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The Lake County treasurer's office is preparing its 2014 parade of neglect.

Buyers soon will be able to bid on acres of gutted buildings and the overgrown foundations of once-thriving neighborhoods from a list of at least 14,000 tax-delinquent properties, whose owners abandoned them to fate long ago.

County Treasurer John Petalas said sometimes the naive may buy them, sight unseen. Tax sale veterans usually give wide berth, forcing him and county commissioners into the expense of recycling them for sale, year after year.

"They should pass a law that takes abandoned properties off the tax rolls and gives them to the cities, so they can do something it and get it off my tax sale," he said.

State Rep. Edward Clere, a Republican from downstate New Albany, would like nothing better than to pass such a law, something he has been trying to do for some time.

"This is an example of a problem that a well-designed land bank would address. The idea involves wiping off the back taxes and starting with a clean slate, so properties like this aren't so upside down," Clere said.

State law now only permits county government to aggregate abandoned properties this way, but Clere said the county officials are more interested in chasing the mirage of collecting the back taxes through resale than writing them off to a land bank.

Clere said a land bank "could transfer the property to a private or public developer to fulfill certain requirements to rehab the existing buildings or build new houses and get these properties back on the tax rolls and occupied within 18 months."

The 1-year-old South Suburban Land Bank and Development Authority in Illinois already has secured more than $2 million in state funding, said Ed Paesel, executive director of the South Suburban Mayors and Managers Association.

The land bank intends to repair or demolish dilapidated properties in Richton Park, Sauk Village, Midlothian, Hazel Crest, Phoenix, Summit and Dolton. Other Illinois communities in Cook and Will counties are in discussion to join.

Lake County's delinquent properties would bring a windfall of millions of dollars to local government if all 14,000 were purchased at face value. "The problem is, some have been on the tax sales for 10 years or more," Clere said.

"There is no reasonable expectation taxes are ever going to be paid either by the current owner or someone who buys the tax certificate at a tax sale. Those continue to accrue with additional interest and penalties, and the properties are becoming less attractive to the market as time goes by."

Clere said the state Legislature should give land-bank powers to cities and towns burdened by large swaths of wasted streetscapes.

"We should be looking at the big picture of neighborhood and community stabilization," Clere said.

Merrillville officials want to take ownership of derelict houses but learned last week that state law only lets the town declare them vacant. Once declared, the town must then outbid private real estate speculators to take ownership.

Clere said that could be difficult because Indiana tax auctions are infested with out-of-state interests buying tax-sale properties with no intention of taking ownership but rather sitting on the ruins, hoping the delinquent owner will be forced to redeem the property at a profit to the speculator.

In Indiana, state Rep. Charlie Brown, D-Gary, said, "I would be happy to carry that legislation. On the surface, it makes all the sense in the world. It would relieve the property owner and allow a unit of government to put that to good use, perhaps by letting a person who lives next door expand.

"Think about the waste of taxpayer dollars having to advertise a property for sale over and over again. That is not a good use of taxpayer dollars," Brown said.


Lake County reporter

Bill has reported in Lake County since 1972 after graduating from Indiana University. He has worked for The Times since 1997, covering the courts and local government during much of his tenure. Born and raised in New Albany, Ind., he is a native Hoosier.