Collecting Back Taxes
More than $1.4 Million Due
By Mike Kirby
It is strange but true. At a time when the city of Northampton is in desperate financial straits, a significant number of its property owners are not paying their back taxes, and are getting away with it.
The latest Tax Title list, which downstreet.net obtained from the City Treasurer, shows that 174 of our taxpayers owe the city over $1.4 million. If only half of the people on this list paid their taxes, most of the shortfall from the recently announced state aid cuts would be wiped out.
The full list goes back over 40 years to l957, when Arthur DeLisle stopped paying taxes on property at 839 Ryan Road. There are names on the list that are expected, older people who are land rich but living in ramshackle houses on limited finances. Also listed are members of the Watras family. The late Julie Watras is remembered less than fondly at City Hall for the scorched-earth campaign she conducted when the Watras family ended up on the Tax Title list in May of l990. She called the Mayor, she called the Tax Collector, she called every name on the City Hall directory, and she kept calling the newspapers and the Mayor, and when she put down the phone, she came in and banged on peoples doors. She told us she would be damned if she would ever do anything for the city, one of the front-line regulars at City Hall recently told me. Ill always remember her voice. You could hear her yelling at people all through the building.
Julie Watras and her long and vocal protest may have set back tax collection in Northampton for more than a decade. Who wants to get yelled at by the Julie Watrases of the world? Who wants to evict people, in the heat of summer or the cold and snow of winter? Who wants to be the bad guy badgering folks who might be their neighbors? Not the Mayor, not the Treasurer, not the City Solicitor. The laugh is on all of us peasants, who pay our taxes, year after year. No one at City Hall today wants to deal with enforcing the law, which gives the City considerable stature in land court. The City can foreclose on people and sell the property to satisfy the outstanding taxes. The Treasurer complains that she hasnt got the staff; the Mayor complains she doesnt have any authority over the Treasurer, who holds down an elected position. The City Solicitor? I dont know what she would complain about, but I can only guess. Probably that the city cannot pay her enough to make her do this thankless job.
By the time Mayor Clare Higgins got around to dealing with the Julie and Mitchell Watras situation 10 years later, Julie was on her deathbed. "We are compassionate people," states the Mayor. "We dont want to put old people out on the street." Currently, the Watrases are number three on the top 10 list, still owing the City $110,000 on the house they own on Henry Street and the 75 plus acres of beautiful, but unbuildable bottomland bordering the Manhan River and the Oxbow. There doesnt seem to be a plan in the works for the family to pay their back taxes. When confronted with the familys lack of payment, the Mayor looked at her computer and verified that she sent them a letter in February 2003. They must have got a lot of letters over the last 13 years. Their phone is now disconnected.
And so the top 10 list reads on. There is Douglas Lash, who owns the Northampton Nursing Home on Bridge Road. There is Peter Payne, who owns the complex of industrial buildings on Easthampton Road; John T. Zawacki, who owns Clementine's; the Drozdals, who own the Drozdal funeral home on Damon Road; and Joel Catalano, who now owns the old Childs buildings on State Street.
The tax obligations on the Childs buildings go back to l992, and were incurred by the Childs family, which went bankrupt when they got caught up in the Heritage Bank madness. Normally, the City would have received the past due taxes when the property went from the Childs to its current owner, Joel Catalano, but the Federal Deposit Insurance Corporation (FDIC) operates under some tricky fine print. Although the FDIC took the property from the Childs and sold it to Catalano, they never actually were the owner of record. Ergo, no taxes, even though the City filed a land taking.
I called Joel Catalano in Lenox, where he owns the upscale Apple Tree Inn (www.appletree-inn.com). He bought the Childs property from the FDIC in l996 after the Childs went into bankruptcy and defaulted on their Heritage mortgage. He told me that he had kept up with the current taxes since l997, but still owes the city about $112,000 in past due principal and interest. The property was once an old gas station, and chemicals in the ground blocked development for a long time. A call to the Massachusetts Department of Environmental Protection (DEP) confirmed what Catalano told me. After a cleanup investment of between $70,000 and $80,000, the DEP Brownfields issues have been resolved. According to Catalano, he wrote the Mayor in the fall of 2002, offering some kind of settlement on his tax liability, but never heard back.
Budget Director John Musante reported to me that the Mayor is holding out for full payment. Right now, I am waiting to see some kind of letter from her office or from the City Solicitor to convince me they are on top of this issue. I have my doubts, because both Musante and the Mayor informed me up front that the Catalano property had a Brownfields issue, and the City didnt want to foreclose, for fear that they would be obligated to clean up the chemicals in the ground. The property was cleaned up almost three years ago! The City Solicitor is supposed to be negotiating an agreement, but Atty. Janet Sheppard seems to have never told the Mayor that the problems with the site had been resolved. Isnt it about time the City got those overdue taxes cleaned up?
