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Tax liens are down, but not everyone can pay

  • Core Fitnes, 2 Home Aveune Concord, NH The Gym

  • Waters Funeral Home at 50 S. Main St. in Concord is assessed at $1.13 million, one of the most valuable properties in the downtown core. It owed $19,687 in taxes. JENNIFER MELI / Monitor staff

  • T.G.I. Fridays, 221 Loudon Rd Concord NH —JENNIFER MELI

  • Offices/Aparments 5-7 S State Street Concord, NH —JENNIFER MELI

  • Warehouse, 77 Merrimack St Concord NH —JENNIFER MELI

  • Undeveloped lots in Oxbow Bluff, Concord NH —JENNIFER MELI



Monitor staff
Sunday, July 03, 2016
Part 2 of 3

(About this series: The burden on New Hampshire property owners to pay their taxes is growing. Over the past decade, median income is down and taxes are up. In a three-day series, the “Monitor” has looked at how this tax tension is playing out across the state, and what happens when people fail to pay. To read all of the stories, gohere.

Database: Find out how much taxes have increased in your town since 2009 by searching the database at the bottom ofthis story. 

 

A gym. A warehouse. An office. A restaurant.

They span the city and serve different uses. But all are under lien, because their owners were late on their 2015 tax bills. Delinquent property taxes in Concord have declined since 2009, but many people still struggle to pay on time.

The last day to pay tax bills from 2015 was March 31, but $1.78 million remained unpaid across Concord. The city sent certified letters to property owners with an outstanding balance. Then, on May 16, the city slapped liens on 542 properties. That number is the lowest total in a decade – since 536 liens in 2006. 

During the height of the recession, the amount of money owed in unpaid taxes peaked at $2.28 million. But in the last five years, that figure has fluctuated slightly but never dipped below $1.5 million. By comparison, at the end of the 2006 tax year, the total owed to the city was $1.34 million.

To Steve Norton, executive director of the New Hampshire Center for Public Policy, the bigger picture shows slow but steady progress.

“We’ve recovered most of the jobs that we’ve had,” Norton said. “We’ve seen foreclosures level out. . . . In general, New Hampshire cities seem to be a place where there is at least some economic growth. Certainly not what we saw in the ’80s and the ’90s, but they are the bright spots in the New Hampshire economy, and Concord is one of those.”

But for many families and businesses, there are still economic dark spots. During the past decade, incomes have remained stagnant. Concord’s overall assessed value has increased less than 2 percent since 2007. But the amount of money raised in taxes has jumped by nearly 50 percent.

That means people who own property – a home, a storefront – who are already struggling to make ends meet have to use a greater portion of their paycheck to pay their rising tax bills.

“Property taxes in relation to income are very high, and if you are lucky enough to be a homeowner in spite of your relatively low income, it’s an annual threat,” said Elliot Berry, an attorney at New Hampshire Legal Assistance. “The inability to pay confronts people with an annual threat of losing their homes.”

Struggling to pay

Like other communities across the state, Concord charges interest on unpaid property taxes – 12 percent at first, then 18 percent once a lien is placed. Michael Jache, tax collector and treasurer, said if a balance remains after two years, the city then could seize those properties.

“We try to work with anyone and everybody who is delinquent in their taxes, setting up a payment plan,” Jache said. “If we can’t get somebody by telephone, we’ll go out and knock on their door.”

Concord’s board of assessors can grant abatements for financial hardship, and exemptions are available for elderly residents. The city doesn’t take over many properties, Jache said, especially if the owner is making regular payments. In the last five years, Concord only seized six; all were residential.

“Most of those are properties that have been abandoned or vacant, and we can’t find a property owner. . . . All we’re interested in is collecting the tax dollars,” Jache said.

But as interest grows, some struggling homeowners find it impossible to catch up.

Berry runs the Housing Justice Project at New Hampshire Legal Assistance, which often works with clients who might lose their homes due to foreclosure or tax liens. He said he doesn’t see a high concentration of cases in Concord, but housing insecurity isn’t a problem confined to a recession.

“We get requests every week for representation from people somewhere in the state who are having a terrible time paying their taxes,” Berry said. “It certainly isn’t a problem that has gone away.”

