Caribou councilors waive foreclosure on dozens of problem properties

7 months ago

CARIBOU, Maine — Caribou officials waived foreclosure on more than two dozen properties Monday, hoping to spur landowners into paying back taxes and cleaning alleged blight.

Blighted properties have become a larger concern for city leaders. In recent months, fires in downtown Caribou have made that issue even more public for a city trying to attract residents and grow its businesses. Other properties aren’t as publicly known but have still drawn complaints from neighbors weekly, said City Manager Penny Thompson.

On Monday, councilors unanimously voted to waive foreclosure on 2021 tax liens for 25 properties throughout Caribou. The council’s decision means that the city will not yet acquire those properties through unpaid taxes and take on the expenses of cleaning or demolishing the properties.

Thompson showed photos of the properties, many of which either have garnered complaints about garbage in their yards or decaying structures as a result of age or fires.

The properties with waived foreclosures include: 151 East Green Ridge Road, 378 West Presque Isle Road, 21 Dow Siding Road, 91 River Road, 908 Access Highway, 393 Watson Memorial Drive, 102 Watson Memorial Drive, 1070 Van Buren Road, 851 Madawaska Road, 54 River Road, 58 River Road, 49 Herschel St., 7 Water St., 81 Washburn St., 52 Spring St., 208 Limestone St., 37 Home Farm Road, 160 Limestone St., 28 West Presque Isle Road and 12 Strawberry Road.

The city council also voted to waive foreclosure for three properties at 577 Access Highway and 296 Washburn St., all of which contain trailer homes, and properties on Lyndon Street and East Presque Isle Road, owned by investment group Merlin One LLC.

In 2019, the city acquired the now defunct diesel and steam plants near the Aroostook River from Merlin One, formerly owned by the late Jim Barresi, through unpaid taxes.  Since then, councilors have waived foreclosure on the Lyndon Street land, which still contains two storage tanks, and vacant land on East Presque Isle Road to avoid costly clean-up costs. 

The city is working to clean up the former steam and diesel plants and could acquire the remaining Merlin One land if more cleanup funds become available.

Councilors will take up the issue of 7 Water St. at their next meeting. That property burned in a January fire and has sat vacant since then. The council will consider whether to accept a quitclaim deed from owners Brian and Sharon Bickford of Lewiston, who filed for bankruptcy in March. The state’s bankruptcy court released the property back to the Bickfords.

Finance Director Carl Grant presented councilors with an initial list of 31 properties for potential foreclosure. Any owners of foreclosed property would have until Jan. 31, 2024 to pay all taxes after the properties foreclose on Nov. 20. Those with three years of unpaid taxes would become tax-acquired properties for the city, Grant said.

Before Monday’s council meeting, the owners of four properties — 183 Main St., 898 Van Buren Road, 901 Van Buren Road and 24 Water St. — caught up on their taxes and were taken off the foreclosure list. The council’s vote left two properties with vacant land on Van Buren Road and Woodland Road on the foreclosure list.

Councilors’ decision to avoid foreclosing on and acquiring most properties on the list through unpaid taxes comes after a U.S. Supreme Court ruling that will change how the city deals with those properties.

In May, the Supreme Court ruled in the case of Tyler vs. Hennepin County, Minnesota that municipalities could no longer keep proceeds from sales of tax-acquired properties that exceed the amount of taxes owed by a property owner. Caribou had previously used sale proceeds to pay for cleaning up or demolishing blighted properties, in hopes of restoring neighborhoods and increasing the city’s housing stock.

The court’s ruling resulted in changes to Maine’s tax lien foreclosure law. The city must now attempt to sell a property through a real estate agent at the highest price, even if it goes to the former owner who did not maintain the property before, Thompson said.

Councilors expressed varying concerns over how quickly the city could now deal with blighted properties, many of which have back taxes.

“Maybe if we get a real estate agent, we could liquidate these properties more quickly and get them back on the tax rolls where they belong,” said Councilor John Morrill.

The 27 properties Grant presented to councilors have a combined taxable value of $1,551,258.

Councilor Dan Bagley said Maine’s current land bank laws allow municipalities to convey tax-acquired property to a local nonprofit, like Caribou’s Business Investment Group, for potential redevelopment. But Bagley does not yet know if the state’s new tax lien foreclosure laws will erase that option for the city.

“A lot of these [blighted] properties aren’t developable right now, but they might be in the future,” Bagley said.

Councilors also unanimously voted to put out a request for debris removal at another well-known blighted property in town: 15 Prospect St.

In September, a fire destroyed the home at 15 Prospect St., which the city had already condemned as a dangerous and nuisance property. City officials sued owner John Barretto earlier this year after he supposedly failed to offer a plan for cleaning his property. 

The home at 15 Prospect St. had been the target of numerous complaints from neighbors and business owners, who alleged that residents abused drugs there with Barretto’s knowledge. Barretto claimed he was helping people who struggled with homelessness and substance use disorder.

Former code enforcement officer Ken Murchison stated in a December 2022 inspection report that the home had no electricity, some rooms had no windows for emergency exits, occupants used improperly installed wooden stoves and electrical wires hung from the walls.

Since the fire, Barretto has been living in his garage and working to dispose of rubble at the landfill, Thompson said. But the property continues to inspire weekly complaints from residents who want the city to do more, she noted.

Thompson said the city could take code enforcement action against Barretto for living in his garage with other inhabitants. The garage does not meet the city’s building codes and is unsafe as a residence, she said.

A special tax would be assessed next year for the 2024 tax commitment to compensate the city for its debris removal. If Barretto does not pay in time, the city could acquire the property through unpaid taxes and vote on whether to let the foreclosure occur in November 2024. The city would need to go through the Supreme Court-mandated process for tax-acquired property sales, Thompson said.

The next Caribou City Council meeting will be held Monday, Nov. 27 at 6 p.m. at Caribou Municipal Building, located at 25 High St.