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07 Apr Ep. 38 LRA Properties with Laura Costello
In this episode, Realtor Adam Kruse and Realtor Shannon St. Pierre talk with Laura Costello, director of real estate for the St. Louis Development Corporation, about the L.R.A. (land reutilization authority).
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WHAT’S INSIDE
0:51-Adam Kruse and Shannon St. Pierre welcome Laura Costello from the LRA (land reutilization authority)
1:04-What is the LRA and how does it help with vacancy and abandonment in St. Louis
2:05 Were people just abandoning their houses in St. Louis
2:21 Did these people not have mortgages on these houses
2:28 What does Laura Costello do as director of real estate for the St. Louis Development Corporation which includes the LRA, LCRA (land clearance for redevelopment authority), port authority, and the planned industrial expansion authority
2:55 How do all those authorities fit into the St. Louis Development Corporation
3:25 Is the St. Louis Development Corporation an actual city department
3:45 Does all the revenue come from selling these properties
4:03 How does a property get to the LRA
4:20 How long does it take for a home to go to a tax sale
5:10 Dale Sweet is an expert in tax sales and you should go back and listen to that episode if you missed it
5:23 If a home doesn’t sell at tax sale it goes to the LRA
5:34 Getting the house confirmed by a judge that it was a good sale
5:44 There is a maintenance crew working all day long taking photos, boarding up, and winterizing properties
6:10 what is the time frame between the tax sale and becoming part of the inventory
6:30 Are some of the properties at a point where they need to be demolished
7:00 Tax sales have become so popular that it can be standing room only
7:26 What’s the difference between a land bank and land banking
8:30 St. Louis is the oldest land bank in the country
10:06 How many properties does the LRA own
10:20 Is Detroit a larger land bank
10:58 What’s the average price of a property that has a structure on it
11:45 If there are houses available for $1,000 why isn’t everyone buying them immediately
11:53 Can the bricks be worth more than the sale price of the home
11:59 Would you sell a property to someone who just wants to take the bricks
12:46 How do thieves get away with stealing bricks from houses right out in the open
13:12 What is the LRA’s goals with the properties and who do they like to sell to
13:37 Is it okay to buy and LRA property and turn it into a rental
13:58 Can an investor buy an LRA property and keep it vacant
14:18 What happens if an investor doesn’t have an LRA property occupied within 18 months
14:38 What is a quit claim deed
14:45 What is a right of reentry lien
14:56 How long must an investor hold onto an LRA property before selling it15:30 Why does the LRA not want people profiting off of them when they keep their prices so low
16:32 What is the process of buying an LRA property and what’s the difference between buying a side lot vs. a house
18:16 New homeowners get emotional when they finally get their deed and can begin their project of restoring the home
19:54 Google LRA St. Louis to find the properties and look at maps
20:20 Every Thursday the LRA opens up boarded up properties to show them to investors
21:24 You can come to the LRA window and buy a key to look at properties
22:14 Do homes boarded up with red plywood have a special meaning and what does the yellow date mean
23:30 What can be done about homes with a collapsing back wall
24:29 On average, how many homes does the LRA sell in a year
25:00 What is the CDA (community development administration)
27:31 What is the LCRA
27:50 What are tax abatements and TIFs
28:20 Was the 99 acre NGA site purchased through eminent domain
29:50 One house from the NGA deal had their house picked up and moved down the street
30:50 Do the LRA properties ever get listed on the MLS and are the prices still low
32:54 When do the first tax sales begin
33:26 What is the mow to own program
34:32 What is the garden lease program
36:10 What are the biggest challenges that the LRA faces
37:30 Why are there so many weird little slivers of irregular lots listed by the LRA and why don’t they just give them to the neighboring property owner
40:50 What is the process of recreating parcels of land
TRANSCRIPTION
Adam Kruse: live from the rooftop of the Hermann London real estate group in beautiful downtown Maplewood is the st. Louis realtor podcast with your host Adam Kruse welcome welcome everybody to the st. Louis realtor podcast live from the I guess today we’re on the second floor of the st. Louis Development Corporation downtown st. Louis at the LRA offices this is podcast 38 today is March 30th 2018 I’m here with my co-host Shannon st. Pierre
Shannon: hello
Adam: and we have a very special guest today Laura Costello welcome Laura
Laura: good morning
Adam: good morning and we’re going to interview you and ask you all about the LRA
Laura: okay
Adam: okay so I want to start simple if you don’t mind tell me what is what does LRA even stand for and what’s your role here
Laura: okay LRA stands for land reutilization Authority we were set up by state statute in 1971 when the city of st. Louis already was experiencing the loss of population and therefore a lot of vacancy and abandonment of homes so instead of the city of st. Louis maintaining these properties that were abandoned the LRA was set up to be the owner of these properties owner of last resort the properties come into our inventory through tax sale the city of st. Louis forecloses on properties every year that are five years delinquent in their real estate taxes everyone is welcome to go to those auctions and foreclosure sales the properties that do not sell at the foreclosure sale come into the LRA inventory
