IBJNews

  • Home

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

Scott Olson
October 8, 2012
Keywords
Commercial Real Estate, Communications, Cumulus, Media & Marketing, Property taxes, Radio, Radio Stations, Real Estate & Retail
Back to TopCommentsE-mailPrint

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.
 

ADVERTISEMENT

  • Clarification
    POctober 9, 2012 9:19 AM
    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.
    Reply to CommentFlag Comment
  • Pay your taxes on time
    Responsible Tax PayerOctober 8, 2012 3:48 PM
    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).
    Reply to CommentFlag Comment
    • Using Tax Sales for Investment Hurts the Community
      Natacha RambovaOctober 8, 2012 3:32 PM
      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.
      Reply to CommentFlag Comment

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    ADVANCED SEARCH
    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ

    1. These higher rates Co. e about only because physicians are now hospital employees. otherwise physicians couldn't charge these rates and share the windfall with the hospital. Community/rural hospitals probably not buying physicians practices and thus weren't getting the windfall anyway.

    2. The incentive for poor people to get themselves off public assistance and "no longer be poor" is even with help...they're STILL POOR! Being poor, even with some assistance, isn't all that pleasant. (I speak from experience) It's a stubborn myth that poor people, who are on public assistance, are sitting in the lap of luxury. You should try living on just those "freebies" that you mentioned and see how meager they actually are. By the way, I didn't mean you had to buy/own a puppy...just pet one. :)

    3. As near as I can tell the minority has ZERO constitutional obligation to offer a quorum to the majority. A requirement for quorum was inserted into the constitution so that tyrannical majorities could not simply shove through odious and objectionable legislation (which is exactly what they did.) By allowing a tyrannical majority to charge fines against the minority for exercising their constitutional prerogative to deny quorum the court as made a mockery of constitutional governance in the state of Indiana.

    4. The voters elected the Reps to make a vote not walk out on the vote. They had to the right to exercise their opinion and vote "no" to the bill. Let me ask you this if you walked out of your job for 5 straight weeks would you get paid? Would you even have a job to go back to? If any elected official walks out on the people they should be arrested for stealing tax dollars from the public. They were elected to do a job and not leave when the job gets stuff.

    5. I have been to several of their locations in Pennsylvania and always go in for 1 item and leave with a basket full of things. I'm very happy they decided on Indiana, now if only they would put the other store in eastside.

    ADVERTISEMENT