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Posted on Tue, Mar 1, 2011 : 2:47 p.m.

Tax foreclosure numbers grow in Washtenaw County as property owners face March 31 deadline

By Paula Gardner

The clock reset today on Washtenaw County property owners who still owe back taxes dating to 2008: By March 31, if the bills remain unpaid, they’ll lose the properties to tax foreclosure.

The list of properties facing the deadline include a downtown Ann Arbor office high-rise, a troubled downtown Ann Arbor bar, nearly three dozen townhouses in Ypsilanti Township’s condemned Liberty Square and about 500 subdivision and condo lots.


The former Greek Church in downtown Ann Arbor started the year on the tax foreclosure list, but the 2008 tax bills were paid on Feb. 22 — averting a tax foreclosure sale.

Paula Gardner |

How many of those properties will reach a tax foreclosure auction later this year won’t be known until the Washtenaw County Treasurer’s office closes on March 31.

Yet so far, the numbers of properties affected are ahead of last year’s record-setting pace, said Treasurer Catherine McClary.

“There’s an increase in volume and a drop in redemptions,” she said Monday.

By today, three different tax years converge on the calendar:

• Anyone with unpaid taxes from 2008 are in tax foreclosure and have until March 31 to redeem the property with full payment. • Any unpaid 2009 taxes now move into forfeiture, and the unpaid balance is subject to increased penalties, including an interest rate of 18 percent, which retroactively affects the full balance. • All taxes that went uncollected by municipalities in 2010 are being turned over to the county for collection, with fees including a 12-percent interest rate.

Last year’s tax foreclosure included 515 properties - or 55 percent of all the properties facing tax foreclosure since 1997.

This year, the tax foreclosure season started with 807 properties on the list.

Of those, McClary said, “550 are undeveloped subdivision sites.”

And after talking to developers, lenders and other agents for the properties, she’s realized that last year’s situation with two banks letting undeveloped property go to auction is bound to be repeated this year.

Last year's auction included 218 lots in Wellesley Gardens condos went to auction - with multiple price drops - and 31 acres in Uptown Village in Milan.

Unbuilt projects with multiple lots that entered the tax foreclosure process this year include Lincoln Pines condos in Augusta Township, York Meadows in York Township, Diuble Meadows, Lakewood Villas and Lakewood Estates in Ypsilanti Township and Rivergrove Townhomes.

“We believe the banks will pay on 150 of them,” she said, meaning that at least 400 lots will head to auction later this year.

The volume comes with a determination by the lenders, she said, “that undeveloped land is no longer worth developing.”

That’s not a surprise to Ann Arbor developer Ed Shaffran, who’s watching the housing slowdown continue - and continue to affect the developers who are holding the thousands of developed lots and vacant land in Washtenaw County.

“The bank must be saying, ‘What are we going to do with them?’” he said. “With all of the overbuilding that we experienced, I think the banks are finally stepping up and saying, ‘we’re done.’”

If the answer is just pay the holding costs for multiple years, the alternative has to be appealing, he said. That’s true especially if they’ve already written off the loan.

“If they don’t pay taxes, they’re done with other liabilities,” Shaffran said.

Commercial properties also have crept onto the tax foreclosure list in recent years, like in 2010 when a vacant gas station in Ann Arbor went to the highest bidder in the county’s online auction.

This year’s list of commercial properties also includes development projects that have gone unbuilt. However, since January, several owners or lenders have made payments on some key properties.

Among them:

• The former Greek Church on North Main and West Towne Condominiums, both Mike Concannon projects. • Property in Milan owned by REI, which once was planning a massive residential and commercial project. • Glen Ann Place, a total of five undeveloped parcels near the University of Michigan medical campus. • Hillside Terrace, a senior residence west of downtown Ann Arbor; owners averted a tax foreclosure with a $100,303 payment on Feb. 4.

Yet several commercial buildings remain on the list across various communities.

They include:

• 201 E. Washington, the Washington Square office building, which has outstanding debt of $89,913 dating to 2006, according to county records. • 210 S. Fifth, operating as the Fifth Quarter, which owes $159,361 for both 2008 and 2009. Owner Jeff Starman said by e-mail that he’ll make the payment by March 31. • 435 W. Eight Mile at US-23 near Whitmore Lake, a former factory that was demolished for development. Owner Earl LaFave owes $120,782 from 2008, according to county records, and $216,132 through 2009.