Adam: okay so I always get distracted because I find everything so interesting but so in 1971 people were just abandoning their houses
Laura: I think it was more in the late 50s early 60s when it started when we lost our population a couple hundred thousand over a you know 15 20 year period
Adam: did not have mortgages on these houses
Laura: no no otherwise probably the mortgage lender would would foreclose
Adam: foreclose okay and so what is your role here
Laura: my role is director of real estate for the st. Louis Development Corporation okay and that includes the LRA and the LCRA which is land clearance for redevelopment authority they owned property the Port Authority and planned industrial expansion authority those are a lot of authorities
Adam: lots of authority here
Laura: and some of them owned property the majority property holder is the LRA
Adam: okay and then how do all those different groups fit into the st. Louis Development Corporation
Laura: the st. Louis Development Corporation is the staff to all those authorities so I’m an employee of st. Louis Development Corporation and and we all answer to those authorities and those boards the LCRA has a board of director commission LRA a Port Authority Commission we are the staff for the for those commissions
Shannon: and for clarification you’re not actually owned but you’re not an actual city department
Laura: no we are not we are not part of the city of st. Louis we we work hand in hand with them we are the economic development and real estate development arm of the city we are not city employees and we do not get any city general revenues
Adam: so all your revenue comes from selling these properties
Laura: they come from the sale of our properties and we have leases we have development fees for the LCRA
Adam: okay
Laura: you know we have leases up and down the port but the sale of our property is is helps keep us going
Adam: okay so I want to dive in a little bit you you mentioned how the properties get to the lra but so what you’re saying is somebody owns a property I guess they must have their mortgage paid off somehow and then they just stop paying their taxes and then they don’t pay it your one they don’t pay it your two nothing happens your three nothing happens here for that’s when it goes to the tax
Laura: yes by state statute the collector can sue the first year after delinquency and and then foreclose the next year this is how
Shannon: so after five years they sue
Laura: this is they they by statute they can do it after the first year
Shannon: after you’re just one of if I don’t think my
[???]
Laura: right
Shannon: but do they
Laura: but they don’t
Shannon: okay
Laura: because it might be someone’s home now I don’t most these aren’t occupied properties but it might its property so they don’t rush to sue and foreclose immediately usually it’s in year four that the collector of revenue Sue’s and then year five is when they actually hold the sale and
Adam: so we did a whole podcast on tax sales so I’m still really interested in it but I guess we’re gonna try not to get into that too much
Laura: good because Dale sweet probably knows a lot
Adam: he did he did a great job
Laura: not more then us
Adam: but so then someone doesn’t buy it at tax sale for whatever reason and then it comes to you
Laura: yes it comes in to our inventory through a sheriff’s deed and Dale may have talked about that we then get it confirmed we pay someone to go to the judge and confirm that the sale was a good sale and and then it comes into our inventory we give the list of properties to our maintenance crew we have about eight guys that are boarding up properties all day long and they go in and and take photos and winterize the buildings and and report back to us and then we put it into our database and then we you know hopefully try and sell these properties
Shannon: so what’s the time frame so from the point that you acquire these after the tax sale they immediately come into your inventory
Laura: after the confirmation yes
Shannon: and how long is the confirmation
Laura: after the sale the confirmation is usually held to two months afterwards and so after the sale it’s usually you won’t see it in our inventory for about two months
Shannon: but it once it’s confirmed it actually is immediately going into the inventory
Laura: yes
Shannon: a lot of these buildings that you’re getting there in a point where you need to demolish them
Laura: a lot of them we do yes because they’ve been vacant for so long and and out in the weather so if you all have been to the tax sale you’ll see that there’s hundreds and hundreds and hundreds of more people at the tax sale in the last two to three years which is good
Shannon: yes it was standing room only last time
Adam: yeah
Laura: yes but but that’s good because that means it’s going to be purchased by a private individual instead of just coming into our inventory it also means that everything has been picked through I’ve been in other cities where their land bank can choose what they take and they can choose not to take and then it’s just back on the city that city to keep maintaining that property we take everything that isn’t purchased
Shannon: okay so let’s back up for a moment because you use the word land bank and I have used that word and I didn’t realize that lands bank here in st. Louis is not a common term and so I’ve I’m starting to realize it’s gone over some people’s heads and
Adam: like mine
Shannon: and not and then they start confusing it with land banking so just for clarification land banking is when people acquire parcels of property for future sale or development and that’s more an investment thing and that’s a totally legit thing
