Loading...
12 - Release of Lien-Waiver Request - 1567 S. Main StreetNo. 12 Memorandum TO: Mayor, Mayor Pro Tem & City Council FROM: Grayson Path, City Manager SUBJECT: Release of Lien / Waiver Request DATE: September 11, 2023 BACKGROUND: In May 2006, the City of Paris demolished a dangerous structure located at 1567 S Main Street (LCAD #19991) and applied a lien against the property on June 20, 2006 in the principal amount of $1,469.65. The lien has continued to exist on this property, unpaid, since that time. The taxes have all been paid and any other nuisance violations that may have occurred along the way have also been paid. The Buildings and Standards Commission (BSC) ordered the structure to be demolished on February 20, 2006, giving it 30 days otherwise a $1,000/day civil penalty would take place. Based on the timing on when the structure was torn down (May 8, 2006 = 77 days after the BSC, thus 47 days after the 30th day), there would be $47,000.00 in civil penalties in existence on this property. STATUS OF ISSUE: Ms. Betty Stokes, who resides in California, is listed on the property with her late mother, Enola Lyons. According to Ms. Stokes, this house was her grandmother's, however her mother (Ms. Lyons) moved to California in the 1940s, and she (Ms. Stokes) was born in the 1950s, also in California. Neither lived in Paris. According to LCAD, the property entered in to their combined name in 1989. Her mother (Ms. Lyons) passed away in 2005 (a year before the house went before the BSC). Ms. Stokes claims that any notices likely went to her mother's old address, and it was not until later in time that she was contacted about delinquent taxes and high grass violations (according to our records, 2011+), which has all been paid up now (verified on LCAD and our records). She states that she was unaware that the demolition lien was on the house, so when she contacted a realtor to try and sell the property, this came up un -expectantly. She states that had she been aware of a demolition lien, she would have paid those when she paid her delinquent taxes and past -due nuisance liens in order to have stopped the accumulation of interest. She has offered to pay the principal amount of $1,469.65, but has requested the waiver of the civil penalties as well as the accumulated interest, with the release of the lien on the property so that she can sell it. She has though offered to pay up to $500.00 in interest if requested (did not say how she came to that number). There was a closing date of July 24th to Rosa Salazar, but the lien came up and so they have extended the date until this can be resolved. The selling price is $9,500.00. Ms. Salazar wishes to purchase the property and hold as an investment property. The property is currently valued at $1,130.00 on LCAD. Pursuant to City Code 4.03.009, only the City Council can consider waiving a Structure Lien. BUDGET: There is no new expense to the City in this situation to agree to releasing the lien. The principal of the lien is $1,469.65. The accumulated interest is approximately $6,129.34 (as of 9/11/23). The total of the lien is therefore approximately $7,598.99. The value of the property is $1,130.00 according to LCAD. There are no delinquent taxes and no other liens (according to our records). OPTIONS: The City Manager has developed a process he goes through for considering when (if) to forgive principal and/or interest for Nuisance Liens (liens that he is tasked with reviewing). It is not perfect, but this procedure allows him to remain fairly consistent each time. Given there are so many different factors and scenarios involved with properties all over town, the City Manager attempts to adhere to two goals: 1. Protect the taxpayer dollar — resist forgiving liens (at least the principle) whenever possible given taxpayers had expense in maintaining the property, while 2. Finding a way to get the property in to the hands of someone who will maintain — possibly develop — the property, thus alleviating the taxpayers of having to further maintain the property (note: this has not been an issue in this specific situation). Taking in to consideration both goals, the City Manager's analysis in this situation is as follows: the value of the lien (principal + interest) greatly exceeds the value of the property. Information that we do not always have is the selling price, which in this situation exceeds the value of the principal and interest. This property was allegedly the home of a grandmother, purchased by the current listed owners in 1989 (LCAD). One of these listed owners, the mother, passed in 2005 (a year prior to the BSC) and the remaining