11 - Private Re-Sale of a Tract of Tax Foreclosed Property - Westgate Apartments

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Item No. 11 TO: Mayor & City Council Grayson Path, City Manager FROM: Carla Easton, PE, Engineering & Community Development Director SUBJECT: WESTGATE APARTMENT PROPERTY SALE to RAIN FINANCIAL SERVICES, INC. DATE: June 8, 2020 BACKGROUND: The Westgate Apartments are located at 635 7th N.W. in Paris, Texas. The apartments have been abandoned for several years and are in a state of disrepair. The City has been working diligently to address this issue including abating the property on three different occasions. Working with the City's Delinquent Tax Attorney Tracy Pounders of The Pounders Law Firm, the property was filed in court for delinquent taxes and, pursuant to approval of the Judge, put up for sale. In January 2020, an attempt was made to auction the property at a tax sale, but no buyers presented an offer so the property was bid -off to the City as trustee for itself, Paris Junior College, Lamar County, and Paris ISD, each of whom are owed delinquent taxes on said property. Since that time, the property has been advertised for sale by the Pounders Law Firm, in hopes of finding a buyer. Over the past four months, several investors have shown an interest in the property, but were discouraged by the condition of the property and estimated cost to revitalize it. Most wanted to acquire the property for low cost/no cost through an agreement with the city rather than purchase outright. STATUS OF ISSUE: On May 10th, a formal written offer to purchase the property was received from Rain Financial Services, Inc. in the amount of $75,000.00. This is the only actual offer to purchase the property to date. Mr. Pounders has reviewed the judgment and tax liens, and he estimates the city to receive a prorated amount of $14,000, assuming all taxing entities accept this offer. The Rain Financial Services, Inc. is a group of motivated investors from the Paris Area who want to give back to the community by restoring the property as an affordable housing development.