Laura: that’s so I looked at it
Shannon: yeah that’s so that’s an investor taking a like a gamble on an area of something of sorts okay a land bank is a government entity or a nonprofit corporation that’s focused on the conversion of vacant abandoned and tax delinquent property
Laura: yes
Shannon: in general any land banks goal is to take these properties and put them back into productive use and ultimately tax generating revenue
Laura: yes it’s harder to hear in that term land bank about ten years ago and everyone was referring to st. Louis as the oldest land bank
Shannon: yes but and when we talk about or st. Louis’s discussed it is the oldest land bank in the country you were the first to establish legislation and that’s what establishes a land bank is legislation yes you’re not just creating this arm of the government and saying I’m gonna acquire property it’s actual legislation that allows you to acquire those properties that are tax delinquents that are just left over from tax sales
Laura: that’s correct in that same legislation dictates how we sell it how we maintain our property
Shannon: okay
Laura: sell it if we sell it below the appraised value you know the steps we have to take with appointing authorities the the every offer we get we take before the LRA commission they meet the last Wednesday of every month and there are three commissioners one appointed by the mayor one by the Board of Education and one by the Comptroller and every offer goes before them and they say yea or nay you know so but even that set up by states to you know even
Shannon: that that process is dictated by legislation that’s put in place and I think what’s interesting is there’s not every city has land banks it’s really this the Rust Belt to the Sun Belt right and there are some on the East Coast but there’s only like 100 plus land banks and there’s none in the West I think there’s one in Oregon but none west of Kansas City which I think it’s really interesting
Adam: let me bring it back in here if you don’t mind I’m still trying to learn about the LRA a little bit and and I’m curious how many properties do does the LRA own
Laura: right now we own about eleven thousand eight hundred
Adam: Wow
Shannon: so doesn’t does that make you by far the largest is maybe
Laura: there are the closest and I went to Detroit a couple years ago for a conference and it was so interesting and and and then we went to Baltimore and in May I’m gonna go to one in Milwaukee and it’s so interesting to talk to other land banks and see how they do things and it’s really helpful you know and that’s where we met the Kansas City people and how they do you know things is different but yes we have eleven thousand eight hundred the majority of those are vacant land having over eight thousand parcels of vacant land and then about three thousand or so structures
Adam: what’s the average price of the properties that maybe they have the structures on them
Laura: they vary from neighborhood to neighborhood we broke down the city of st. Louis into you know say 78 neighborhoods well and then we break that down even further because as you know one Street can be completely different in st. Louis than just two blocks or so you know for instance Benton Park has two different neighborhoods the West End has two different neighborhoods but the the properties we sell for typically a thousand dollars a house sometimes in we don’t we don’t have properties in soulard or Lafayette Square or the center West End or anything but it’s based on the neighborhood assessed value
Adam: if the house is a thousand dollars well why isn’t everyone just buying them like wow
Laura: because the condition they’re in primarily
Adam: aren’t the bricks worth more than a thousand dollars
Laura: yes yes people have discovered that
Adam: okay but so would you sell a property to someone who just wants to take the bricks
Laura: we don’t like to know I’ll give you all the Moon Moors information but his neighborhoods in the Ville and the greater ville he says they’re being stolen and they are and I can go down a street on a Monday and see holes punched into walls of standing buildings and by Friday the buildings are all the way down and the brick is you know on pallets and being taken away illegally although
Shannon: that’s really it is interesting and I think that that could be a whole other discussion so but at the same time they’re doing it very much in the open which is why they bottles me a little bit to just pack them up on pallets as if this were part of the past
Laura: some of them put on hard hats or the yellow vests all of our demolition contractors have to have their sign out and and their permit you know demolition permit out there posted on a on a stick the other thing is that the streets are so vacant so they may steal a building and there’s not a homeowner you know within a block but people typically assume that they’re just demolition contractors
Adam: so you say that you don’t necessarily like to sell to people who are just going to buy it for the bricks but who do you like to sell to
Shannon: so Talib so let’s go over what you can do what you want people to do and what you can’t do with the properties
Laura: our goal is to get them back on the tax rolls whether that’s an investor or a renter or or homeowner
Adam: so it’s okay to buy one and turn it into a rental
Laura: oh yes we have a lot of multifamily buildings for families and not all of them can be owner occupied if you ask the individual aldermen they would prefer that we only sell two owner occupants and not two speculators or but but that isn’t the case
Shannon: so can you just buy and hold the properties
