NORWALK, Conn. – It’s official – the big prize in last fall’s tax sale has gone to Norwalk Tax Assessor Michael Stewart.
The 2014 Tax Sale yielded $5.1 million in tax collections – a big prize for the city – with eight properties deeded to new owners, Tax Collector Lisa Biagiarelli said in a Friday press release. Three of those properties were dwellings, the priciest of which was 4 Hawkins Ave., won by Stewart with a bid of $215,000, according to the city’s website.
“There were approximately 50 registered bidders at the tax sale,” Biagiarelli said in her press release. “The Hawkins Avenue property generated the highest number of registered bidders, and had 18 individuals competing. Bidding on that property began at $27,245 (the amount due to the city at the time of the sale) and climbed to $215,000.”
Property owners had six months to pay their taxes and interest to the winning bidders. The six-month redemption period ended Wednesday, and Town Clerk Rick McQuaid recorded the property transfers Thursday, Biagiarelli said.
Two undeveloped lots were taken by the city, as no one bid on them, she said. Three of the properties were boat slips at Greyrock at Oysterbend LLC, located at 10 Platt St. The city’s website shows that Ron Kellog and Chris Handrinos each bought a boat slip at $8,173 and Jerard Teed bought one at $7,912.
Three of the properties now transferred were bought by A1Z7 LLC of Shelton. The LLC bought 32 Glasser Ave. for $95,000 and 176 Bouton St. for $22,138, the city’s website says. There is no record of an A1Z7 on the Secretary of State’s website, but the company is also credited with buying property in Redding during a tax sale.
The bids for both the Glasser Avenue and Hawkins Avenue properties were for more than the taxes owed to the city, but the city does not make a profit, Biagiarelli said. State law requires the city to turn that excess amount over to the Superior Court for distribution to the owners or other parties of interest.
When work began on the tax sale in November 2013, there were 225 properties and more than 50 boat slips with outstanding tax bills in excess of $25,000, Biargelli said. By the time the sale took place on July 21, that had dwindled to 20 properties and 55 boat slips; 14 properties and three boat slips sold, bringing in $5,158,897, she said.
The sale was adjourned on four regular properties, the press release said. For those, either there were no bidders, or a registered bidder bid an amount less than the city was willing to accept. The sale was adjourned on 52 of the boat slips. They will be sold at a later date, or the city will pursue other collection options.
“The collection of more than $5.1 million in back taxes makes this tax sale successful. The tax sale is the City of Norwalk’s primary means of collection enforcement for past due real estate taxes,” Biagiarelli said in the release.
The primary purpose of the tax sale is to enforce collection of taxes, not to transfer ownership of properties, she said.
“While it is difficult to witness three dwelling units and several other parcels of property transfer to new owners, the sale is still sound policy, because in excess of 200 other property owners did bring their accounts current, and did pay what was owed to the city, in order to avoid this result,” she added. “A high current and back tax collection rate results in a more stable budgeting process, and lower mill rates, which equate to tax relief for every Norwalk taxpayer.”
The tax sale was conducted the Norwalk tax collector’s office, with assistance from the assessor’s office staff as well as tax collector colleagues from several other Connecticut towns, Biagiarelli said. This was Norwalk’s sixth tax sale since 2003. In total, these tax sales have yielded in excess of $24 million in back tax collections, she said.
A resident of 4 Hawkins Ave., which Stewart won, said in September that the owner was in the Middle East and unreachable.
In September, Finance Director Thomas Hamilton commented, in an email, on Stewart’s involvement:
“Neither the Mayor nor I were aware of the fact that Mr. Stewart was planning to participate in the tax sale as a bidder. We both learned about it after the tax sale had concluded. While I am not a lawyer and cannot offer a legal opinion, to the best of my knowledge the city does not have a specific policy that prohibits city employees from participating in the Tax Sale as a bidder. I would also note that the Tax Sale is an open and transparent public auction process, which is conducted fully in public view. I would further note that the Tax Sale is conducted entirely by the Tax Collector and her staff; the Tax Assessor plays no role in determining what properties are to be included in the sale, nor does he play any role in administering the Tax Sale.
“Nevertheless, both the Mayor and I are concerned that having a high-ranking city official involved as a bidder in the Tax Sale presents the appearance of a potential conflict of interest and may raise concerns about the integrity of the process among members of the public. Appearances in the public sector matter.
“If consulted prior to the Tax Sale, both the mayor and I would have advised the Tax Assessor to refrain from bidding. Subsequent to the Tax Sale, both the mayor and I counseled Mr. Stewart that we believe his participation as a bidder in the tax sale was an error of judgment on his part, despite the fact that there was no explicit city policy which would prohibit his participation. Both the Mayor and I conveyed that we were disappointed in this error in judgment, and we admonished him to exercise better judgment in the future when such issues arise.”