North Las Vegas plans to hold a neighborhood garage sale of sorts this month, one that could see some buyers walk away with the whole garage.
The city’s first 2014 lien assessment auction is set to open at 11 a.m. Jan. 27 in the City Council chambers, 2250 Las Vegas Blvd. North.
No one will be looking to shell out a few bucks for LPs or lawn furniture.
Rather, they’ll be gobbling up other people’s debt: Namely, thousands in delinquent city property assessments owed by more than three dozen homeowners in Aliante.
Officials hope to see third-party investors purchase nearly $62,000 in past due property taxes at this month’s sale.
The obvious reason for investors to buy is compound interest, the annual fees lien purchasers plan to collect for holding on to homeowners’ unsettled assessments.
The kicker is a provision that allows investors to convert those lien assessments into a legal property title if a homeowner’s debt isn’t discharged within two years of the auction sale.
Investors won’t pay more than four figures to hold Aliante’s most expensive unpaid assessments but could find themselves the new owner of a deed worth six figures by 2016.
It doesn’t happen very often, according to acting city Finance Director Darren Adair, but the prospect of that kind of return on investment keeps buyers lining up.
“Every so often someone gets lucky,” Adair said, “but I recently reached out to (former Mayor) Mike Montandon, and he couldn’t remember any (properties) that transferred ownership after the whole process.”
Some of the 39 lien assessments up for auction this month are owned by limited liability corporations and family trusts.
At least one belongs to the office of the Secretary of the Department of Veterans Affairs, which is now $481 in arrears.
Most are worth between $100 and $1,000, with the cheapest available held against an LLC owned by an area property appraiser who owes $75 to city coffers.
The vast majority of Aliante’s pricier liens are against individual homeowners years behind on assessment payments, including one valued at $8,896.
Adair couldn’t say how many auction listings might be abandoned and couldn’t speak to the likelihood that those properties would change hands.
He expects that most homeowners will settle up with the city within a few months of the upcoming lien sale, if not before.
“That two-page list (of assessment liens) will be down to a page by the time the two-year clock starts,” Adair said. “Usually half of these cases are cured by the time the lottery or auction process can even begin.
“So it’s not a revenue-generating thing at all for the city. When we get that money back, it has to go right back into city bonds.”
Like a fun-sized bond issue, this month’s auction is expected to help take pressure off of infrastructure debt sold in the city’s Aliante special improvement district, while helping the city recover a small fraction of lost revenues.
Former City Councilman Richard Cherchio can remember signing off on a few similar auctions during his two years representing Ward 4.
With municipal property tax revenues stuck in a third straight year of steep decline, he can’t remember a better time to hold another.
“When I was on council, it really wasn’t that uncommon,” Cherchio said of the auctions. “The city has a right to do what it needs to do to get fees out of (special improvement districts). … I think it’s just the city turning over every rock they can to find new revenue.”
Contact Centennial and North Las Vegas View reporter James DeHaven at email@example.com or 702-477-3839.