Laura: when we sell you a property if you tell us where you’re going to rehab it we put in the deed or restriction that that in 18 months you have to have an occupancy permit on it if that’s what you say you’re going to do
Shannon: so in that scenario in 18 months I don’t
Laura: if we see you’ve pulled permits and you have your windows and you ran into hard times we give extensions we do come across people that haven’t done anything and the 18 months comes up we send them a letter and and they say now I did I walked away from it we send them a quitclaim deed to give it back to us in the deed that we record when we sell you the property the lien on it is called a right of reentry lien and that means if you don’t have the occupancy permit within 18 months we have a right to take the property back we’ve done that twice in my lifetime
Shannon: and how long do you have to hold the property before you can sell it because you can’t just buy an LRA property and turn around and try and sell it to the open market
Laura: without any rehabilitation
Shannon: right because you have come against
Laura: because you’re going where were the commissioners and you’re telling them what you’re going to do
Shannon: okay
Laura: and what what are you going to tell them you’re doing if if you’re doing that that you’re going to flip it they would probably not give you the property
Shannon: okay so yeah I’m just going in and even if I’m improving it
Laura: if you’re improving it a little bit if that’s what you tell them you’re gonna do if you tell them I’m gonna go in and just clean it up you know we if your end user is a homeowner or someone that’s going to take care of the property we don’t care if it’s we we really don’t care we don’t want people profiting off of us because we keep our prices so low so that homeowners and and people that want to live in the city and and work in the city so that they can afford to spend all their money on the rehabilitation of it so we don’t like to hear about flippers and it happens but we don’t we don’t really want to sell to someone that says I’m just gonna flip it and flip it because sometimes the price gets I don’t know if you all wear around with creative funding and with the other disaster I can’t remember his name dhp or whatever it was that was flipping and flipping and flipping so that at the very end there was so much debt on the property and and mortgages and deed liens and everything else that the properties ended up just falling down
Shannon: so go through the process of buying an LRA property because you just mentioned that you need to disclose what you are going to what your intentions are with the property
Laura: if you want to buy land for a side lot or something the process is pretty easy you can you know get the application online and send it in and and you know it’s it’s not a lot of questions or background or when you’re buying a house we ask that people come in make an appointment and come in and sit down so that we can go through everything with them you know what the house is going to need we we want that to know what they’ve been in the property if they’ve come up with a budget so so we sit down with them and we take their offer and we present the offer at the end of the month to the commissioners but in the meantime what we do is go and look at your other properties that you own in the city we make sure you’re current on your taxes because if you’re not this property is probably gonna end up back in our inventory again if someone doesn’t want to pay real estate taxes and then if you say I’m going to buy this house and and Rehab it we you ask what are your what are your finances do you have any steady incomes you have savings we allow for a lot of sweat equity if if you have enough money to get started because we give you 18 months so if you have the money we don’t expect you to have all the hundred thousand dollars in the in the bank already but you do need enough to get started on the project
Shannon: and in fact you actually have a lot of owner-occupants that come in wanting properties
Laura: oh yes
Shannon: that are willing to do all the sweat equity which I think I was surprised to hear
Laura: it’s fun it’s really fun too when people close when they come in too close on the property and how excited they are and they bring their families and you know people are crying it is a big deal to them when we’re actually conveying that deed or them and they can get started on their project people think that we don’t sell our properties and we hold on to them too closely because we do have some rejections every month that we reject and those are usually when someone goes into the property and there’s no furnace and no electric and no roof and they say here’s my budget I’m going to put in this property needs $7,000 you know it’s some people say it’s not up to us to say that person can’t do that project but we we have to be careful when we convey it because that property has already been a nuisance in that neighborhood before it even came into our inventory and so we have to be a little bit more careful the second time around that someone really is going to fix the property up
Shannon: yeah and I would say that that’s probably pretty legitimately if someone came in with a $7,000 budget when it you’re just buying a shell and it needs all the systems that it’s pretty valid to say you’re going to need a bit more than that
Laura: right someone might come in and say this needs $25,000 and that looks pretty good and but their father is an electrician or their uncle is a concrete person or HVAC person you know we have that there are situations where someone is just going to be a group effort
