Owners locked in federal bankruptcy owe city back taxes
Last August, Ward 5 Councillor John Powers filed a motion requesting that Mayor Brian Arrigo direct the city solicitor or outside counsel to address the City Council relative to the property status of 585 North Shore Rd. Arrigo approved the motion on Sept. 7, 2022, but that’s as far as things went.
So, this week Powers filed the same motion and Cheryl McComick, general counsel for the city’s Department of Municipal Inspections, was at the City Council meeting with the latest information about the property.
“Three years ago, I met with the owner, and I had some suggestions about the property. It’s a dangerous building,” said Powers, who added that there was an oil spill on the site a few years ago. Powers said he had trouble walking on the planks inside the building because so many of the planks were missing.
“And people broke in. We had kids going in there. It’s dangerous,” said Powers. “I’m sure there’s money owed for taxes and fees issued by the building inspector because of the condition of the building. I asked the Department of Municipal Inspections where we are with this. I want it torn down. It’s dangerous for the people around there and it’s not pretty to look at for people coming to our city.”
Nobody familiar with 585 North Shore Rd. would disagree.
McCormick said the city began foreclosure proceedings in 2018, but in 2019 the owner of the property filed for bankruptcy in federal court. The case is now frozen by a bankruptcy stay which stops creditors from demanding payments. “It’s out of the city’s hands at this time,” McCormick told Powers and other councillors. “The federal bankruptcy action trumps all other actions.”
Powers asked why this has taken so long to resolve.
“We’ve been in active litigation for five years because of the complexities of the case and because of covid, which caused major delays in the court system,” said McCormick, who added that the city is still aggressively protecting its legal position.
McCormick said the point of bankruptcy is to give the debtor a chance to develop a plan to pay any debts and solve problems and address complaints. “But we have to be respectful, be patient and wait for a directive from the court,” said McCormick. “Our hands are tied pending the bankruptcy action.”