Some owners are letting tax payments slide to buy them time during the economic downturn, McClary said. It’s an expensive option, developers say.

“There are some local people who have overextended,” McClary said. “… They’re probably making a decision to pay or not to pay. If the decision is to pay, they’ll be scrambling every which way to come up with the money.”

Many residential properties also are on the list - including 33 more townhomes in Liberty Square, which was partially auctioned in 2010 - just before Ypsilanti Township started condemnation proceedings.

The auction is a formality, just as the redemption period before it: “It’s every person’s right to redeem,” McClary said.

While investors may consider the tax foreclosure auction to be a good source of discount real estate, the month before the March 31 deadline also may be filled with concern among individuals who face losing homes.

McClary said she withheld 547 properties from foreclosure this year, “and the vast majority was for financial hardship.”

She stressed that the county is prepared to help individuals faced with having to move from their home, whether owned or rented.

“We will help tenants move to other housing,” she said.

Paula Gardner is Business News Director of Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.


Dog Guy

Wed, Mar 2, 2011 : 10:11 p.m.

Taxes for green ephemera, for crappy sculpture and butt-ugly architecture, for low-income lifelong housing, etc. are job security for the poverty industry. It is a wonderful self-feeding system. Families, not just investors, are being foreclosed.

Tom Whitaker

Wed, Mar 2, 2011 : 4:43 p.m.

@Dennis: You are reading an awful lot into a simple request for the list Ms. Gardner repeatedly mentions in the article. I am not a "gravedancer"--the term given to real estate speculators who buy up foreclosed or otherwise financially distressed properties at a bargain. My interest is in all these vacant lots and buildings around town that have approved or pending site plans with the City for developments that appear likely to never get built. There are some in this town who think that Ann Arbor is a boom town, but these projects that have failed to proceed, or ones that did proceed and failed (like Ashley Terrace) seem to prove the opposite. I want Ann Arbor to be a successful community, but clearly we have gone astray with these overly ambitious proposals. When our City Council bends over backwards to give these developers tax breaks, discounts on fees, and other considerations, yet the developers can't be bothered to pay their property taxes, that is troubling to me. Meanwhile, some of these buildings sit open to the weather (Gallery--former Greek church) and susceptible to vandalism and fire (Near North--vacant house fire). There seems to be very little interest on the part of the City as to the viability of these projects, the financial status of the developers, their tax payment status, or the scars they've left on our City while their speculative schemes lay in ruins.


Wed, Mar 2, 2011 : 5:24 p.m.

Then please accept my apology....and you're right. Ann Arbor is not a boom town. I have watched for more than 30 years as tax abatements have been given to corporations. These tax incentives are to help create jobs (not low paying service) yet for years the Big 3 have taken these incentives and continued to send these jobs to other companies in other countries. Is it any wonder that families can not make their property tax payments. The problem that we have is that most of these "investors" are LLC's and there is no way to get to them as individuals. They are not losing their homes or incurring any personal loss. There is where we need to look to improve the "shared sacrafice" that Mr. Snyder is after.


Wed, Mar 2, 2011 : 4:18 p.m.

Well it appears that the staff of did not like my response to Mr. Whitaker's request for information regarding the listing of tax foreclosed homes in the county. I hope that they never have to defend their "freedom of speech" without even being given an explanation. The comment was not intended as a personal attack on Mr. Whitaker but a commentary on the state of uncaring attitudes of the self-proclaimed Christian in our country. Let me try again ! What I asked is: if running out to buy "tax" foreclosed homes was the Christian thing to do. After all wouldn't the Christian thing be to help our Brothers in their time of financial need? GREED is a sin, and goes against every principle that I was ever taught as a Christian. Jesus, did forgive the prostitute, heal the lepers, and multiply the fish and bread to feed those that had nothing to eat. He did, however, drive the money-changers from the temple for their GREED. That seems to be the prevalent attitude of those of us that loudly claim that we are Christians. What if we had a foreclosure sale and no one showed up? That would stop the sales cold. Instead we sit around rubbing our hands gleefully, while we try to figure out how fast we can "flip" the property. Maybe if we worked to solve the problem instead of trying to make a fast profit we would all be better off. Think about it the next time you're in church. Maybe Jesus will teach you Christian compassion.


