REO Property Proceedings on a Target Store Site
The city council of Scotts Valley in California has voted to start REO property proceedings to collect over $250,000 unpaid property taxes owed by the real estate development firm, Title II.
Title II has been working on the project to construct a Target store at a land located at the south entrance of the city. Aside from unpaid property taxes, the land also incurred interest assessments on bonds that financed the improvements. The land is part of the project district of Gateway South.
The city plans to recover the money through REO property proceedings. However, the city is not expected to recover the money anytime soon. According to Scotts Valley attorney Kirsten Powell, even if the city’s compliant filing will not be contested by Title II, the foreclosure process is time consuming.
The city plans to file the foreclosure complaint in court, after which Title II will be given 3 days to make a response. The foreclosure process starts only after the court ruled that Title II is in default.
The foreclosure proceeding filed by Scotts Valley against Title II is the second time that the city has made an attempt to repossess the same parcel of land. The first time, the proceeding was aborted when the owner of the property filed a bankruptcy.
Powell recalled that over the years, Scotts Valley made several attempts to start REO property proceeding on other parcels due to unpaid small debts. However, the debts were paid before foreclosure occurred.
Powell explained that Title II has other unpaid taxes attached on the property. But Scotts Valley, being the lead agency in the repossession proceeding, is the top priority for payment, she added.
Meanwhile, Scotts Valley manager Steve Ando said that selling the land at foreclosure auctions would not jeopardize the Target project. He said that the new owner of the property has the right to push through with the project or any appropriate development plan.
City work on the environmental impact assessment for the planned 145 square feet Target store is still ongoing. The fees for that specific work were already paid by Title II. According to industry experts, Target or any developer could buy the land and continue the building project despite the REO property proceeding.
