by Mike Sharkey
Staff Writer
For years, those who wanted delinquent tax certificates waited for the week in May in which they could invade the county courthouse and bid Wall Street-style for those certificates pertaining to properties all over Duval County. The process was the 4-5 day auction in which delinquent tax deeds were sold to the highest bidder. Often, things got loud and heated and the auction took on a stock exchange look and atmosphere.
“There was all that hollering and screaming,” said Alvin Crooms, manager of property taxes and occupational licenses for the Tax Collector’s Office.
Welcome to the 21st Century.
Crooms, who has been handling the auction since 1996, said this year’s auction will be a one-day affair and will be conducted solely via the Internet through a company called bid4assets.com.
“They have handled these kinds of things in the past in other counties,” said Crooms.
Last year, Crooms said 200 people spent nearly a week bidding on tax deeds for various real estate all over the county. This year, with an online auction, there is no telling how many people will bid on 21,786 delinquencies worth $31.7 million that will be up for sale.
Starting Tuesday, delinquent tax notices will be printed in the Daily Record and again on May 23 and 30. The one-day auction is June 1.
Crooms, who has no role in the auction this year, said the decision to hold tax deed auctions over the Internet is becoming more popular.
“Every county is getting away from it (live auctions),” he said. “They want to let a company do it for them. It’s automated rather than manual.”
Tax Collector Mike Hogan said his office went to an online auction for two reasons.
“First, it was getting to where the sales were lasting four and five days. This will mean less time on the auction for my staff and more time for them to work on other things,” said Hogan. “Second, it’s a win-win situation for the tax certificate buyer and the person who can’t pay their taxes. Low-interest bids benefit the property owner when they redeem that tax.
“Also, typically, we were seeing more and more buyers that were not from this county. Now, literally, you can participate from anywhere in the world.”
Hogan said when he took office in 2003, the technology existed to hold the auction online. However, as much as he appreciates cutting edge technology, he wasn’t willing to be the guinea pig.
“In 2003, one or two counties in Florida had gone to it. I embrace technology, but I didn’t want to be the front runner,” he said. “All of them had their problems and all of those problems were overcome. There was one lawsuit and the tax collector’s office won. There was no reason to put my folks at risk at the time.”
Laura Reimers, vice president of marketing and communications for bid4assets.com, said the
auction will be a 24-hour affair and that interested parties should do a few things before purchasing tax deeds.
“We encourage people to come to our site where there is a demonstration and training,” said Reimers, whose company is based in Maryland, near Washington, D.C. “Getting the list is also an important part of the process. Due diligence and understanding what’s being offered will only benefit people in the long run.”
Reimers said her company is handling similar auctions for seven other Florida counties. In Jacksonville, the company responded to a Request for Proposal and submitted a bid for the job.
“We were thrilled to get the business,” said said.
Bid4assets.com, which was started in 1999, will charge the City a fee per transaction rather than a flat fee to host the auction. Like e-Bay, Reimers’ company holds on-line auctions. Unlike eBay, the online auction site, those auctions tend to deal in tax deeds and real estate and encompass a much shorter period of time.
“We work with private companies as well as the government on the federal, state and county level,” said Reimers. “eBay made online auctions a household name. But, that’s where the comparisons stop.”
Not everyone is pleased with the online nature of this year’s auction. The fear is many locals will be left out of the process thanks to the one-time bid option and the fact that in previous years, bidders from remote regions of the state were reluctant to come to Jacksonville for several days to bid on properties they may not land.
Attorney Gerald Sohn and real estate broker Larry Newkirk have both participated in the live auction for years. Neither plans to this year.
“Interest rates are so low that I expect heavy bidding from South Florida,” said Sohn, who was involved in the live auction for more than 20 years. “The online auction will be quicker and there will be more competition from outside Duval County. People can sit in Miami and bid on certificates.”
“I don’t think I’ll get involved because interest rates are so low.”
Newkirk said the process won’t be a true auction, one in which individual bidders drive the price of a certificate up.
“It will be more like a field bid. It’ll be a one-time bid,” said Newkirk, who doesn’t plan to bid this year after 20 years of being involved in the live auction. “It’s not a public auction.”
Newkirk believes that large conglomerates from all over the state will dominate the bidding by buying a majority of the certificates at minimum interest rates, then bank on the property owner paying the delinquent taxes within 23 months. Newkirk says that many of the certificates will be purchased for the minimum 1/4 of one percent interest bid. The property owner, in turn, is faced with a minimum 5 percent penalty. Thus, the certificate holder profits from the difference.
The following is information on the Tax Collector’s Web site and covers everything from what a tax certificate is to how the process works.