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.