Adam: I was looking into LRA properties probably a decade ago and it was kind of hard to figure out what they were but I noticed you guys have really improved your website which by the way for anyone listening it’s I think the easiest way to get to the website is just to Google LRA st. Louis and they you can like search by the map I think you can search by zip codes and all that kind of stuff yes so that’s awesome to be able to find the properties and then I looked at a few a couple months ago and I guess they were in such bad shape that they had been boarded up and we had a guy named Marcus he would show up and he would like open the properties for us he was awesome
Laura: right
Adam: I kind of made friends with Marcus
Laura: right good
Shannon: so he doesn’t Thursday with everything
Laura: everyone on Thursdays we get criticism for that too someone posted online about three years ago saying I want to buy an LRA property and it’s boarded up property and you know this is May 1st and they can’t let me in and tell June 12th or something and I got upset because the maintenance men you know they’re boarding up properties all day long they’re never not busy Andrey boarding and they have 300 work tickets a day and there’s only eight of them but we take out one day a week to for properties that have boards on them now if you wanted to go look at a property of LRA we would look in our database and we would say either it has an LRA key or it’s completely boarded up and the men have to take the boards off if it’s a key you can come to the LRA window and buy a key
Adam: yeah I used to have a key
Laura: yeah yeah we it’s a $20 deposit to take the key but and that’s one way and then the other way is when it’s completely boarded up the guys get there about 20 minutes so they make appointments all day long and they get stood up all day long and and so they will get there about 15 minutes ahead and they’ll take the boards off and then Marcus or Corey or something will walk through and just make sure there’s no gaping holes and whatever and then they’ll take the people through and then they reboard up the building and then they go to their next appointment so it’s a takes a long time and they can only show you know ten for these 12 properties a day and they get stood up all the time
Adam: that’s frustrating
Laura: yeah
Adam: is it true like that if you’re driving around st. Louis and you see properties that are boarded up with red plywood is that you guys or is that anybody
Laura: the city of st. Louis their board up paint is very similar to ours one’s maroon
Adam: okay
Laura: and one’s red and the city and after a little weather there the city of st. Louis always has their yellow marker they date when they board up the building so that there
Adam: in those are properties that are pre LRA
Laura: yes they are there I always say someone says that property’s falling down and and I say it’s not LRA but it will be very soon
Adam: okay I noticed that on some of these houses that we’re looking at and I don’t know if this question is appropriate for you but a lot of them for some reason the back wall has caved in and I was I went with my contractor Brian and I’m like well can’t we just like what do you call that stick and frame or whatever inside the back wall is that something that’s against the rules I can’t remember if he said it’s just not structural
Laura: you mean if you purchase it from us can you do that
Adam: yeah instead of Reed breaking the whole back wall
Laura: that’s maybe a building division question I don’t know
Adam: it probably is but it seems like I think one of the things that made us not buy some of them is that it would be so expensive to rebuild the back wall with bricks and I’m like
Shannon: I think it’d be good look into because I think the answer is no it’s not required there is a there because I just completed property same scenario and it has siding on the back
Adam: okay maybe they had to put some sort of like steel beams in the wall to hold the walls
Shannon: anyway that wouldn’t surprise me for that roof the the weight of the roof I can go off
Laura: so the back Walden yeah yeah
Adam: I don’t know good question
Shannon: but it is interesting but I think the upside to that is people always want a lot of natural light so there you go
Laura: when we get our list and the guys you know go and winterize them and by the way they’re always months behind in other words they just finished the 2017 sales and I think that last year we took in like 450 or something and that was the low
Shannon: how many do you sell on average a year
Laura: we close on about 50 properties a month
Adam: you’d be an extremely successful realtor and
Laura: that funny but no the back wall thing we go and look at our properties and I get really excited like we can sell this one fast we can get this right back out there it’s beautiful and then we go around back and the walls gone the you know the back wall gone it always amazes me
Adam: there is at least there was some some other sort of organization called the CDA
Laura: community development administration
Adam: and what’s the difference between you and them
Laura: they are part of the city’s st. Louis they administer the federal block grant monies so as far as LRA and CDA goes and that’s a lot of things they fund housing corporations and
Adam: they don’t necessarily have much properties
Laura: the CDA does not own any property
Adam: okay
