Money For Nothing How would you like to earn 18% interest on your money? Great! How would you like to earn 18% interest on money you don’t even have in the bank? Even better! How would you like to earn 18% interest on money you don’t even have? That would be the ultimate deal, money from nothing. Well for you or me that’s not going to happen but if you’re name is St. Lucie County, step on up. Your limo has arrived. Background (AKA the Boring Bits) When a property owner doesn’t pay his/her taxes the County’s tax collector convenes a tax certificate sale. You might have noticed the extra phone book that was delivered with your local paper a few weeks ago. That was a list of properties that still have outstanding tax debt from their 2014 tax bill. The public can purchase tax certificates via a bidding system that starts at 18%. You bid by stating the lowest interest rate you would be willing to accept in return for paying off someone’s tax debt. If you win you pay the taxes, and get a certificate that accrues interest at the winning bid rate. When the owner finally pays their taxes or sells the property they must first purchase the certificate back from you for the original amount of tax plus the accrued interest. The caveat here is that it can take years for you to get your money back. Meanwhile the County, Cities, School Board, Children’s Services Council, Fire District, and even those guys that spray for mosquitos get their needed funds from the tax certificate revenue. They don’t care who pays it, just that it gets paid. There is another facet of tax certificates and that is the tax sale. After you hold a tax certificate for 2 years you can force a tax sale. Either the owner ponies up what he owes to settle the taxes by a certain date or the property goes to the auction block. The proceeds of the auction pay off the tax certificates and the property changes hands. This is the simplified version. End of the boring bits, any questions? “What happens to certificates that do not get sold?” Good question, Grasshopper, and the basis for this article. Tax certificates that do not get sold get “struck off” to the County at an interest rate of 18%. “Oh, so the County buys them up and then makes 18% interest on the money?” Not quite. You see the County is not required to pay for the tax certificates, but they do make the 18% interest on nothing more than an accounting entry. “Then the County can force a tax sale and get the money owed to us.” Where’s the incentive to do so? They’re earning 18% interest on money they never had to invest. Meanwhile the Cities struggle with their budgets, vital services wind up being cut. The School Board and Children’s Services Council don’t get what is due them, and the children suffer. All while the County is sitting back and collecting 18% interest on nothing more than air. “Well, this can’t happen too often. How much money are we talking about?” St Lucie County has been acquiring tax certificates on the land surrounding the Port St Lucie Civic Center since 2010. To date they have amassed $13 Million in certificates. That’s $13 Million in unpaid taxes that would normally have gone to the City of Port St Lucie, School Board, Children’s Services Council, Fire District, and even those guys that spray for mosquitos. So while the County collects 18% everyone else, our children included, is held hostage and must suffer. “Who owes all this tax money?” Lily Zhong, owns the property. Some say she’s a developer, some say she’s a front for an EB-5 visa scam. The consensus is that she is unable to pay the taxes and clearly not able to develop the Civic Center Complex. “What now?” Wouldn’t it be nice if the County forced the sale of the property through the tax sale? Force Lily Zhong to “put up or shut up” and maybe place the property into the hands of developers who will actually develop the Civic Center Complex into a vibrant part of the City as it was originally envisioned. Properly developed the Civic Center Complex can turn into an active convention center. Bringing needed revenue into the City, encouraging redevelopment of the US1 corridor, and showcasing the City to potential employers. Meanwhile all this is on hold while the unpaid taxes mount up with no resolution anywhere in sight. Tune into Part 2 – Why the Civic Center Complex might never be sold or developed. Why? Because THIS matters.
- Post author:Michael Loeb
- Post published:June 12, 2015
- Post category:Uncategorized
- Post comments:0 Comments
Conservative White American Male - Most recent addition to the endangered species list. -Make a conservative angry by lying to them, make a liberal angry by telling them the truth.