City gives family a Grand deal
The Newburgh City Council is eager to get some of its city-owned properties back on the tax rolls.They are so eager that they have accepted an offer to buy 296 Grand St. for $25,000 — even after learning that family members of the prior owners can’t come up with the full $25,000. The family can only scrape up $15,000 Councilman Curlie Dillard told the council, which in turn said it is willing to give the family two years to pay off the extra $10,000.
Dillard and Corporation Counsel Michelle Kelson had different recollections of what had been discussed about the possible sale.
Dillard said allowing the family to finance the extra $10,000 had been discussed in executive session.
“No it wasn’t,” Kelson said.
“Yes it was,” countered Dillard. “I suggested it.”
Dillard then said he wanted to take the discussion to executive session, only to be told by Kelson that “there is no basis for an executive session.”
“Why?” queried Dillard.
“Because it doesn’t qualify for any of the categories for an executive session,” the city’s top lawyer offered.
“OK, let’s do right here, then,” Dillard said.
“No, no,” said Kelson. “We’re bringing you an offer [from the family].”
City Manager Rick Herbek entered the conversation in an effort to get it back on track.
“So, the family offered $25,000, but they only have $15,000 …”
Mayor Judy Kennedy, who lives nearby, offered the fact that “that house is in pretty bad shape. Is that right?”
“It is the right house,” said Dillard, “but they are trying to make it work.”
“If they don’t have the money to buy it, how can they afford to fix it?” Kennedy asked.
“One of the problems we’ve had in the past is people getting property that they couldn’t actually [afford] to fix them up and two or three years later, they deteriorate and they are right back in the same spot.
“Before we go ahead with this …”
Dillard took exception to the mayor’s line of questioning.
“When have we had this problem?” Dillard demanded. “When have we had this problem?”
“Well, if you’d like me to look that up I will,” said Kennedy.
“Look it up, please,” Dillard replied.
“This is one of the properties that the city has had for several years,” Michelle Kelson said in an effort to help clarify the situation.
“Courtney Kain managed the properties through the CDBG. She has been working … discussing the potential sale with these … occupants and so, if we … and we also put the property up for sealed bid and they did make an offer with a sealed bid and when we rejected the sealed bid offers, the reaction was to go back to this particular group of people and see if they would be interested in raising the purchase price they had offered so that we could negotiate a private sale. That was the last direction that we received from the City Council when Courtney and I were sitting at the council table in January,” Kelson said.
Gay Lee then said, “I don’t understand what the problem is.”
Kelson said that it hasn’t been the City’s position to hold a mortgage on a property.
“Generally, when we negotiate a private sale, you usually pay the full purchase price at the time that you close.”
That’s one way to do it, she added.
“This is the first time that I’ve heard that after making the offer of $25,000 that they don’t have the money together. We could give them more time to gather the money.”
“We could also lower the price a little then,” suggested Councilman Dillard.
“Well, ten [thousand] was already rejected,” Kelson said, “and they were asked to make a higher offer.”
“And they made an offer of 25 which they can’t afford,” Councilwoman Lee interjected.
“That’s the first time I’m hearing that they don’t have the 25 that they had previously offered,” said Kelson.
“They have 15,” said Dillard.
It was explained that the owners of the property died and the tax bills continued to go to the decedents but there was no one to pay the bill and the property ended up being taken for unpaid taxes while relatives of the legal owners continued to live in the property.
“Until the will gets to probate, there is no way to transfer the property,” Kelson said, “and the City ends up with the property.”
The property needs substantial restoration, “and the family would have to pay the taxes going forward,” Kelson said.
“I think it is a legitimate question whether the family has the financing to make it work.”
Councilwoman Lee asked the council if anyone would have an objection to selling the property to the family for $15,000?
“I don’t have an objection,” said Mayor Kennedy, “if we put some stipulations on it that certain renovations have to be done within 18 months, that they will, in fact, get this house up to code, because it does not meet code at this time. There are some serious issues with that house and I want to make sure that we’re getting the house put back together.”
“I think in the majority of houses in Newburgh there are some serious issues,” countered Dillard.
“I say we vote and give it to them for $15,000.”
“I’m fine with that,” said Lee.
Councilman Cedric Brown, asked by City Manager Herbek if he had an opinion in the matter, said he had no objections to giving it to the family for $15,000 but that he would prefer getting the other $10,000.
Lee agreed with Brown.
“I’d like to get the other ten,” she said.
“We’re not in the business of holding a second mortgage,” said Brown, “but we can.”
Monday night, the council agreed to sell the property to the family for $25,000 with $15,000 down and the remaining $10,000 to be paid over a two-year period.
By ALLAN GAUL