owner claims that all notices likely went to her. We have records going back to 2011 that all yard and grass notices that went out were addressed by the owner. All taxes and any other nuisance liens — only one other made it to a lien — have all been paid, therefore this property is not eligible for foreclosure and given the last remaining owner resides in California, it is likely to assume the property will sit vacant. Receipt of principle balance is always recommended as this was actual money spent by the City. Typically, my recommendation would be to consider waiving the interest given the principle + interest exceeds the value of the property according to LCAD, however, we also know the asking price exceeds this total value, which is unusual. With the above information, the City Council has at least the following options, if not others: 1. Approve a Resolution for release of the lien against 1567 S Main Street and: a. Receive payment of the $1,469.65 principle while waiving interest applied to the June 20, 2006 Structure Lien. b. Waiver of principle and interest applied to the June 20, 2006 Structure Lien. c. No waiver of principle and/or interest. d. Waiver of a portion (TBD) of the principle and/or interest. 2. Along with option #1, consider waiver of the accrued civil penalties in the amount of $47,000.00, or some sub amount of this. 3. Request additional information. 4. Do not release the lien or waive any portion of the June 20, 2006 Structure Lien. RECOMMENDATION: During my tenure with the City, the City Council has only reviewed a few requests for structure lien waivers, therefore I do not have a lot of history to go off of in regards to council policy. Pursuant to our code, principle and interest are both due in order to release the lien. However, by policy, we have considered waiver of interest from time to time (case by case), particularly when we see that the value of the property is less than the value of principle and interest, which is indeed the case with 1567 S. Main Street, and we deem it in the best interest of the city (i.e. changing hands to someone who may maintain, even develop, the property). What is different though is the selling price of $9,500.00. We have not had a selling price well over the value of the property like this (most have been right around the value of the property), therefore it is reasonable to request a certain amount of interest (if not all) be paid. Precedent could be set in this instance, at the same time, the known alleged facts (very difficult to prove — however I have had no reason to doubt what I have been told by Ms. Stokes) are what can give the council a case-by-case option for considering these in the future. With the above said, I would recommend #2 (waiver of the civil penalties — extremely unlikely to ever be paid the $47k on this property) as well as #ld and for the City Council to require payment of the principle ($1,469.65) as well as some amount of interest (perhaps half = $3,064.67). Another idea could be to split the selling price of $9,500.00, thus $4,750.00 which is greater than the principle plus '/z of interest. I would however be leery of waiving all interest, otherwise it may make it difficult to collect on interest in the future. It would also be well within the council's right, pursuant to code, to require all interest be paid. RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, FORGIVING CIVIL PENALTIES ASSESSED AGAINST THE PROPERTY LOCATED AT 1567 S. MAIN STREET IN THE CITY OF PARIS; WAIVING INTEREST ACCRUED UNDER A DANGEROUS STRUCTURE ABATEMENT LIEN ON SAID PROPERTY; MAKING OTHER FINDINGS AND PROVISIONS; AND DECLARING AN EFFECTIVE DATE. WHEREAS, on February 20, 2006, after notice, publication, and hearing as required by law, the Building and Standards Commission of the City of Paris entered Order DS06-25 ordering demolition within 30 days of the dilapidated structure located at Block 14, Lot 7 of the Texas & Pacific Addition, otherwise known as 1567 S. Main St., Paris, Texas 75460, and further ordering the imposition of civil penalties of $1,000.00 per day for each day the structure remained on the property after the expiration of the 30 day deadline; and WHEREAS, the City of Paris demolished said dangerous structure on May 8, 2006 and thereafter filed a structure abatement lien against the property in the amount of $1,469.65; and WHEREAS, said principal amount of $1,469.65 has accumulated interest to date in the approximate amount of $6,129.34 (as of September 11, 2023); and WHEREAS, the period between the expiration of the 30 day period to demolish and the date of demolition was 47 days, during which civil penalties of $47,000.00 plus interest accrued pursuant to Order DS06-25, which civil penalties have continued to accrue interest.