The first auction of properties taken over by the city for unpaid taxes raised $2.53 million and resulted in 79 sales, New Orleans officials said Thursday. The highest bid was $330,000 for a commercial building at 2438 St. Claude Ave.
The city put about 90 “tax-adjudicated” properties, mostly vacant lots in neighborhoods across the city, on the virtual auction block Wednesday.
Nearly 320 individual bidders placed more than 8,000 bids on the sites. The 79 winning bids were placed by 65 bidders, 85 percent of them from Louisiana, the city said.
Mayor Mitch Landrieu, whose administration announced the auction in February, called the initiative a “resounding success.”
“This process will do more than put these properties back into commerce. It will also help strengthen our communities and collect important revenue for the city to invest in residents’ priorities, such as community revitalization, public safety, street repairs, and parks and recreation,” Landrieu said.
Unlike a typical tax sale, where a buyer does not actually gain title to a property and must initiate foreclosure proceedings against the owner, Wednesday’s auction gave winning bidders outright ownership and a free and clear title.
The properties put up for sale previously went unsold in a tax sale and, as a result, had been in the city’s control for at least five years.
The properties scheduled for the auction had debts totaling $2.51 million, including back taxes, penalties and interest.
The city said revenue from the sale will be used to pay for the cost of the auction and pay back taxes owed to the city, the Board of Liquidation, the Orleans Parish School Board and the Sewerage & Water Board. Any remaining money will go to the city.
“Seventy-nine properties that have been blighted, a burden on the city, and that shifted (their) property tax obligation to those taxpayers who pay their debts, are now back in commerce,” City Councilwoman Stacy Head said. “While the initial revenue generation for the city and other taxing bodies is wonderful, the real benefit is in years to come as these properties become homes for New Orleanians and continue to stabilize neighborhoods.”
In addition to the money raised at the auction, the city brought in another $1.2 million from the owners of 44 properties who made their accounts current to avoid having the sites sold to the highest bidder.
The next auction, on Aug. 5, is expected to include 190 properties.