08 - Forgiveness of Civil Penalties - 1421 and 1431 N.E. 7th

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Item No. 8 TO: City Council Gene Anderson, Interim City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: Proposed forgiveness of civil penalties on property located at 1421 and 1431 N.E. 7th Street DATE: March 4, 2020 BACKGROUND: In January of 2013, the Building Standards Commission issued an order of demolition on a residential structure located at 1421 and 1431 N.E. 7th Street, which order included the automatic assessment of civil penalties in the amount of $1,000.00 per day if the work was not completed within 30 days. The prior owner, now deceased, failed to demolish the structure, and city did so at the cost of $627.00. There is, accordingly, a dangerous structure lien on the property in that amount that has accrued interest making the total due as of this writing $1,017.50. The present owner inherited the property and would now like to sell it. (In addition to the lot upon which the structure was demolished, there is another residential structure.) Unfortunately, the order for civil penalties is still attached to the property, and between the date the civil penalties began accruing and the date of demolition, civil penalties in the amount of $173,000.00 had accrued plus 10% compounding interest, which is far in excess of the value of the property, listed by the Lamar County Appraisal district at $34,430.00. STATUS OF ISSUE: The current owner has asked that the city forgive the civil penalties and interest accrued on the property so that he might sell it. There is a public purpose in forgiving the civil penalties in that doing so will allow sale of the property to an owner who can maintain the existing residence, maintain or increase its taxable value, and thus contribute to the well-being of this neighborhood. The owner will pay the demolition lien plus interest and is not asking for a waiver of that lien. BUDGET: No discernable impact; council would be forgiving hundreds of thousands of dollars in penalties and interest, but those penalties and interest would be next to impossible to collect given how many times they exceed the value of the property itself.