HomeMy WebLinkAbout[09a]Liberty Pointe
Council Agenda Item
MEETING DATE:
December 5, 2013
AGENDA ITEM:
Liberty Pointe Assessment Charges
SUBMITTED BY:
Administration / Finance
BOARD/COMMISSION/COMMITTEE RECOMMENDATION:
None
PREVIOUS COUNCIL ACTION:
The City Council assessed the properties in the Liberty Pointe
development for the infrastructure development in 2002. In 2013, the City Council waived the penalties
and interest associated with Outlot B in Graceview Estates.
BACKGROUND INFORMATION:
As part of the development of the Liberty Pointe neighborhood
the Developer, Signature Homes (operating as Lakeland Financial), requested the City to issue GO
improvement bonds to cover the infrastructure development. The bonds were paid 100% with
assessments from the Liberty Pointe lots as they were developed. The bonds were paid off in five years,
but a few assessments remained unpaid.
Lakeland Financial held the paper on the liberty point assessments and during the housing crisis defaulted
on their obligations. The property went into receivership and the City received a nominal payment for the
outstanding invoices. The amount paid the City only covered the legal fees. City’s that had outstanding
obligations as a result of the foreclosures, were allowed to re-assess the outstanding balances, collecting
the fee as lots sold. The lots have since been foreclosed on by Stearns County. Stearns County is
auctioning off the lots. This fall, Curt and Tracy Ophoven purchased two lots with intentions of building
homes in the next year or so. Although the property was foreclosed, the City has the right to re-assess the
past due assessments and maintenance costs deferred once the lots are sold.
Mr. and Mrs. Ophoven were made aware of the deferred costs associated with the two lots after they
purchased them. Part of the deferred assessments were from the original development assessments. The
development assessments have accumulated penalties and interest for non-payment. Mr. Ophoven
indicated the total deferred assessments will make the profit margin too low to risk building a home to
sell. He may have to leave the lots as unbuildable as a result. This will also affect the other remaining
lots still available on the County auction. Other area cities have reduced their deferred penalties on their
foreclosed lots in an effort to sell and build on them. Sartell has been very successful with selling the
reduced lot prices and having homes built on them. The City did a similar action on Graceview Estates,
waiving the delinquent charges.
The principal assessment amounts cannot be changed as the time period for contesting the assessment is
long past. However, the City Council could consider absorbing the delinquent charges accumulated on
the properties to hopefully sell them and get them back on the tax rolls. When the City finances a project
we do not build in penalties and interest so those fees are not anticipated. The penalties and interest
amounts on the following parcels listed below could be abated:
84-53550-0101 $8,685.85
84-53550-0100 $8,692.55
84-53550-0099 $8,697.63
84-53550-0093 $8,685.85
84-53550-0094 $8,685.85
84-53550-0089 $8,598.62
84-53550-0092 $8,659.61
$60,705.96
The lots that are remaining are small and part of an association, making the lots more difficult to market.
The City can help the development by not charging the delinquent fees.
BUDGET/FISCAL IMPACT:
$60,705.96
ATTACHMENTS:
Request for Council Action
REQUESTED COUNCIL ACTION:
Discussion as to whether to relieve the property owners the
delinquent assessment charges associated with the seven foreclosed Liberty Pointe lots.