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Posted on Sun, Apr 24, 2011 : 5:55 a.m.

Tax foreclosures set Washtenaw County record in 2011: Auction dates next

By Paula Gardner

Tax foreclosures for unpaid property taxes set a Washtenaw County record this year, with officials assuming ownership of 639 parcels following the March 31 deadline.

The number tops the 391 properties that went to tax foreclosure auction in 2010 — and also exceeds the combined 539 properties that were lost to back taxes in Washtenaw County since 1997.

The dollar value of the unpaid taxes for all of the properties is about $5 million, said Treasurer Catherine McClary.

And the situation reaches across jurisdictions: “Virtually everyone was affected,” she said.

Notable exceptions were Saline, Chelsea and Pittsfield Township, which was host to the largest commercial tax foreclosure auction in the county in 2010 when undeveloped lots in Wellesley Gardens were auctioned.

McClary is compiling information on the properties and visiting each, in preparation for releasing a list detailing the type of property and how much is owed on it.

That should be done by June, she said, in anticipation of the online auctions — with starting bids at the amount owed for back taxes — starting in July.

So far, the types of properties include numerous undeveloped subdivision lots, which McClary describes as “the vast majority.”

Also emerging as a trend is the willingness of lenders to forgo paying the back property taxes to hold onto equity in the property. Falling values — particularly for development property — is prompting banks to “cut their losses” and sever the connections to a property by not paying the back taxes after a mortgage foreclosure.

“I have not yet visited a property that wasn’t a bank walkaway,” McClary said.

The sheer volume of properties heading to county auction this year is forcing McClary and other officials across the county to consider how to maximize sales totals for the properties, with the goal of covering all of the outstanding tax debt.

Two properties are former gas stations, so McClary is working with the Brownfield Commission to do a Phase 1 environmental assessment report, which would outline the condition of the property for a buyer and potentially remove liability for future cleanup.

Packaging the subdivision properties to make them attractive to smaller builders who might be more likely to buy less than an entire subdivision could be a strategy this year, too, McClary said.

And at least one of those properties — near Textile and Tuttle Hill in Ypsilanti Township — could be eligible for purchase by the county’s Natural Areas Preservation Program, funded by a countywide millage.

About 25 properties headed for tax foreclosure auction are in the city of Ypsilanti, a number close to the 2010 total, said Teresa Gillotti, city planning director.

“All of them are either houses, houses that should be demolished, or vacant (residential) land,” McClary said.

This year, the city and the county will collaborate on marketing those properties in a separate auction, scheduling open house tours and making the properties available for inspections — something normally not done in the “as-is” foreclosure auction.

“Some are in great condition,” Gillotti said, “some less so.”

The effort, she said, could result in fewer national speculators attracted to the auction, instead possibly encouraging more local ownership.

“We’re trying to be a little strategic,” Gillotti said.

With the online auction, “it seems like a lot of people are looking for good bargains, good deals,” she said.

By opening up the process so that zoning, condition and other concerns can be answered ahead of a bid, “we’re hoping to encourage buyers to think it’s less risky,” she said.

Meanwhile, many high-profile properties that were on the tax foreclosure list in early March came off it when the owners paid at least the 2008 taxes by the March 31 deadline, McClary said.

Among them: Several Ann Arbor commercial buildings and residential rentals, including the former Fifth Quarter, McClary said.

A total of 168 properties with 2008 taxes past due were redeemed in the last month before the March 31 deadline, McClary said. And earlier this year, she reported that the county is still owed about $30 million on unpaid 2010 taxes.

Paula Gardner is News Director at Reach her at or 734-623-2586.


larry kramer

Mon, Apr 25, 2011 : 4:37 p.m.

Dear Ghost--Homes are taxed at what the city says they are worth--not what they are truly worth. So are you making up stuff here? My house is taxed at a value of $240k. I appealed, finding 5 homes similar to mine that sold for an average of $175k. I presented documentation proving my case. My appeal was denied. No explanation, no documentation to support the city's position. Just complete arrogance--were you on that appeal board?


Sun, Apr 24, 2011 : 3:08 p.m.