- and nterest;and WHEREAS, all other liens assessed against the property and the taxes have been paid; and WHEREAS, the current owner, who resides out of state, wishes to sell said property and has agreed to pay the principal amount of the lien, thus repaying the city for amounts expended, and has requested that City Council waive the interest on the structure abatement lien and forgive the civil penalties and interest, all of which far exceed the value and selling price of the property, to facilitate the sale; and WHEREAS, the City Council believes that it would be in the best interest of the city and its residents to waive the repayment of interest related to the dangerous structure abatement lien in the amount of $ IT_,„ to forgive the accrued civil penalties and interest, and to release the lien so as to facilitate the sale of the property, thus keeping it on the tax rolls, increasing its taxable value, and enhancing and contributing to the value of the area; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS THAT: Section 1. The findings set out in the preamble to this resolution are hereby in all things approved and are incorporated herein for all purposes. Section 2. The City Council hereby waives and forgives interest on the structure abatement lien attached hereto as Exhibit A contingent upon the payment of the principal lien amount of $1,469.65 plus $ representing a portion of the accrued interest. Section 3. The city attorney is directed to prepare a release for said lien upon the owner's payment in the amount of $ Section 4. The City Council hereby forgives civil penalties and interest assessed and accrued against the property located at 1567 S. Main Street by virtue of Building and Standards Commission Order No. DS06-25 in the amount of $47,000.00 plus interest. Section 5. This Resolution shall take effect immediately after its passage in accordance with the provisions of law. PASSED AND APPROVED this 11th day of September, 2023. Reginald B. Hughes, Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Stephanie H. Harris, City Attorney 00039282�3-k �C3:L R x 7d DANGEROUS STRUCTURE ABATEMENT AFFIDAVIT OF LiEN STATE MF TEXAS j COUNT OF LAMAR KNOW ALL MEN BY THESE PRESENTS: i That, the CITY OF PARIS, Paris, Texas, 1501st Street S.E., Paris, Te as, by and tHrough its' Bulldln and Standards Commission, after having given written notice of at ast thirty (31i) days (or after ha Ing given notice by publication} for the owner to repair, remove, or demolish a stlrcture or structur from the -following described lot or lots: I i '567 S MAiN, TEXAS AND PACIFIC ADDITION, BLOCK -14, LOT -7 and the 'aid OWNER of said lot, ENOLA LYONS S BETTY L STOKES, failed (or fused) with'i the time soorder' d to complete said repairs, removal or demolition after notice addr sed to such nerwas deposits d in the Post Office (or after such publication if said owners address 9 tas not known,), the City of Paris ild, on MAY 8, 2006, cause the following work to be done and paid $1463.65 for t e some: EMOLiSH/REMOVE STRUCTURE, plus $16.00 filing fee. I i accordance with -*T.". HeaNh and Safety Code, Chapter 342, a r d Article 01, ghapter 7, Code of 0fd1nances di'thb-City of..Paris, Paris, Texas, this statement executwi by ROBERTi TALLEY, Code Inssector for th'qtft "4 Pails:, is I led.with the County Clerk of Lamar County for th4 purpose affixing: privileged tienvpo»-the above described property, which lien is second only toliens and liens for street improvements, said lien being fixed for the purpose of securi g the abovelescribed expendit ire in the amount of $1468.6!% which amount shall bear Interest at the rate of to percent (10%) per annum from the 1st day 4AUGUST, 2006, that being the day of suc expenditure For any such ex,enditures and Interest as aforesaid, suit maybe instituted and foreftsure had In the name of the Cilly of Paris. -' u Sjgned on JUNE 20, 2006. ROBERT TALLEY Code Inspector STATE O - TEXAS } COUNTY' F LAMAR } } this date personally o ally apfy under peared ROBERT TALLEY a Isea[ of office an this nspector ect r forthe Ci o Pa a 20 that on P ty ris, know to me to be the pe rson whose name is subscribed to the foregoing Instrument, and signed the regoing instrumeet in writing before me and upon his/heroath stated and swore before iethatthe fa stated therein are true and correct. Stat�e�-. � Not Public of exas RETURT Robglt Talley .o tar,, c P.Cox�t�7 g PaM"TX 116987 JANICB WO"iiAM rNOTARY PL BUC 06 STATE OF T dhS ?k € oma 3sion Exon s 06.12-2D09