Shannon: there was a period of time when the CDA was purchasing properties on behalf of that Housing Corporation in Fox park or in skinca de Bolivar or in the Ville they were going out and actively purchasing property that that the neighborhood had determined was in distress and was abandoned and needed help and you know they didn’t want to see a speculator come and get it and so the CDA would go and purchase the property we were there acquisition agents so you wouldn’t ever see any properties in the CDA name it would say LRA and I think we have about a hundred and eighty of them now but they are properties that were purchased with federal Block Grant and so there are restrictions on those properties
Shannon: and what are the restrictions what are they available for sale
Laura: yes they are
Shannon: are they marked the difference is there a difference can you see the
Laura: I mean if you looked up on the Assessor all you would see is that LRA owns it if you called here in our database we mark those as CDA option and we would refer you to the housing analysts over in CDA CDA is in this building so care on our floor so actually CDA they do a lot more with their Block Grant for instance I say we get no general revenue CDA we have a work program with them a maintenance work program so they basically fund all of our grass cutting board up and tree removal I would refer you to the housing analyst and they would explain what the restrictions are on those properties but typically it’s affordability income restrictions meaning they would want whenever it’s rehabbed they would want it to be affordable the house to be affordable
Adam: and I thought they wanted you to sell it to someone who was going to occupy it instead of your rental
Laura: CDA would sell mostly sells their properties to developers small-time developers who then sell them to homeowners yes
Adam: homeowners okay I’m curious about you mentioned the LCRA at the beginning what’s that
Laura: land clearance for Redevelopment Authority doesn’t hold that much property but the land clearance for redevelopment authority has the authority of TIF tax abatement
Adam: okay
Laura: so if you were to purchase a house and Rehab it and you wanted tax abatement do you know what tax abatement is
Adam: yes I have a listing right now that has a ten year tax abatement and run your nine it’s all the new buyer gonna probably have to figure out what the new taxes are
Laura: yeah that’s interesting but they have the authority to issue the tax abatement and then the tips and other incentives they also can purchase property for for development and so the NGA the National geospatial we purchased those 99 acres five hundred and fifty-one parcels through the LCRA
Adam: is that what they call eminent domain
Laura: no eminent domain is when is the authority that the land clearance for redevelopment you’re right they have so they they when we purchased the NGA we had six or seven people that did not want to sell and the LCRA has eminent domain Authority so basically when you know when they didn’t want to sell it goes to a judge I mean and the judge you know we made an offer but there were only like six or seven holdouts and and only two of those were actual homeowners the others were just people that don’t land but anyway we had some holdouts and so they go before a judge and the judge Awards them what they feel is fair it’s actually three judges so yeah we had to use eminent domain on some of the parcels for the NGA
Adam: do some people hold out just because they know they’re gonna get we want to promote that or anything
Laura: I learned a lot I learned probably that that you know people have been through this before the holdouts you know they actually a couple of them got more and a couple of got exactly the same you know in other words the judges awarded them exactly the jury awarded them exactly the same
Shannon: what you offered
Laura: we had offered
Shannon: yeah
Laura: anyway I learned a little bit about eminent domain there were some holdouts like that there was someone that really really really didn’t want to sell and that was mrs. Charles Etta Taylor we picked up the house and moved it down North Market made it right on Jefferson and a right on st. Louis Avenue and went down two and a half blocks and plopped it down it was her family home it was only home Otis Williams the one that made her that promise so it was fun watching it happen though walking down at st. Louis Avenue and and whatever it was it was a process so
Shannon: I can’t I believe you I still can’t believe you picked up the house I didn’t land it in one piece
Laura: yes landed in one piece and as I like to say when they put it in and put the foundation there all new systems and then laid the house you know built the basement and laid the house on it I always like to say it looks like it was born there because it looks exactly like it belonged on st. Louis Avenue you know just with it with the rest of the houses so that was fun
Adam: well being here today really makes me want to go up back and by some LRA properties
Laura: okay good
Adam: and I’m curious if you guys you guys don’t ever list the properties like on the MLS is that right or do you
Laura: yes when we have properties that are safe for you to go and I’ve been out of real estate for a while but um you know the lockbox or whatever if it’s safe for someone just to go in we like to list it we had some more help in real estate the last two years were kind of short-staffed right now but so we listed he we would go and walk through the properties and we listed probably you know ten properties that way
Adam: and then it’s still add more alike market rate or kind of at the low low prices
Laura: no it would still be low prices well I always say we’ll pay real estate commission so I let brokers and real estate agents know that we do pay commissions but we don’t want to up our prices to do it so we have some larger properties that we do have listed we have an incubator on Washington Avenue and we own the connect care on Del Mar for our larger properties the slab site we list with brokers real estate brokers the residential it’s just hard because I’ve had some agents come in here before with contracts and with a buyer and they’ve added $5,000 on to the $1,000 sale price you know so it’s kind of hard