My house in Ypsi township that I paid close to $120,000 for 3 years ago is now worth about $70,000 at most and I still pay close to $3,000/year in property taxes. I'm told my taxes are that high because of all the "services" Ypsi township provides, such as 24hr police and fire protection, a beautiful library, lots of parks, etc. It's funny because I clean the broken glass out of the park behind my house by myself, the roads in the township look like the roads in Iraq, criminals rob houses around here at will, and I hear gunshots at night from my back porch. 24hr Police and Fire protection, huh? Ha ha ha, what a joke, although perhaps I shouldn't be laughing because the joke is on me and everyone else who lives here. Ypsi City and Ypsi Township will not attract the type of people who are willing to pay higher taxes unless they confront the crime and blight problems that are destroying our community. Or maybe the township can just buy our houses from us and turn them into more of that low income housing I always hear politicians saying we need more of. That's another funny issue, as most of the regular people I talk to around town agree that we have too much low income housing and that it contributes to much of the crime we experience. West Willow, Danbury Green, Sycamore Meadows, Tuscan Creek... the police found a body in the woods between the Meadows on MI Ave and Tuscan Creek about a week ago and anyone who reads the crime blotter knows the other three locations. Great places, huh? We definitely need more of them.


Sun, Apr 24, 2011 : 10:29 p.m.

You can add me to the list of people who's taxes went up while my value went down. I guess it depends on your view of the situation. I viewed it as my taxes were still lower than they would have been had prop A not passed.

Edward R Murrow's Ghost

Sun, Apr 24, 2011 : 9:11 p.m.

The key question here, eyeheart, is what does he mean by "worth"? Assessed value? Taxable value? His spitball of the price he thinks he could get for the house today? My point was that, thanks to Prop A, the gap between assessed value and taxable value grew, sometimes by tens of thousands of dollars, the latter always being less than the former. The taxes paid, then, did not reflect the actual value of the property. Then, when housing bubble collapsed, the assessed values began to fall but taxable values kept rising (and will keep rising) until the gap between the two was closed. So there was the incongruous situation of one's property taxes actually going up while property values were falling. I know many, many people who have found themselves in that situation. Good Night and Good Luck


Sun, Apr 24, 2011 : 8:54 p.m.

ERM; sounds good on paper, but the truth is that you pay the LOWER of 1/2 your assessed value OR the taxable value of your house, which can increase at a MAXIMUM of 5% or inflation. So, rather than complain about prop A if your taxes are not falling, you should be happy, because it means you are still paying less than the SEV. I'm not makin' it up: <a href="" rel='nofollow'></a> Does a good job of explaining it. Ryan, if you feel you are paying on more than 1/2 the value of your house, you should try to appeal your assessment. Not sure how successful you will be, but if you don't at least try, you can only blame yourself.

Edward R Murrow's Ghost

Sun, Apr 24, 2011 : 3:29 p.m.

Your taxes are that high, my friend, due in part to Prop A. When property values rise, Prop A puts the break on the rise in taxable value, thereby slowing the rise in your tax bill. When property values fall, it works in exactly the opposite manner. Real property values fall faster than do the taxable value, the result being that your tax bill falls more slowly than it should. Ain't Prop A great????? As for the rest of it, your post makes clear the vicious circle in which Ypsilanti, Detroit, and Flint find themselves, not to mention other cities around the state and nation. Due to crime, etc.... it is less and less a desirable place to live and do business. Raise taxes to pay for this and more businesses and people likely will leave due to increased taxes and no perceived short-term gain. Reducing taxes means reducing polices services, etc.... (at least for the short term) which will also result in families and businesses leaving. Hence the solution for those cities that have problems like those of Ypsi likely do not lie solely (or even mostly) with local solutions. Good Night and Good Luck


Sun, Apr 24, 2011 : 2:20 p.m.

U.S. corporations pay no federal taxes.


Sun, Apr 24, 2011 : 1:22 p.m.

Let us hope the economy comes roaring back and these properties return to use and the tax rolls. Empty houses in good neighborhoods drive down the value of the remaining houses. Getting people to move into these homes will help stabilize these communities.