Cuyahoga County has gotten its hands on some dirty money.
It needs more.
The money comes from property owners that County Executive Ed FitzGerald’s administration tagged six months ago as the “Dirty Dozen” because they owe more delinquent taxes than anyone else.
I wrote about the list back then. I applauded the county’s effort to aggressively chase property owners. It’s a no-brainer. But I expressed skepticism that the county could recover the $7.9 million collectively owed by these 12 tax dodgers.
To check the county’s progress and my own cynical view, I recently revisited the list. Here’s what I found.
Since the county targeted the Dirty Dozen with threatening letters, legal actions and public shame, it has banked around $1.2 million, the bulk of it from the Parma Heights Land Development Corp., which was number 1 one on the list and owed $2.1 million.
I’d like to think the guy behind the property, former Northeast Ohio resident and shopping center developer John McGill, who now lives in Florida, did the right thing and paid. He didn’t. The county snagged the money when the property sold at a sheriff’s sale. The rest of the money is tied to special assessments on the property and is being challenged by the property’s new owner.
The other bit of cash the county has received so far came from a property owned by Cleveland developer and parking lot owner Lou Frangos. Six months ago, he owed $347,000 in back taxes on a property near Progressive Field.
I picked on Frangos in my first column on the Dirty Dozen because he develops properties in the critical downtown area and is an active player benefiting from the city’s rebirth. I was also struck by the irony his delinquent property creates. His brother is Gus Frangos, who runs the county’s land bank, a nonprofit agency that prepares forgotten properties for new life. The land bank gets money from recovered delinquent taxes.
To avoid potentially losing his property, Lou Frangos – who was named a Hometown Hero by Fox 8 News last month — recently agreed to make monthly payments totaling about $33,000 toward the debt and current taxes.
Through tax foreclosure proceedings, the county won control of three other properties on the Dirty Dozen list. The properties have been transferred to land banks, one each in Cuyahoga County, Bedford Heights, and East Cleveland. The owners collectively owned $1.3 million. Though the county will never get the unpaid taxes, the properties will be put to a better use. It’s likely that more Dirty Dozen properties will land in the land banks.
Other properties on the original Dirty Dozen remain in some state of foreclosure or legal maneuvering that may or may not result in recovered taxes.
County fiscal officer Wade Steen told me that the county remains committed to fighting.
“We are being aggressive and it does take time,” he said.
As I pointed out in the first column, this means getting tough with do-gooders, such as non-profits and churches that may mean well but are also behind on property taxes for their properties that are not tax-exempt. I highlighted the case of Mount Olive Missionary Development Corp.
Formed and controlled by Mount Olive Missionary Baptist Church on Cleveland’s East Side, the development corporation was number 3 on the list and owed $653,000 for taxes on large undeveloped property near the church. It has tried unsuccessfully for years to win a property tax exemption and has shown little ability to development the land. The county moved to take the property, but the development corporation recently won a 90-day reprieve.
I also asked Steen about the smaller tax dodgers, namely homeowners. He said the county continues to sell to private firms the tax liens it places on these property owners. Private firms pay up front for the overdue taxes and then try to collect them from property owners. The practice is controversial because private firms charge high interest rates to homeowners and can take a property after a year.
The county just sold another $7.7 million in tax liens, bringing its total to around $22 million.
The county has no plans to back off its tax liens sales or its Dirty Dozen list.
I don’t believe the public scorn generated by the Dirty Dozen forces many property owners into submission compared to aggressive legal action. But I’m glad the county is willing to get dirty for taxpayers.