Wed, Mar 2, 2011 : 6:47 a.m.

Great - more foreclosures to drag down the value of non-foreclosure sales. The county does know that appraisers must use these sales if nothing else is available as comparable sales, right? That limits the sale price of other properties, if financed. Many property sales become foreclosures or short sales these days, true, except long-owned properties with equity or those sellers willing to fork out lots of cash at closing. I know the county needs money but a lot of banks will keep paying the taxes long after the owner has stopped paying the mortgage. I hope they are taking that into consideration.


Wed, Mar 2, 2011 : 5:05 a.m.

foreclose on ALL of Washtenaw County including Gov. Snyders house


Wed, Mar 2, 2011 : 3:46 a.m.

So Mr Briegel would you have us become a "Godless Communist China" so we can win? ( we are headed that direction) Why is it we never hear Mr Briegel denigrate John Kennedy or Lyndon Johnson? It would seem that he would be at least a little upset with them. But then they were of the enlightened side of the isle! And it would not look good for him to belittle them!


Wed, Mar 2, 2011 : 3:34 p.m.

Mr Briegel How quickly you forgive Kennedy and Johnson for the live they cost our country! Hypocrisy at its height!

David Briegel

Wed, Mar 2, 2011 : 9:48 a.m.

Actually, you missed the point entirely! Godless Communist China won the cold war by winning the favor of Walmart and the rest of the "enlightened" American Exceptionalist Fortune 500 by providing them with child labor, slave labor, prison labor, plundering the natural resources and polluting the environment! You know, America's traditional values!! We do like cheap stuff. Why wouldn't we want to bring them up to our standards instead of lowering ours? And you are correct, compared to what Reagonomics has done to our once proud nation, JFK and LBJ are saints!

David Briegel

Wed, Mar 2, 2011 : 1:04 a.m.

China, I get really angry when I remember the 55,000 names on that granite wall in D.C. who are there because of the big lie to stop the spread of Communism. And every day the delusional amongst us celebrate Ronnies victory in his Cold War. Pure delusion! The clear victor is Godless Communist China. And every Walmart sale sullies the memory of those who sacrificed for that folly. They lost in Vietnam. But their worst loss was to Walmart and the rest of America's Fortune 500 whose values are represented by China!! Shame on them!


Wed, Mar 2, 2011 : 12:13 a.m.

The old Main Street Greek Revival Church would make a fantastic Arts Complex if it can be restored.


Wed, Mar 2, 2011 : 6:35 a.m.

It's a fabulous landmark facade - someone with vision and a realistic budget could save it, I am persuaded.

John B.

Wed, Mar 2, 2011 : 12:37 a.m.

My concern would be that the roof's dome looks like it's full of holes now, which won't keep the weather out....


Tue, Mar 1, 2011 : 11:48 p.m.

A perfect example why we cannot countenance any more taxes in any form. The smallest increase will only shake the bush a little bit, but that little bit will cut loose a ton of properties on the edge. Picture a light breeze on a fall day. It doesn't take much to get those leaves to fall.

David Briegel

Wed, Mar 2, 2011 : 3:46 a.m.

And your party wishes to tax them more so that billionaires and multi-millionaires aren't taxed any more. That is repugnant to many of us.


Wed, Mar 2, 2011 : 3:21 a.m.

Mr Briegel I'm sorry. Your logic totally mystifies me. I simply cannot understand your line of thinking. We have people here in Washtenaw Country (try to stay on topic) who are losing their homes because they cannot even afford to pay their taxes. These ARE the little guy. A friend of mine told me just yesterday that he and his wife will be losing their home after being in it for 19 years. So what the heck?

David Briegel

Wed, Mar 2, 2011 : 2:17 a.m.

You know very well as does every single American whose taxes should go up. Your vision is to support the wealthy on the backs of the disabled, disadvantaged and the poor. Bless you.


Wed, Mar 2, 2011 : 2:02 a.m.

