"It will help move the low-end properties," Samuels said. "If we clear all these out, it helps the city and the market."
Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.