Carpenter and landlord Peter Payne hasnt paid most of his city taxes on the complex of workshops on Easthampton Road since l989. Compared to many Northampton property owners, his tax obligation is not really onerous, averaging about $2,500 a year. After getting the assessors data sheet the other day, I looked over the records on the Payne property at the Building Inspectors office. The assessors data sheet notes that three of his outbuildings are in poor physical condition and poor functional utility, and the assessment on his main building was minimal because only one-third of it was centrally heated. Since he is not paying taxes, Payne is not supposed to be able to pull a building permit, so what records I found at the Building Inspectors office are dated mostly in the 1980s. In October 1999, however, he got a permit to put in a new gas main.
I wasnt too surprised when I walked through a couple of his buildings, and found these sheds and supposedly derelict buildings in good shape. Nothing is wrong with the building he has for his workshop. Most of the buildings he hasnt pulled down are centrally heated. He had poured cement foundations, put in central heating and installed brand-new looking central electrical panels. His main building is now almost fully rented as workshop spaces for crafts people. Obviously, Payne has been busy since l989.
Leslie Fraidstern, roundly derided by the Mayor and all the official authorities, raised questions on why commercial properties in Northampton werent returning the income residential properties were. Maybe commercial space is not returning the income it ought to because some people have not played the game by the rules.
Northampton Nursing Home on Bridge Road owes the most money on the Tax Title list. As of Feb. 24, the owner, Douglas Lash, owes the city $289,000 plus in taxes, sewer and water charges and interest. By now the total is probably up over $300,000, since the interest piles up fast. Taxes for 2000, 2001 and 2002 taxes are due, and they are not being paid. Lash, who lives in Fall River, did not return my calls. Over the years, the Northampton Nursing Home has been in and out of the headlines. Workers at the nursing home, who belong to Service Employees International Union Local 285, picketed the place in l998 alleging contract violations. In l999, a suspected viral infection killed six patients, and the nursing home was cited by the State for mishandling antibiotics. In April of l999 the owner missed payment on an insurance premium, and left employees without health coverage. Nursing homes are in trouble everywhere, and more than a hundred union jobs are on the line there, but the Citys failure to enforce payment of Douglas Lashs tax obligations amounts to the city quietly subsidizing the home over $70, 000 every year. If the City Council wants to forgive them their taxes that is one thing. This is another.
Other cities have a tight disciplined program for staying on top of their bad debts, but Northampton lets people slide. Municipalities can file liens, they can foreclose on property and sell it for their tax money and expenses; they can embarrass the hell out of their deadbeats. Northampton politely publishes its Tax Title list in summer when everyone is out of town. Maybe it is time our City looked north and tore a page out of Greenfields playbook. Greenfield has put a priority on collecting back taxes, and it pays off. Its Tax Title list is $413,164, even with a lackluster economy, and has no bad debts before l995. Its citizens owe a grand total of $5,958 for 1997.
Every April the clock starts for people who havent paid their last years taxes. In November, Greenfields Treasurer/Tax Collector, Marjory Kelly, sends out a relatively mild letter to these people inviting them to come in and make partial payments if they cant pay their bill in full. If they dont hear from people, a second letter with draconian overtones goes out. (If we do not receive your payment by _______ we will begin tax-taking procedures against your property.). People are advised that if they do not pay in full, their names will be published in the Greenfield Recorder and posted in two public places. In April or May, liens are filed in court against the properties. Then, people who havent responded to the letters or the lien get a final letter served up on certified mail on official letterhead notifying them that on June 15, the Treasurer will notify the City Attorney to begin foreclosure proceedings. On a typical year, the Treasurer will put 70 parcels into Tax Title, and will recover all their costs in assessed fees. She says that most people respond positively and pay their obligation, sometimes in small payments spread over a couple of years. So this is how adults do it.
Northampton makes crooks out of honest people because they let small bills turn into huge debts. OK, the city is doing well with its current 2002 collections (99+% pay); it is not doing well with its old debts. Many municipalities that dont have an attorney knowledgeable about land court work engage the services of one of the large Boston firms whose specialty is tax title recovery and who work on a percentage of the money recovered. But maybe if Janet Sheppard wont handle this business we should get a new City Attorney, somebody who is a go-getter and not someones friend. The new Governor is handing out challenges to cities. Lets quit acting like were helpless mendicants on the state dole and get cracking, Mayor Higgins and members of the City Council.
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