Danville taking hard look at condemned, vacant properties

Published 9:38 am Thursday, February 15, 2018

Within Danville City Limits, there are 12 condemned properties, four of which are marked for current demolition because they are “dangerous, lack any kind of maintenance, deterioration is occurring daily” and they pose a “danger to the public and have no infrastructure,” according to a code enforcement report.

There are also three properties in the city where a dilapidated structure was demolished and now the city continues to maintain the vacant lots.

Liens have piled up on numerous properties as well. The city holds liens against dozens of properties for work it has done to keep those properties up-to-code, according to a city code enforcement report. Liens on the four “dangerous” condemned properties total almost $25,000; the five properties with the biggest liens — two of which are also on the “dangerous” list — have almost $61,000 in liens against them.

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Danville City Commission wants to do something about the liens and dilapidated properties. On Monday, it voted unanimously to have city staff complete a list of recommendations for action on each of the condemned properties and the three vacant lots.

But getting results isn’t a simple task and it can often be more expense than its worth to pursue foreclosure processes, Danville City Attorney Stephen Dexter said.

Code Enforcement Officer Tom Broach completed a survey of several Kentucky cities for the commission, in order to find out what those other cities do about their liens.

Danville City Attorney Stephen Dexter briefs city commissioners on the issue of liens and foreclosure processes Monday night. (Photo by Ben Kleppinger)

“The cities of Covington, Louisville metro, Bardstown and Georgetown file the liens and the nod nothing,” said Dexter, citing the survey. “So we should note through a survey of some of our counterparts, some of which we share quite a bit in common with, (they) simply file the liens and they are there to be collected when others foreclose or not.

“… Some of it could be for policy reasons. Most likely, it’s due to resources and legislative priorities.”

Dexter said Lexington is an exception on the survey — it pursues foreclosures against properties that have liens of more than $5,000.

Foreclosure on a property can be initiated by a city when it holds a lien — essentially debt owed by the property owner — against the property. Foreclosed properties are sold at master commissioner sales, and the proceeds are used to pay back the city and any other lien-holders.

Mayor Mike Perros said he doesn’t like that the city is maintaining the three vacant lots, causing a continuing cost to the city and mounting liens on the properties.

The city’s January code enforcement report shows those three vacant lots have amassed more than $40,000 in liens from the city for demolition and maintenance costs:

• 318 Caldwell Street, owner listed as Lisa K. McManus: demolished by Danville on Nov. 14, 2016; $17,001.60 in liens.

• 211 N. Fourth St., owner listed as Lewis M. Lambert: demolished by Danville on May 11, 2009; $5,825.05 in liens.

• 637 Old Shakertown Road, owner listed as Randall G. Gaddis: demolished by Danville on Nov. 22, 2016; $17,380.21 in liens.

“When are we going to get those disposed of?” Perros asked Dexter.

It doesn’t work to handle all the properties in the same way because the situations are all very different, Dexter said.

If the city chose to pursue foreclosure on the 318 Caldwell St. property, for example, it would need to ask a big question, Dexter said: “How much is a vacant lot worth on Caldwell Street.”

“At the end of the day, you’re going to have a $17,000 lien plus costs for a property that, when it sells at the master commissioner’s sale, will it bring $20,000 to cover your expenses? No,” he said. “… The city has tremendous resources already in it at $17,000. Do you want to expend more resources … that you may not have any chance of recovering?”

Dexter said city staff are prepared to examine each property and determine what courses of action are available to Danville.

“I wish it was as simple as saying ‘we recommend that all properties follow a certain course of action,’ but each one of these is so unique in character, and in ownership and value and risk and reward that they warrant an independent assessment that quite frankly is time-consuming,” he said.

Denise Terry said she would like to see property maintenance issues resolved before it gets to the point where demolition is needed.

“It kills my soul when certain buildings … go down,” she said. “Because we shouldn’t let them get to the point where they can’t be saved.”

Terry pointed to one historic property on the “dangerous” list marked for demolition, 134 Wilderness Road, which the city first condemned in 1989. According to the code enforcement report, the 1989 condemnation came after a lien was placed on the property for $3,301.44 in 1988. The owner of the property is listed in the report as “Gladys Bryant c/o Bobby Burton.”

“Now, we’re to the point of no return, when at some point in time, that could be refurbished and someone could make a home out of it,” Terry said.

Dexter said sometimes, resolutions of property cases are delayed because of spotty ownership histories, inheritance and other issues that can make it so “the actual owners are undeterminable.”

Dexter said he also thinks it’s important “that we remember that the city did not allow this to happen.”

“The onus is definitely on owners to maintain and upkeep properties in a manner that’s habitable and rises to the level of community standards,” he said. “The city is the bearer of those standards to a certain degree, but the burden shouldn’t be shouldered by the city completely.”

Dexter said another reason properties can sit with liens for extended periods of time is because governmental leaders may not wish to interfere with personal property rights.

“I was not shocked by the survey of other cities that say that they don’t foreclose their liens. It’s why eminent domain isn’t a terribly popular process. It has to be used in certain situations, but people typically hate it,” Dexter said. “It’s sometimes necessary in certain situations, but people value property rights so even though the property has been condemned since 1989 and the city’s taken no action on it, well, it could just show that there’s a value of property rights there and the city doesn’t want to be in the business of taking ownership.”

“What about the property right of the person next door to that piece of property, who keeps their property up, who’s trying to maximize their value?” Perros asked Dexter. “What about their property rights?”

“That’s a consideration on the scale for sure,” Dexter responded. “But again, which right is greater? I’ll leave that up to you to determine.”

“That’s why we get paid the big bucks,” Perros joked.

Commissioner Rick Serres made the motion for staff to prepare a list of recommendations for action on the condemned and vacant properties, along with explanations of what would happen if the city commission took action.

Commissioner Kevin Caudill seconded and the motion passed unanimously.