This year, the governor signed a bill to eliminate a financial penalty for people who have repaid their debts and want to buy back their tax-deeded homes. Berry said that change is a step forward, but efforts to reduce the interest on liens have failed repeatedly. Even if a city or town can create a payment plan on a lien, he said, that added 18 percent can be crippling.

“For people with really low income who are trying to work out a payment arrangement, what they can afford every month to try to get caught up, it only pays off past-due interest,” he said. “It doesn’t get them any closer to paying off the tax debt.”

Who owes money

The properties with the greatest debts, however, are typically not residential.

Nearly $1.79 million was still owed as of May 31, two weeks after the liens were placed and the day the Monitor’s list was generated. (Since then, some accounts have been growing due to interest, while others have been paid off or reduced with regular payments. The list did not include balances still overdue from previous tax years, but some of those debts are outstanding.)

As of the end of May 27, parcels faced liens of more than $10,000. Only three were single-family homes, though a handful of other properties included apartments. Most were commercial properties – warehouses, a dry cleaning business, offices, a car service shop, the building that houses TGI Fridays on Loudon Road.

At the top of the list of delinquents is a limited liability company out of Hudson, which owns an industrial warehouse at 77 Merrimack St. At the end of last month, the company owed $79,690 on that property on its 2015 tax bill. An attorney for the company did not respond to requests for comment.

Michelle Foy owns the building at 2 Home Ave., which houses Core Fitness. She owed $40,573 on that property from her 2015 bills, but said last week her debt would be paid “within the next 60 days.”

She credited Jache for working with her this year and in the past, saying he is “very helpful.”

“The city of Concord has very high property taxes,” she added.

Shaun Clougherty, the owner of Waters Funeral Home, owed $19,687 on that property. The South Main Street building is assessed at $1.13 million, one of the most valuable parcels in the downtown core.

“I don’t really see the need to discuss that with anybody,” he said. “It’s something I’m trying to work out with the city.”

Other late taxpayers were in the midst of appealing their bills to the city’s board of assessors. Fourteen properties owned by a trust in the name of Pasquale Alosa face liens totaling $140,150. The family had requested abatements on almost every parcel, claiming the city’s assessed value is too high. Minutes show the board did not rule on that request during its June 15 meeting.

A family member, Sal Alosa, did not return a message left at his home last week. His attorney also did not respond to a request for comment this week.

Familiar faces

On the city’s list of tax delinquents, however, the most frequent names were development companies. To Jache, that’s to be expected.

“A lot of those major contractors, they’re not going to pay until they sell the unit,” Jache said. “They don’t mind paying the interest. It’s the cost of doing business. I think a lot of ’em, they’d rather use someone else’s money rather than their own.”

For example, under lien were 16 homes in the Vineyards of Concord off Fisherville Road. The property is owned by ML-96 Investments Inc., which links back to R.J. Moreau Communities of Bedford. That company also faced one lien in another development, bringing the total debt owed to $37,280. A message left for one of the owners, Reginald Moreau, was not returned.

On Manor Road, liens seeking $23,460 were also placed on 35 undeveloped parcels in the Oxbow Bluff condo development. That property is owned by Oxbow Realty Trust, a subsidiary of Ashwood Development Companies in Hudson. Vice president De Desharnais said she wasn’t aware of the tax liens on those properties in Concord, but didn’t intend to pay them immediately.

“We pay them when we close on a house,” she said. “It’s just when we sell them. . . . We’re a builder, so our money comes from building a house.”

And some liens were simply the product of misunderstanding.

An employee for Fred Cuda, who owed $36,117 on an industrial warehouse at 34 Locke Road, said last week the debt had been settled. It was overlooked, she said, because of confusion over how many bills were due in a given year. (Records from Jache’s office confirm that debt has been paid.)

At the end of May, some $21,290 was owed on four downtown condos owned by 31 South Main Street Acquisition LLC. And Basin Street Industrial Land Co. LLC was behind roughly $13,870 on five parcels on the west bank of the Merrimack River.

But Brian Thibeault, who is the manager for both companies, said he didn’t know about the liens.

“We must have overlooked that, so we’ll have to look into it,” Thibeault said last week. “I wasn’t aware.”

(Megan Doyle can be reached at 369-3321, mdoyle@cmonitor.com or on Twitter @megan_e_doyle.)