Crow Wing County looks to increase number of sold signs
In an effort to get more tax-forfeited land parcels back on the tax rolls, Crow Wing County is taking a new look at auction prices.
Currently, tax-forfeited parcels are sent to the county assessors to get the market value and then the property is offered at public auction. The county’s assessed market value is based on comparable sales. Administrator Tim Houle said those values may lag behind the changing market by 18 months.
Kirk Titus, land services supervisor in public land management, suggested dropping the price on land that doesn’t sell by 10 percent, and repeating that measure each time the land isn’t picked up by a buyer.
The county has about 4,324 tax-forfeited parcels. Of those 1,300 parcels are less than 2 acres in size. In 2009, 24 parcels were added to the tax-forfeit list. Last year, 101 new parcels joined the list. Of the 231 parcels added to the tax-forfeited rolls between 2009 and 2012, 79 were sold at a combined value of $561,175.
As of 2010, state law was changed to allow irregular land parcels that aren’t buildable on their own to be sold to a neighboring parcel for less than the appraised value.
Titus noted the property owner may already be using the adjoining parcel for a fire pit or yard space without paying for it.
“If they are already using it for free what can we do to make them to want to pay taxes on a property they are already using for nothing?” Commissioner Rosemary Franzen said.
If those neighboring property owners are using the land, Titus said they are also typically mowing it and keeping it up, which does mean the county isn’t responsible for the expenditure.
But Houle noted if the land was offered for sale others could use it to store property or pitch a pup tent. That, Houle said, could be an encouragement to the neighbor who has been using the property without competition.
Commissioner Paul Koering asked if real estate agents could be given a finder’s fee of $100 or $200 to coordinate a sale.
“I’d like to see the county do whatever we have to do to get these properties back on the tax rolls,” Koering said.
It was noted at the Monday committee meeting, the real estate agent who has to work as hard to sell a $500 property as a $300,000 may find the finder’s fee isn’t incentive enough for the effort.
Commissioner Paul Thiede said if the agents thought it was worth it they would already be buying the land at auction and turning it for a profit.
Titus said Beltrami County reduced the tax-forfeited properties by a third and were successful selling them. Some city lots were going for a couple hundred dollars in value.
His original thought was to reduce the price by 25 percent, but Titus said the 10 percent option may be a good way to step the price down. Typically the county sells about 20 tax-forfeited parcels annually by auction, direct sale or over the counter.
Monday, Titus was looking for board direction on other flexible approaches in the asking price.
First land value would be determined. For lots that were too small for building, Titus said the county could authorize negotiating a price with a willing buyer. For buildable land, the land could be offered at public sale to the highest bidder.
In a reduce value approach, Titus said if the land doesn’t sell at auction and is unsold for more than one year, the price would be reduced by 10 percent and it would be reoffered at the next sale. That process would be repeated until a buyer took the land. In addition to the small lots, the county has 28 tax-forfeited land parcels of 40 acres it may use for trades to consolidate public land elsewhere. The parcels could be sold to make up lost revenue to the county from declining timber markets, Titus reported. The large tracts are typically land-locked.
Koering was in favor of exploring those options. Thiede said he’d like to see what it costs the county to keep the land, noting it could be a matter of giving up millions in property value for tens of thousands of dollars in tax revenues. The county currently has 126 parcels on the unsold list valued at $2.1 million and if sold estimated the tax income would be in the $30,000 to $40,000 range. The land is listed on the county’s website and may be purchased at the counter.