$3M bid placed Detroit properties
Detroit — Someone has placed a bid of more than $3 million for 6,350 foreclosed Detroit properties that have been bundled together by the Wayne County Treasurer’s Office.
Mayor Mike Duggan and Treasurer Raymond Wojtowicz put the mostly dilapidated and vacant properties into a package deal earlier this month in an effort to ward off speculators who can often turn into tax deadbeats. Some time late last week, someone submitted a bid of $3,183,500 for them.
“I don’t know who it is, but it was the first bid we’ve received,” said David Szymanski, Wayne County’s chief deputy treasurer.
Szymanski said Tuesday the winning bidder will have to pay 10 percent within 24 hours after the auction concludes in seven days.
There is some evidence that the offer is a legitimate one. Items such as these fall under the county’s premium auction designation, which requires bidders to pay a $25,000 deposit for the right to participate. So far, at least five parties have paid that deposit.
Having an outside interest come in and purchase those properties could be a win for the city. Detroit was expected to pay $24 million to demolish them over the next six months. Having someone else come along and take over that responsibility would allow the city to direct the money elsewhere.
Among the 6,350 properties are roughly 1,000 that are considered valuable. Whoever purchases the properties would be required to either demolish them within six months or submit redevelopment plans to the treasurer’s office for approval. Once a bid is approved, the submitting party will have to pay 10 percent of the total price as a deposit.
“I’ve heard — nothing solid, mind you — that there are several groups interested in this bundle,” Szymanski said. “It would be interesting to see what their intentions are.”
If no one successfully completes a winning bid, the Detroit Land Bank is expected to take the homes, demolish the rundown ones and auction off those that are salvageable to qualified bidders. An estimated 2,000 are vacant lots and 3,000 need to be razed.
As of this summer, nearly 78 percent of the 29,000 properties purchased at the county tax auction since October 2011 were tax delinquent.
The county expects to seize nearly 20,000 auctioned properties with unpaid bills in January. It's the first time the county has enforced a provision added in 2011 to the annual auction that requires buyers to stay current on tax bills. Generally, owners lose their properties after three years of delinquency.
More than $80 million was owed on about 22,700 properties as of June. The vast majority are in Detroit.
The county added the provision in auction sales in response to a series of Detroit News reports about buyers who shed their tax debts by buying back their own foreclosed properties at public auctions. County officials said they hoped cities would enforce the rule and took action when few did.