VOL. 128 | NO. 66 | Thursday, April 4, 2013
Council OKs Registry for Blighted Properties
By Bill Dries
For months, Memphis Mayor A C Wharton Jr. and the Memphis City Council had delayed final votes on his proposal to require the registration of property to make it easier for the city to find the owners of blighted property.
Sometimes the council put off the vote. Other times Wharton did, as he talked with real estate agents, property owners and mortgage bankers critical of the provisions.
When the council approved the ordinance on third and final reading Tuesday, April 2, both sides of the discussion got something.
The council amended a provision in the ordinance that would have required the registration of all property. What is left is a registry of vacant and abandoned property where property taxes are delinquent. When code enforcement finds violations, the information in the registry is then used to hold owners accountable in a legal process.
Most on the council agreed such a larger registry was too onerous and not effective in and of itself in fighting blight, which Wharton has made a major initiative of his administration.
The broader registry would have involved information on a property tax form with the Shelby County Assessor’s office responsible for keeping the updated registry after city employees entered the information in a database.
Council members questioned the expense to the city and whether most taxpayers, in the case where their mortgage companies pay the taxes, would overlook the new part of the tax form and then find themselves in violation.
“When the administration says this is not going to create a bureaucracy, that is absolutely false,” said council member Jim Strickland, the most vocal critic of the registry. “There are real solutions to this problem. This isn’t one of them.”
After the council vote, Wharton said his target isn’t the mortgage companies or property owners fallen on hard times.
“For the first time now we do have some sanctions for those absentee property owners that do not register,” he said. “Once we find them now, we are able to assess penalties that go on day for day for day. We didn’t have that before. This opens the door. These are not only people who walk away from their homes. They are investors and nine times out of 10 that’s what we are talking about.”
And he added he expects those owners walking away from a bad decision probably won’t give accurate information.
“These are the folks who want to invest some money, trying to get a quick return,” he said. “It goes bad. They say to heck with it, let the city take care of it. We cannot get service of process on them now and there are no sanctions from not telling us who you are. Even if they leave two days later, that piece of paper will allow the judge to assess penalties and sanctions.”
And in that case, the judge could tell the city to demolish the structure or take other actions now hindered in the search for the real owner.
Charles Tuggle, general counsel for First Tennessee Bank, said a cursory look at a late version of the registry that was approved by the council appeared to be something he could live with.
But he also warned that trying to hold mortgage companies accountable runs into a legal barrier that prevents the companies from intervening on property conditions.
He and others from the financial sector said shortening the condemnation process and changing state laws would be more effective in battling blight.
“I think it will create another bureaucracy,” said Hunt Campbell of First Alliance Bank.
Steve Lockwood, head of the Frayser Community Development Corp., also defended the need for such a registry saying it has been effective in other cities with the provisions.
“I do think it will bring people to the table,” he said.
Wharton’s early anti-blight efforts as Memphis mayor involved a battery of attorneys in Memphis as well as other states tracking the owners through a paper trail and documents listing addresses.
“The more difficult question is when you have a corporate entity – when you have something known as a servicer who may be operating in 50 states and changing names. Once we mail them one time, they have to file saying this is who you come after when you want to come after that piece of property,” Wharton said. “It’s not a panacea but at least it opens the door.”
Strickland – who, like Wharton, is an attorney – argued the door opens on a brick wall that will produce the name of a mortgage company that can’t produce the name of an owner without a subpoena. Strickland said anyone with a computer can get the name of a mortgage company. In his practice, Strickland said using a private investigator is what it takes to find the owner responsible.