Commercial properties that owed nearly $700K in past-due taxes and fees auctioned for $107

photo by: Journal-World graphic

Lawrence City Hall, 6 E. Sixth St., and the Douglas County Courthouse, 1100 Massachusetts St.

The auction of five vacant lots in eastern Lawrence has wiped clean nearly $700,000 in delinquent taxes and special assessments owed to local governments.

At a Douglas County tax auction Thursday afternoon, five commercially zoned properties along East 23rd Street were sold for $107 total. Though the buyer takes over payments of the local taxes and special assessments on the properties going forward, about $693,000 in past due taxes, special assessments and interest dating back to 2012 have been wiped from the books. A large part of that amount was owed to the City of Lawrence, which agreed about a decade ago to finance infrastructure improvements in the area with the expectation of being paid back through the special assessments.

City Manager Tom Markus, who began his position with the city in 2016, said it’s unfortunate more costs weren’t recouped, but that was a risk the city took when it agreed to finance the infrastructure improvements.

“Unfortunately, the hit to the jurisdiction on the assessments is not something you ever want to see, but that was a risk when the community jumped into that, when they decided to put those improvements in there,” Markus said. “And you can see how risks turn out sometimes.”

The Lawrence City Commission voted in 2009 to provide the local development group that owned the properties at that time financing for the infrastructure additions in the area, which included streets, sidewalks and water lines. The area was slow to develop and the development groups, which included Lawrence businessmen Doug Compton and Bill Newsome, began falling behind on the taxes and special assessments on many of the parcels within a few years. An entity controlled by Emprise Bank, however, last year took over ownership of the properties, but did not pay the back taxes and special assessments. That led to Thursday’s tax auction.

However, back taxes and special assessments have been paid on at least one other piece of property in the commercial development, which is just west of where Tractor Supply is located. An approximately 26-acre vacant commercial lot near the intersection of O’Connell and 23rd Street has changed ownership and more than $1.5 million in special assessments and taxes were paid for that property and others in July 2017, according to Douglas County records.

The five properties that were sold Thursday are located side by side on Exchange Place, directly east of O’Connell Road and adjacent to East 23rd Street. All five properties are vacant lots with a total area of about seven acres, according to Douglas County property records.

Local developer Roger Johnson purchased the five properties Thursday, and was the sole bidder on three of them. Johnson and his son Jeremiah Johnson are the developers of the residential neighborhood just south of the properties. Following the sale, Roger Johnson said he did not have any immediate plans for the properties, but that one of his long-term goals is to create jobs in Lawrence and he would like to see the lots developed. Though he purchased the five properties for about $100, Johnson said that it was no bargain due to the special assessments that run with the properties. He said the special assessments are in place through 2031, and will total more than $1 million.

The properties are just around the corner from the Tractor Supply store and another vacant lot that was auctioned last year. Jeremiah Johnson bought that property, at 2460 Fairfield St., for $1, wiping clean more than $180,000 in past due taxes, special assessments and interest.

Markus said the city would also like to see the lots develop, and that he thinks it’s good Johnson purchased the properties because he has a direct interest in their development and use due to the nearby neighborhood.

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