County prepares to auction tax-deliquent properties

EVERETT — The balding man with bare feet and a Harley-Davidson T-shirt emerged from a south Everett mobile home with a wary greeting for the man with a jacket and tie.

“Who are you?”

“I’m Kirke Sievers, Snohomish County treasurer,” the visitor said.

The tax man had driven to the home near Evergreen Way and Airport Road on Tuesday to let the occupant know about $17,000 in delinquent property taxes and penalties. The amount had piled up since 2010. And if the county didn’t have cash in hand within a week, it would put the home on the auction block.

“Some Christmas,” replied the barefoot man, who said he’d talk to a relative handling the property’s taxes.

Sievers made that visit and dozens of others ahead of the county’s annual tax foreclosure sale set to for 10 a.m. Wednesday in the Snohomish County PUD auditorium in Everett. The auction could continue Thursday, depending on how fast or slow things move.

The county tax sales are not to be confused with bank-foreclosed homes auctioned off outside the county courthouse each Friday.

This year, the county predicts it will have more than 100 properties at auction, Sievers said. The number remains in flux, since people can pay until the day before.

“Unless they redeem by 5 o’clock on Tuesday, they’ll be on sale on Wednesday,” Sievers said.

Included in this year’s mix are more than 40 houses, commercial buildings and other structures. That’s the most Sievers said he’s seen.

The most atypical property facing potential tax foreclosure here in 2013 is the Morning Star Korean Cultural Center in Lynnwood. Assessed at more than $800,000 for 2013, the center has racked up about $83,000 in unpaid taxes and penalties since 2008, Sievers’ office reports.

The buildings at Morning Star are well-kept and well-used, with a library under construction. The center hosts a preschool and halls for traditional ceremonies, as well as rehearsal space for music and dance troupes that perform internationally.

The center’s artistic director, Sinae Cheh, said problems stem from misunderstandings about applying for state tax exemptions. She was confident the center would resolve things before auction time.

“We thought we had everything worked out, but it wasn’t,” Cheh said. “We’re working on that with the Department of Revenue right now.”

Revenue department staff visited Morning Star Thursday to see whether the property qualifies for exemptions, spokeswoman Kim Schmanke said. They aim to reach a decision today.

“Nonprofits need to reapply each year to Revenue to affirm their status and qualify for the property tax exemption,” Schmanke wrote in an email. “As a cultural center, the facility needs to show us that the types of activities it holds qualify it for tax exemption.”

A majority of the properties subject to county foreclosure this year have unpaid tax bills going back to 2010. The largest shares of the taxes would have gone to school and fire districts.

The penalty for nonpayment is steep, as dictated by state law.

By the end of the first year, the county tacks on 23 percent. It’s another 12 percent every year after that. Add to that interest and administrative fees.

On the plus side for delinquent taxpayers, that interest doesn’t compound, unlike many other types of debt.

At the south Everett mobile home Sievers visited, the original tax bill from 2010 totaled about $3,300. With penalties and subsequent years of missed payments layered on, the amount owing on the double-wide and lot has reached about $17,000. That’s for property assessed this year at $177,000.

At auction, the bidding price starts at the amount owed the county. The county gets to keep that. Anything over it, the property owner has a chance to claim, minus sewer and water district liens.

Sales are cash-only. Prospective buyers need to be prepared to bring big cashier’s checks or a hefty wad of bills.

The county makes no guarantees. Incautious speculators could wind up with a clouded title or a useless, foot-wide strip of land between houses.

Sievers isn’t required by law to make the in-person visits to the homes facing tax foreclosure.

“I feel sorry for the citizens when we’re actually selling their homes,” he said. “I wouldn’t feel good if it happened to me, unless somebody had made a reasonable attempt to notify me.”

Noah Haglund: 425-339-3465; nhaglund@heraldnet.com.

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