Gloversville set to acquire more foreclosures in 2023


Exterior photo of Gloversville City Hall at 3 Frontage Road in Gloversville. Aug. 1, 2021.

Gloversville Mayor Vince DeSantis says his administration has earmarked approximately $300,000 of the city’s federal ARPA grant for the purpose of a second round of acquiring and renovating properties from Fulton County’s 2023 foreclosure auction and then selling them through the city’s Property Disposition Committee.

“It was a very successful program, and we hope to do it again, and we hope to acquire more properties than we did in 2021,” DeSantis said.

Gloversville received $1.5 million from the U.S. American Rescue Plan Act of 2021 (ARPA) , some of which has been used to bolster DeSantis’ policies of aggressively tackling the city’s longstanding problems with blighted properties.

It’s been about 18 months since the Common Council voted to approve purchasing 10 foreclosed properties for a total of $145,404 from Fulton County in May of 2021. The properties were put under the purview of the city’s first-ever Property Disposition Committee, which was tasked with marketing them and vetting potential new owners, who were required to submit plans for what they intended to do with the properties and agree to deed covenants requiring the properties be brought up to to code by a certain date or else ownership could revert to the city.

DeSantis has argued the Gloversville Property Disposition Committee program is a means of the city regaining some of the control it lost when the city transferred its property tax foreclosure power to Fulton County as part of something called the ‘Hornell Plan.’

Giving up its foreclosure power meant the city was relieved of its obligation to make the Gloversville Enlarged School District whole for unpaid property taxes, a financial burden now borne by the county, but it also exposed Gloversville’s property tax foreclosures to property speculators in the county’s foreclosure auction, some of whom are out-of-town land speculators operating limited liability corporations that sometimes purchase land sight unseen, invest little to nothing in the properties, collect rent from tenants for three years, but then pay no property taxes, allowing the buildings to be foreclosed upon again, a source of what DeSantis and other proponents of his reforms have characterized as “recycling blight.”

The Property Disposition Committee has enjoyed bipartisan support since its creation, and was originally chaired by former Councilman-at-Large William Rowback Jr., the Republican candidate for city mayor against DeSantis in 2021. The committee is now chaired by current Councilman-at-Large Wayne Peters, also a Republican.

Tuesday night the Common Council unanimously approved the city Property Disposition Committee’s recommendation to sell 232. S. Main Street, a city-owned vacant lot, to the owner of nearby property Timothy M. Spraker for $500, which committee member City Assessor Joni Dennie said was close to be the last marketable property left in the committee’s portfolio.

“I don’t think we have (almost) any left,” she said. “I mean there are lots that the city has, but there are reasons we might want to keep them, but I don’t think we really have (much) left. I think we’ve dealt with (almost) everything where the houses have (been demolished) — where we have pieces of vacant land — we’ve disposed of most of those to nextdoor neighbors, which is the perfect situation.”

Dennie said the committee has now worked through nine of the original 10 foreclosed properties bought from Fulton County, and also a number of city-owned vacant lots like 23 S. Main St. She provided a progress report on the committee’s work.

“For the people who purchased (the previously foreclosed) houses, they only had 18 months to rehab those houses and the city building inspector has to inspect them, and he’s on top of that,” Dennie said. “So, that’s moving along. Everyone is working on all of the houses that were purchased, because (the deadline) is coming up. The first ones will be in February.”

The nine foreclosed properties the Property Disposition Committee approved buyers for have been sold for a combined $132,760. The last remaining property is 7 Grandoe Lane, which cost the city $16,542 to purchase and then additional funding to demolish, as part of a $517,100 project to demolish seven blighted properties.

When the city first purchased 7 Grandoe Lane it had an apartment building on it with delinquent tenants not paying rent, until the city was able to successfully evict them in December 2021. With the building now demolished it joins the short list of remaining city-owned vacant properties, some of which Dennie said have garnered little interest from prospective buyers.

The cost of the all of the original 10 foreclosed properties was equal to the amount of taxes owed on them, with the exception of 48 Spring St., which was considered such a costly rehabilitation job county officials had been considering demolishing the building, but instead agreed to accept whatever Gloversville could sell it for, which turned out to be $3,000 to developer JPAK Holdings LLC, owned by Patricia Isabella.

Isabella told the Leader-Herald she invested about $150,000 into the rehabilitation of the building and was then able to sell it for $220,000. She said if the auction price had been closer to the amount owed for the taxes it would have cut her margin in half, possibly making the project not worth doing.

Scoring the Property Disposition Committee approved sales of the foreclosure properties shows the city has regained $132,760 of its original investment of $145,404.

Five of the original 10 sold for a combined gain of $9,411: 202 South Kingsboro Ave. (net gain $1,752), 86 East Fulton St. (net gain $4,135), 5-7 Nassau St. (net gain $340), 37 East Eighth Ave. (net gain $176) and 66 East State St. (net gain $3,008).

But three properties sold at a combined loss of $9,509: 18 Pearl St. (net loss $9,450) 88 Wells St., (net loss $58) and 18 Franklin St. (net loss $1).

DeSantis said the purpose of the Property Disposition Committee program has never been to gain money from the sale of the properties, but too instead encourage “neighborhood stabilization”, which helps the city’s finances to gain in the long run.

“It’s worked out very well, because even if it costs a few thousand dollars, the result is an increase in the property tax base, because when these properties are renovated and occupied and brought up to code their value is much greater, and they improve the value of all of the properties in the neighborhood,” DeSantis said. “This program really improves the quality of life in our neighborhood. It increases the tax base, which really turns into revenue for the city.”

By Jason Subik

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