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WFMS property fetches $625,000 bid in county tax sale

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The north-east side Indianapolis property that is home base for the popular WFMS-FM 95.5 radio station yielded a whopping $625,000 bid in the Marion County tax sale that ended Friday.

The owner of the property at 6810 N. Shadeland Ave. is Indianapolis Radio License Co., a subsidiary of Atlanta-based Cumulus Media Inc., which owns local stations WFMS, WRWM-FM 93.9 and WJJK-FM 104.5.

Cumulus owes more than $80,000 in overdue taxes on the Shadeland Avenue property, dating back to the spring of 2011, according to the Marion County treasurer’s office, which conducts the annual tax sale.

Calls from IBJ seeking comment from both WFMS and Cumulus on the overdue taxes were not returned.

A suburban New Orleans investment firm, National Tax Asset Fund LLC in Metairie, La., placed the $625,000 bid on the Cumulus property.

Cumulus has one year to pay its delinquent tax bill or lose ownership to National Tax Asset Fund.

But even if Cumulus makes good on its debt, the investment firm will make money off its bid. That’s because Cumulus must pay 10 percent interest on the difference between what it owes and the bid amount. That amounts to more than $54,000 in this case.

Investors that make the minimum bid on a property during the two-day tax sale, or the amount owed in overdue property taxes, can earn up to 15 percent interest, according to the treasurer’s office.

John Kelly, CEO of the National Tax Asset Fund, described the interest in the Cumulus property as “spirited,” resulting in the $625,000 bid, the highest of the tax sale. He said that amount is near the estimated value of the property.

“Our goal is to get in, get the tax lien and work with the property owner to pay us back as quickly as possible,” he said.

Kelly said he travels across the country attending tax sales to bid on commercial properties to earn interest on the investments.

He’s not alone, said Adam Shields, an associate at the Indianapolis law firm Krieg DeVault LLP whose practice includes property tax work.

“There are people out there who are literally interested in earning the premiums on a property and hope that it gets redeemed,” he said. “They’d rather not deal with that headache [of ownership] and just want to get a return on their money.”

The latest Marion County tax sale included more than 4,000 properties, many of which avoided the bidding process because the owners paid the overdue taxes.

Properties in which owners failed to satisfy the debt, or didn’t attract a bid, now have a lien placed on them by the county.

The property with the largest lien, nearly $1.3 million in overdue taxes, is located at 600 N. Sherman Drive, the site of the former Thomson Consumer Electronics/RCA plant. The owner is listed as SP Investments H LLC.

Bloomington investor Peter Dvorak bought the 13-building campus out of receivership in 2008 and planned to spend more than $20 million to renovate and lease the largely vacant property. But financing for the improvements fell through, and a lack of new tenants meant rent payments were not enough to cover debt service and property taxes, Dvorak told IBJ in March 2010.

Dvorak’s group that owns the 49-acre business complex filed for Chapter 11 bankruptcy protection in 2010. The case is pending in U.S. Bankruptcy Court in Indianapolis.
 

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  • Clarification
    The tax sale buyer doesn't get a flat 10% bonus on the difference between the minimum bid and the winning bid, they get an APR of 10%, thus, if the owner of the WFMS property pays up in a month, they'll only need pay ~$5,000 interest on the overbid, rather than the $54,000 if they wait the entire year. The tax sale buyer is, however, entitled to an immediate 10% return on the ~$80,000 minimum bid, which increases to 15% if the owner waits longer than six months.
  • Pay your taxes on time
    Or property owners could pay their taxes on time as they are supposed to and prevent the hassle of working out with the tax sale buyers altogether. There need to be consequences for being more than a year delinquent in paying one's property taxes. As a reponsible taxpayer, I am glad that the city has a procedure in place to ensure others do too (or in this case find property oweners that will and must pay those delinquent taxes in order to assume ownership of the property).
    • Using Tax Sales for Investment Hurts the Community
      The requirement of paying 10% to redeem property sold at tax sale hurts the community. "Investors", who aren't from here, buy tax sale properties solely to make money, not to invest in the community, as the RCA property fiasco shows. Ten percent profit is ridiculous in this economy, and this law should be changed to lower the interest rate, to get rid of investors, or to require, in the case of a property like RCA, that the purchaser have a feasible plan to make the property viable for the community.

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    1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

    2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

    3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

    4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

    5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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