LAKE COUNTY, Calif. — On the advice of the new treasurer-tax collector, the Board of Supervisors this week turned down a purchase offer from a newly formed nonprofit for hundreds of properties that didn’t sell in the June tax default property sale.
Treasurer-Tax Collector Patrick Sullivan urged the board not to accept the offer from North State Solutions, based in Chico, for numerous reasons, ranging from the below-market-value offer to the challenge of monitoring the project.
“My office has a number of concerns about this application,” he said Tuesday evening.
Brenda Pickern of Chico submitted filings to the Secretary of State’s Office on Sept. 4 to form North State Solutions, the specific purpose of which “is to acquire single-family dwellings for rehabilitation and sale to low-income persons, vacant land for construction of low-income housing, or vacant land to be dedicated to public use.”
Pickern is a disability rights advocate who also has filed numerous lawsuits against businesses — including Safeway and Pier 1 Imports — due to accessibility issues.
While North State Solutions has filed with the Secretary of State, it so far is not shown as having been registered in the California Attorney General’s Office online database of charitable organizations.
Eight days after filing with the Secretary of State’s Office, Pickern’s organization transmitted an offer to the Treasurer-Tax Collector’s Office to purchase all remaining tax-defaulted properties that did not sell at the June 2022 sale, Sullivan said.
Altogether, North State Solutions offered to purchase the 548 remaining properties for $354,934.60 in cash, which Sullivan said actually represented 5% of the land value and is “a significant potential discount from the assessed value.”
He said the offer came in the form of an “Application to Purchase Tax Defaulted Property” using a template designated by the State Controller’s Office.
Sullivan’s written report said sales of this type are permissible pursuant to Chapter 8 of the Revenue and Taxation Code.
“Eligible entities include government agencies and nonprofit organizations, for purposes including the utilization of vacant land for public use, including preservation of open space; rehabilitation or construction of residential dwellings for either sale or rent to low-income persons; or for other use to serve low-income persons,” his written report explained.
Sullivan said North State Solutions “may preliminarily meet the criteria for eligibility,” however, he couldn’t recommend approving the proposed agreement.
While his office encourages Chapter 8 sales to agencies and nonprofit organizations, “these proposals should generally be more targeted to specific properties with a carefully proposed project,” Sullivan wrote.
“In this case, North State, a newly created entity without a record of experience in this field, has submitted a proposal that is beyond the typical scope of such an offer, which can impose a substantial burden on County staff. The properties included in this proposal are from a variety of locations throughout the County with varying types of zoning, making the monitoring of this agreement challenging,” he said in his written report.
He told the board on Tuesday, “There’s not really any rhyme or reason geographically,” with the properties in question including some paper lots.
Sullivan said the scope of the application and the purchase offer “is just too vast for us to take on,” and it would place a significant burden on his office and also would require assistance from other county departments.
For that reason, he suggested denial. Until the offer was addressed, Sullivan said he couldn’t offer the properties to other agencies or put them back up for future tax sale.
The board took Sullivan’s suggestion and unanimously voted to deny the proposal.
Lake County News reviewed about 30 lots in the Lucerne area that were included in the proposed sale agreement. While about seven or eight appeared to be buildable, the rest were not, and either were located on creeks along roadsides or in the paper subdivisions above town.
The county’s 2015 paper lot subdivision management plan had stated that the county had been pulling paper lots from tax sales in order to prevent them from recirculating and being sold and resold as they have been for nearly a century.
Lake County News followed up with Sullivan on the issue of paper lots getting back onto the tax sale list.
Sullivan, who took office at the start of January, said in an email that based on what he’s learned over the past month, “the best available list of paper subdivision parcels is not comprehensive, so there were still paper parcels that slip into the auctions.There are also parcels that share those characteristics that do not actually fall into those one of the identified subdivisions.”
Sullivan added, “The County has now committed to attempting to sell 1,000 tax defaulted properties per year to clear the existing tax defaulted inventory, so that prior directive not to list them is now removed.”
He said he has plans moving forward to address the problem of the paper subdivision lots, which he said will need to be developed over the next several months.
Sullivan’s plans include creating a low value ordinance to take to the Board of Supervisors, building a list of parcels for which the debt could be discharged, doing outreach to agencies and nonprofits that would be interested in purchasing such properties — an action already being discussed with the city of Clearlake — and also pursuing bids from adjacent landowners.
Based on recent data, Sullivan concluded that there are less than 1,300 tax defaulted properties eligible for sale with an assessed value over $5,000. Many of those properties will be included on a list being developed for the May tax default sale.
As such, Sullivan said he has to develop his actions to address the paper lots quickly. Otherwise, starting in the fall, when the next auction list goes into development, “the County’s remaining inventory would begin to exist solely of the low value parcels other than newly eligible defaulted properties.”
He added, “Given the default rate, we would find ourselves perpetually listing these parcel types in annual auctions, in a sporadic manner and at great expense.”
Sullivan wants to provide the county with an opportunity to develop a plan to address the paper subdivisions “without thousands of them appearing in tax sales where individual buyers may be purchasing without the intent or capacity to address the existing issues.”
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Supervisors deny purchase offer for hundreds of properties left over from tax sale
- Elizabeth Larson
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