LA Local Governments Spur Economic Activity, Neighborhood Revitalization Through Use Of ‘CivicSource’ Innovative Technology
NEW ORLEANS – Reps with CivicSource, the leading auctioneer of tax-distressed real estate, said while governments across the country are trying to avoid raising taxes, Louisiana’s local governments have found a way to increase revenues without increasing taxes – they are placing tax-adjudicated properties back on their tax rolls.
Tax-adjudicated properties are properties which have failed to sell at prior tax sales and are placed in the custody of the local taxing authorities. In many cases, these properties have been decades off the tax rolls, not generating annual tax revenues. Due to the blighted and abandoned condition of these properties and the unavailability of title insurance, the issue of how to return tax-adjudicated properties to commerce has been a seemingly unsolvable one for the past 30 years.
From tax sales to adjudicated property auctions, CivicSource digitizes due process compliance to ensure legally valid sales. Founded in 2008, New Orleans based CivicSource has been recognized by Inc. Magazine’s 500|5000 as one of “America’s Fastest Growing Companies” and has been recognized as the one of the Best Places to work in New Orleans for the past five years, receiving the designation “Best Place to Work” in 2014.
Civic Source reps said with the advent of their technologies that (1) proves the government gave all persons of interest pre-sale notice, and (2) provides a market-driven online marketplace through which local governments can sell adjudicated properties, more than 1,000 properties were returned to commerce since last July, and more than $20 million in unbudgeted revenues were realized by local governments at no cost.
CivicSource’s CEO Bryan Barrios said the aim of the company is to provide local government with a viable, no cost solution to get adjudicated properties back on the tax rolls so that taxing authorities might not have to increase property taxes on citizens who pay their taxes every year. “Many of these properties have been off the tax rolls for decades, just sitting there,” Barrios said. “But once it goes back on the rolls with a new owner, local governments start collecting recurring annual tax revenues on the property again, and they can stop spending budgeted dollars to maintain and police the property. From the developer’s perspective, property is acquired for much less than market value, with clear title and title insurance. Both sides win, it’s that simple.”
The new technologies track and manage adherence to title insurance underwriting guidelines that, in the case of adjudicated properties, can mean keeping up with several hundred notices per property, Civic Source reps said. Additionally, by making the sale of each property market-driven and initiated by investor deposit, only properties of interest are taken to sale, and local governments do not place money at risk needed to fund pre-sale related expenses.
“With implementing this technology, our main goals were to spur new development, reduce blight and strengthen communities across New Orleans,” Mayor Mitch Landrieu said.
“This was a pioneering effort to move thousands of tax adjudicated properties back to into commerce with this new online process,” First Deputy Mayor and Chief Administrative Officer Andy Kopplin said. “These online adjudication auctions helped the City recoup important revenue to fund essential City priorities and invest in residents’ priorities, such as community revitalization, public safety, street repairs and parks and recreation.”