ST. LOUIS (AP) - Even a half-hour before the sale started, the seats in a fourth-floor courtroom downtown were quickly filling up.
By 9 a.m. on a recent Tuesday in the Civil Courts building, it was standing room only, with onlookers pressed shoulder to shoulder along the walls, enduring occasional chiding from a sheriff’s deputy to remove their caps, silence their cellphones and keep quiet.
It was tax sale day, so the room bustled with excitement at the prospect of picking up St. Louis properties on the cheap from owners who hadn’t paid their property taxes for years. There were a few suits and ties, but the prospective investors came in track suits, shorts, a Superman T-shirt and a crop top.
Outside, in the fourth-floor lobby, a gaggle of potential bidders formed around a bulletin board with a legal notice showing whether the properties they had been eyeing were still for sale.
Up until the sheriff’s sale started at 9 a.m., owners whose property was at risk of being auctioned for back taxes could still hustle to City Hall and pay what they owed. Bidders could not be sure until they entered the courthouse that the property they most wanted would be auctioned.
Out of 473 properties whose owners had been sued for back taxes, the public would get a chance to buy 195 properties, the St. Louis Post-Dispatch reported. The bidding started at what was owed in taxes. Often that was just a few thousand dollars. For some, it was even less.
“For the most part, they’re all pretty much steals anyway,” said Gregg Christian, a sheriff’s deputy who served as auctioneer.
As much as it’s a business opportunity, such auctions are also events. The recent tax sale day drew a crowd of 200-plus people. Some are regulars at the sales and experienced real estate investors. Several dozen people were there for the first time.
“Usually we pack the room like sardines,” Sheriff Vernon Betts told the crowd as he urged them to make room for a few more people trying to squeeze into the courtroom.
“I hope you can profit from some of this and get some of these properties renovated and make St. Louis a better place,” Betts said. His office runs five land tax sales each year.
Mary McCartney, a retired teacher who dabbles in real estate, comes for “the cheapest real estate in the country.” But, she said, the tax sales are also just plain “fun.”
Yet the competition is getting stiffer. She looks for houses to flip or fix up and rent. She has noticed more out-of-town buyers recently, driving up prices.
“Our real estate is so reasonable compared to other parts of the country,” she said.
McCartney managed to walk away with a house on Germania Street that fetched one of the higher prices at the auction: $33,000.
A commercial building near the corner of Russell Boulevard and Jefferson Avenue drew the fiercest competition. Bidders quickly drove the price $30,000 above its $18,000 asking price. Then $40,000, $50,000. A determined buyer won the coveted property for the highest price of the morning: $100,000 even. The room burst into applause.
In all, the 94 properties that sold fetched just under $834,000.
Jason Griffin bought three properties for about $20,000 total. “We were able to get a few we were looking for,” he said.
When the tax sale list comes out two weeks before the sale, Griffin Googles the addresses and checks out the buildings’ condition, particularly their roofs. That narrows the ones he’s interested in. “I can’t imagine” the amount of work such research took before Google Maps, he said, chuckling. He then drives to the properties in person to get a better sense of whether they’re worth buying.
Griffin thought he got a good deal on a house on Edna Street in the Baden neighborhood. The houses on the street are all occupied, he said, pulling up a picture of a neat brick house in good condition. He’s happy with the price, though he said the properties offered seemed to go higher than at the last tax sale he attended.
“I would guess this was a pretty successful sale,” he said afterward. “I had fun.”
The land tax sales each year are the final step in a process St. Louis has established over the last 50 years to stem a tide of abandoned properties left behind as the city’s population fell by over half. As values drop, the expense of maintaining buildings in an old city often means it isn’t worth paying the taxes. After at least three years, the St. Louis collector files suit for back taxes.
Investors last month represented the last shot at keeping the property in private hands. What wasn’t purchased will be handed to the city’s land bank, the Land Reutilization Authority. Someday, a buyer might purchase some of them from the public agency.
But investors at the land tax sales pick over the best options, leaving those in the worst condition for the LRA. The land bank owns almost half of the city’s estimated 25,000 vacant properties, some 7,000 of those vacant structures.
That’s likely where the 101 properties that no one bought last month are headed. The sheriff’s office convened in the same courtroom to put them up for up for auction again. But most investors have bid on the properties they want. The second- and third-day sales are likely to be far smaller, shorter affairs.
Among the properties that didn’t get a bid during the land tax sale: the famed Club Imperial on West Florissant Avenue, where Ike and Tina Turner and Chuck Berry played some early gigs.
The St. Louis Preservation Board denied a demolition permit on the building in January. Its owner, distressed property investor Robert Vroman, had said the only interest was from a potential buyer who wanted to build a strip mall there; the market had shown no appetite for the expensive renovations needed to save the structure.
Vroman warned then that he might have to let the property go back to tax auction unless someone showed interest in investing in it.
Indeed, the LRA appears likely to be the next owner of Club Imperial. When the auctioneer recently read its address, no one responded. He unceremoniously moved on to the next property.
Information from: St. Louis Post-Dispatch, http://www.stltoday.com
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