Adam: they should have their buyer pay that
Laura: yeah yeah I mean well that’s what they’re but so it’s kind of hard with our properties too we don’t really have any market rate properties out there that we’re asking 180,000 for you know our highest you know for family is probably $8,000 so which should be incentive for people to come on in and buy them
Adam: absolutely and you want people to come on in and buy them
Laura: yeah
Adam: I guess I mean can you handle more than 50 deals a month
Laura: not at this point
Adam: yeah
Laura: I mean we’re sales are just about to start the tax sale is just about to start
Adam: okay
Shannon: Its april the first
Laura: no it’s typically may
Shannon: oh may oh that’s right
Laura: but it was moved to June why I guess because it’s a new sheriff my only guess is that they need more time I don’t know it’s just always been in May we have a new sheriff and the sheriff conducts
Shannon: you know there’s a lot of people look forward to those
Adam: okay so if someone wants to buy an LRA property you want them to start on your website look around find one they like and then should they come down here
Laura: if they need a key
Adam: 15 20 Market Street Suite 2000
Laura: Suite 2,000 and
Shannon: do you want to talk about some of the other programs that you guys do just
Laura: yeah the motor owned is
Shannon: are in the garden lease those lieu to I see all the time
Laura: yeah the motor owned is if you are adjacent to an LRA property or homeowner your taxes are current you can can’t say purchase because we give it to you
Shannon: okay you just their amount of time but you do have to sign up for
Laura: you you it’s just like any other offer you come in and it’s a Moto own offer the property has to be less than 30 35 feet I can’t remember there are some contingencies on that but for the most part if you’re next to an LRA property you can come in and get it for free you do have to pay for the recording fees and things like that
Shannon: okay and then the garden leases those are actual leases yeah and then there’s like urban tree farms that you guys have done leased out land
Laura: those are partnerships that you took those are yes right lots and just we’re about to do it again
Shannon: that’s awesome
Laura: the garden lease program we put into place when the housing market was down and people weren’t building and and people would come in and say I want this lot on the 2800 block of 2600 block of Louisiana and and we would say that’s a 30-foot 5-foot lot there can be homes built there their homes built two blocks from there we don’t want that to be a garden there are there’s room for Gardens but not in the middle of this but we’ll give you a lease will let you lease it you can garden and everything but when a development comes we give you 30 day notice
Adam: it’s tearing down your Tomatoes
Laura: get those plants moving so so what happens the last four years it seems to me if you drop something on the ground someone’s building a new house especially around the hill and so people are building building building and they come in and they’re wanting these Lots now in Benton Park it’s unfortunate because there was one there that the community loved neighbors loved you know so that one’s kind of unfortunate whereas in Old North you know we get an offer on one of the Lots and the and the garden people said well we know that we were a place hold until the development you to ask that to begin with this is what we’re gonna do with it for six years until they start building again or whatever so so anyway but it’s it’s a good program we do allow people to purchase the garden you know if it’s a garden we allow the neighborhood group or whatever
Shannon: yeah Association that actually purchase a lot
Laura: yeah just you know get it back on on the tax rolls
Shannon: so what do you think are the biggest challenges that the LRA faces
Laura: I would save funding we run out of tree money usually by March
Shannon: and so what do you do for the rest of the year
Laura: we ask other agencies for money
Adam: what you mean you run out of tree money
Laura: well we have a budget I believe it’s six or seven hundred thousand dollars a year for our maintenance crew and so we have line items for the trees line items for the boards
Adam: you mean cutting down the trees
Laura: gasoline
Adam: like the trees that are growing out of a foundation and stuff
Laura: typically with the tree things are that they have fallen on someone’s house or they’re dangerous that we have to remove them we have we do have a bucket truck that we can trim the trees but we spend a lot of money taking down trees or removing trees that have fallen or need to come down or whatever but I would say funding and that goes with demolition also we used to get three million a year for demolition and and our budgets been cut and we probably have three or four hundred buildings that are on a demolition list that we just have to wait until we get the money to take down so
Adam: when I was looking to all this kind of stuff like a decade ago like I mentioned and I was looking into it in a County too I found that they had a lot of properties and I see Shannon has a picture of something here but they had a lot of properties that were like the tiny little sliver
Shannon: yes
Adam: where like a telephone pole had been hit or something like that of these 8,000 vacant parcels you have are a lot of them just weird little pieces that are not like an actual lot
