Norfolk boosts tax collections, plans auction seminar

NORFOLK

On Thursday, Norfolk will take the first steps toward joining most of the region's other cities in hosting large-scale public auctions of delinquent properties. The city and its auctioneer, Virginia Auction Co., will host a seminar for investors hoping to participate in the city's first major property auction in January.

The change comes four months after The Virginian-Pilot revealed that Norfolk had a severe backlog of delinquent real estate accounts and was doing little to collect on them. By revamping its collection policies since then, the city has netted nearly $1 million in additional revenue.

"The other cities have been doing sales like this for many years," professional auctioneer Roy Black said. "What we're trying to do is get the people of Norfolk up-to-date."

The first auction will be held on Jan. 6. It will be yet another step in the city's becoming more aggressive in either collecting back taxes or selling properties to get them back on the tax rolls.

Earlier this year, a Pilot investigation found that unlike other local cities, Norfolk was waiting for taxpayers to voluntarily pay up. In mid-April the city had more than 900 parcels with taxes at least three years overdue - at a loss of $13 million in revenue.

In many cases, the investigation found, Norfolk had eschewed common practices - such as having public tax auctions of dozens of properties at once - in favor of taking little enforcement action.

Now, "we're getting to the taxpayers instead of waiting for them to come to us," said Deputy Treasurer Anthony L. Burfoot, who is also the city's vice mayor.

Over the summer, the city Treasurer's Office began calling property owners who had fallen a quarter or more behind on their taxes. Those who were a year delinquent received special notices.

Previously, the city waited five quarters before turning over collections to an attorney, said Wendy Petchel, the real estate supervisor in the Treasurer's Office.

"We want to try to get that money paid before we send them off to the attorney," she said. "And we can look at the figures and see that what we're working on is really successful."

Petchel said since the fiscal year began on July 1, the office ha s collected nearly $1 million more from delinquent accounts than it had during the same time last year.

"That's a huge increase," she said. The Treasurer's Office usually collects less than $2 million in overdue taxes in a year.

To further clean up its books, the Treasurer's Office has sent a list of 112 of the smallest delinquent properties to the City Attorney's Office for possible inclusion in the GEM program. The program deeds unclaimed and severely delinquent scraps of land to adjacent landowners, in order to get the land back on the tax rolls. GEM is not an acronym, but rather a description of what the properties could become.

Burfoot said his office also was working with building officials to deny any permits to developers who hadn't paid real estate taxes, and with the assessor to get some properties that are partially underwater or worthless re assessed at a lower rate.

But the largest change will come in January when the city hosts its first large-scale property auction, putting roughly two dozen parcels on the blocks.

Previously, Norfolk placed delinquent parcels on a "sale list" and moved to sell only when a potential buyer approached with an offer.

If no one expressed interest, parcels could sit dormant on the list for years as taxes accrued. Although the list had started with a handful of parcels, it had ballooned to nearly 600 properties, some of which were 20 years delinquent.

Thursday's tax sale seminar, the first of roughly a half dozen that will occur over the next year, will teach residents and potential buyers how Norfolk's auction will work, in the hopes of streamlining the first sale, officials said.

"People aren't used to this process in Norfolk," Deputy Treasurer Carl Cox said. "It's a good opportunity to let people know about our change of approach."

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com