Mr Briegel So, your solution would be to raise taxes more? Those that are pinched the hardest will have to ante up more? When their backs are to the wall?

David Briegel

Wed, Mar 2, 2011 : 1:07 a.m.

To whom much is given NOTHING can be expected. I remember when my minister taught me what Jesus spoke!! Just cut those taxes more. And I'm certain it will all just trickle down in the form of foreclosure, bankruptcy and minimum wage jobs! At best!!


Tue, Mar 1, 2011 : 10:42 p.m.

Stop buying for China and you will have jobs. Everyone wants it a cheap as possible and you do not care who you put out of work. People in Ann Arbor want you to buy local but they drive foreign cars and buy your cloths from China , Vietnam and anyone other communist country. At one time we hated them now we sleep with them.


Wed, Mar 2, 2011 : 6:33 a.m.

Walmart is now struggling with the dollar store successes. Where does it end?


Wed, Mar 2, 2011 : 2:55 a.m.

mrmoose, perish the thought that American workers would be willing to compete in a free, non union, marketplace. You want your cake and eat it too while the rest of the world is eating your meat and potatos. The fact that you think consumers, who are struggling, should pay more so you can enjoy the good life is amazing. Good luck with that condencending attitude of yours.

joe golder

Wed, Mar 2, 2011 : 2:13 a.m.

You said it all AJ. Thanks!!!! I can go to bed and not sit here ranting. We reap what we plant.


Tue, Mar 1, 2011 : 11:48 p.m.

We did this to ourselves and China just kept on supplying to us and why wouldn't they? Keep buying gas guzzlers and send even more of our American dollars over seas for oil. People just didn't get it, I sure hope they enjoyed those "good carefree times" for all of us. For the American consumer its always been about price which is why WalMart became so popular even though the products they sell are different (crappier) than the ones sold by the same brand outside the store. No one cared that the washer or dryer wasn't made in the US anymore and no one repairs anything, just throw it away and get another. We did build very high quality products in the 50's and 60's and even somewhat in to the 70's. I've got a Zenith (built in USA) 25" top of the line TV that has outlived several other throw away brands. We've built good HD vehicles and pickup trucks but thats about it up until very recently but its too late, we already gave the store away. Enjoy being a minor player now in the global economic engine America. All we have to offer is our debt which isn't worth the paper its printed on.


Tue, Mar 1, 2011 : 10:03 p.m.

I wonder how many more Hardship forms have been applied for lower taxes

Paula Gardner

Tue, Mar 1, 2011 : 8:52 p.m.

Tom, I've been using a print copy that was inserted into the Washtenaw County Legal News at the end of December. @linuxtuxguy, thanks for the catch. Made the correction.

Paula Gardner

Wed, Mar 2, 2011 : 4:36 p.m.

The list I'm using is 44 pages long, thanks to the full legal descriptions - and, because some people are redeeming the properties, it's constantly changing. I would expect the county clerk or treasurer to have a copy or two available in their offices. Once the process clears and the redemption period ends, we'll know exactly what is going to auction. I'll report that list, hopefully by mid-April.

Tom Whitaker

Wed, Mar 2, 2011 : 4:15 p.m.

I have online access to the Washtenaw Legal News, but was unable to find the list in any of the archive issues from last December. Ironic that this publication is supposed to be a substitute for publication in a newspaper. I wonder if the public can access it at the public library instead of paying the pretty hefty subscription costs. Anyway, attaching the list to the story would be helpful.


Wed, Mar 2, 2011 : 4:07 p.m.

Is that online or is there a way you can print that list? I am extremely interested in knowing what buildings are going up for auction

Tom Whitaker

Tue, Mar 1, 2011 : 8:45 p.m.

Where can we go to view the list of properties facing tax foreclosure that you refer to in this article?

David Briegel

Tue, Mar 1, 2011 : 8:43 p.m.

Just more proof that tax cuts don't help the economy! Forecllsure and bankruptcy is what "trickles down"!


Tue, Mar 1, 2011 : 8:13 p.m.

"Some owners are letting tax payments slid to buy them time..." Shouldn't the word be "slide?"


Tue, Mar 1, 2011 : 8:08 p.m.

Answer to the problem? Jobs, Jobs, Jobs.