Shannon: yeah so I pulled up like I have seen comments online and so I thought I pull up a few parcels last night quote-unquote parcels and I know what they were talking about and I’ve seen him and I I think my question is so why do you have these tiny little slivers on some little street corner why not just deed those over like one and specifically is Mac and it literally says the walkway between 2700 and 2706 like how do you own a walkway and how does that end up in the LRA and why not just do you give it up or give it to the property owners just to say to get this these addresses that
Laura: we just had a meeting with the mayor’s office you know the mayor is on us all day long about you know getting these properties back out there she really is and and we just had a meeting with the mayor’s office where we talked about the air regular lots and I asked Claire to look up how many we had and I thought we had maybe 600 700 irregular Lots in skin Berta Bolivar in the West End the answer to that is the ho de menthe tracks the suburban tracks when all the street cars when all the street cars left or whatever there were there were there was abandoned land and they came into our inventory that way someone in the West and they might have you know I I don’t know why we have all those seven inch by 150 feet ones but it’s just different reasons everywhere one person had their house surveyed or something surveyed and and this little piece of parcel became its own parcel and they weren’t getting the city of st. Louis gave it its own parcel ID but this homeowner wasn’t paying he was just paying his taxes and they were never sending a bill there’s different reasons
Adam: maybe they don’t want to pay an extra six dollars a year for this tiny little sliver next to their property or whatevers
Laura: well well we don’t want to pay for is is for the survey to get it back into the boundary survey to move the boundary line 200 or 80 square feet isn’t going to change your assessed value that much it isn’t the taxes I think people don’t want to go through the hassle so we’ve just had this long discussion on how we get these parcels and I used to write letters and we still do and I didn’t know about the one on Accomack we write letters believe it or not and and a lot of times it’s it’s a piece of property where there’s a homeowner and a homeowner and we say come on in and get it and one homeowner will come in and one won’t and then they know where they get it and then this homeowners mad
Shannon: so what’s the process of the like re creating boundaries parcels
Laura: yeah
Shannon: it’s a hard
Laura: survey surveyor go out there and has to be recorded so they’ll go and out there and they’ll redraw it with taking our lot and moving the boundary line and then recording that new legal description and I think it’s like $1,000 $1,200 to do that so that’s what we were discussing is ways that we can make this affordable or maybe we take it on you know it doesn’t help so much with the abandoned vacant properties that we have that are dangerous it does take a lot of properties off of our inventory
Shannon: yeah just good I would just say it’s a cleanup process
Laura: right if I had people say flat out no
Adam: it’s more like a PR thing if you could be like we used to have 8,000 now i have 6,000
Laura: you’re right
Shannon: or can I take cause I’m like well can I just buy this little sliver right here and put a sign right there could I use that property to put my little sign
Adam: yeah
Shannon: I thought I would ask because I thought the you there’s nothing else you’re gonna do with this little sliver ever only sign won’t fit on it
Laura: that is funny
Shannon: for a few hundred bucks I’ll buy that little piece of property in the neighborhood I work a lot in and just put my sign up
Laura: you know I can’t answer that question on how we would get a gangway how we would ever own in between two houses just like that that’d be interesting to to find out how we got that yes you can I don’t know if we would sell it to you for this reason it sits on someone else’s property I mean it’s right there it
Shannon: sure does it but at the same time
Adam: it’s not their property
Shannon: it’s not their property and what if I purchase that price
Laura: right well and that’s what we say to people when they say I don’t care if I’m sitting my fence is on your property and I’m like you will if we sell it to someone who its [???] sign of my property the reason that we would probably recommend the commissioners no on that is because the city of st. Louis has to put up with our properties and yes there are other people’s problems until they come into our inventory we didn’t start it but but we have to be respectful to all the neighbors that have to live around the LRA properties until we can sell them and so we would be respectful probably to that neighbor even though it doesn’t look like it’s on his yard putting a Shannon sign on there
Adam: all right I’m gonna go ahead and wrap the podcast for the day you can follow up shannon and I’m happy to support you putting your signs all around town so we really want to thank Laura Costello for being our guest today on the podcast and we’re excited to talk about LRA I’m actually excited I’m like can we just not put this podcast out there so I can go buy a bunch of the LRA properties
Shannon: but not very hard all you have to do is go to the website there is a checklist and then the forum is right there and the forum is not at all difficult
Laura: it’s a lot easier than people think too it’s we are swamped so that that’s testimony that we are selling [???]
Shannon: but the process is simple
Laura: yes it is it is
Adam: so thank you very much for being our guest and please take care