Number
050299
Version:
SUBSTITUTE 1
Reference
Sponsor
ALD. D'AMATO
Title:
A substitute resolution relative to the delinquent property taxes for 2320 West Burleigh Street
Analysis
This resolution authorizes cancellation of 2002 through 2004 property taxes against 2320 West Burleigh to enable the COA Youth & Family Centers to acquire the property from the Milwaukee Police Athletic League, Inc. as part of a Bankruptcy-Court-ordered transaction, thereby allowing MPS to continue to occupy the facility for classroom space.
Body:
Whereas, 2320 West Burleigh Street (the "Property"), tax key number 285-2251-000-0, is currently owned by the Milwaukee Police Athletic League, Inc. ("PAL"), and that property is currently property-tax delinquent for tax years 2002 through 2004 with the June, 2005 payout amount being $301,991.60; and
Whereas, Despite being notified by the City Assessor's Office, PAL neglected, for each of the years 2002 through 2004, to file a property-tax-exemption-application form to apply for a property-tax exemption under Wis. Stat. § 70.11 as is required by the preamble to that statute (PAL having acquired the Property in May of 2001 from the City of Milwaukee); and
Whereas, In all likelihood, if PAL would have timely and properly filed a property-tax-exemption-application form, the Property may have very well qualified for property-tax-exemption for years 2002-2004, as PAL did file a property-tax-exemption application for year 2005 and the Assessor did exempt the Property for year 2005; and
Whereas, PAL filed for bankruptcy protection and currently has a bankruptcy action pending in the United States Bankruptcy Court for the Eastern District of Wisconsin, Case No. 05-22644-SVK; and
Whereas, In the Bankruptcy Court case, PAL filed a motion for authority to sell the Property outside the ordinary course of business pursuant to Bankruptcy Code § 363 (11 U.S.C. 363), and PAL moved the Court for approval of a sale to the highest bidder free and clear of all liens and encumbrances - including the City tax liens and a lease with MPS (MPS leases a portion of the Property and it uses the second floor thereat to run the middle school grades of Auer Avenue School); and
Whereas, MPS and the City each objected and each requested adequate protection from the Bankruptcy Court; and
Whereas, A Bankruptcy-Court-ordered bidding process occurred and the COA Youth & Family Centers, Inc. (a/k/a Children's Outing Association ("COA")) emerged as the winning bidder; and
Whereas, Pursuant to COA's bid, COA would pay $450,000 for the Property, and those proceeds would go to the first mortgagee, US Bank, in exchange for either a full satisfaction of the bank's $2.8 million dollar mortgage loan against the Property or the Bankruptcy Court otherwise allowing sale of the Property to COA free and clear of the bank's mortgage, and COA would agree to be bound by the existing MPS lease for the Property (except as the same may be amended from time to time); and
Whereas, The City has authority to assign its in rem foreclosure rights (example Wis. Stat. § 75.106) and authority to convey its interest in properties for monetary as well as non-monetary consideration (example Milwaukee Code of Ordinances § 304-49-17); and
Whereas, While the City could: (a) continue to object to the sale of the Property and litigate in the Bankruptcy Court regarding the City's priority, secured tax liens; (b) argue in the Bankruptcy Court that the automatic stay should be lifted and that the City should be allowed to foreclose against the delinquent property taxes; and (c) attempt to foreclose against the Property, the City recognizes the lingering power of the Bankruptcy Court and possible arguments PAL could make in that Court with respect to the validity of the City's taxes, the benefits of not stepping into the chain of title, the benefits of allowing the Bankruptcy Court to authorize PAL's sale to COA, and the benefits of the continued existence of the facility in the neighborhood and in the City and the continued operation of the facility as an MPS location and for youth services; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee, that the City hereby effectively contributes its interest in the Property to the transaction approved by the Bankruptcy Court (sale of the Property to COA) in the form of cancellation of 2002-2004 property taxes levied against the Property, so that the bankruptcy-approved sale and conveyance of the Property to COA may occur free and clear of 2002-2004 taxes, and that COA may continue to lease the Property to MPS for continued MPS operations; and, be it
Further Resolved, That the appropriate City officers and employees are hereby directed to take such actions as are needed to effectuate the purposes of this resolution (including, but not limited to, authorization of the Treasurer, Comptroller, Assessor, and City Attorney's Office to cancel the 2002-2004 delinquent property taxes against the Property in the event that COA does acquire title as contemplated herein and as part of the Bankruptcy Court action pending); and, be it
Further Resolved, That, to eliminate from the Treasurer's books the delinquent 2002-2004 property taxes, expenditure from Fund 0110, Org. 2210, Account 107802 is authorized; and, be it
Further Resolved, That the Commissioner of Assessments furnish COA with a Wis. Stat. § 70.11 property-tax-exemption-application-request form so COA may timely submit the same to the Assessor for consideration, on or before the 2006 deadline, for possible exemption from property taxes for year 2006.
Drafter:
Gregg C. Hagopian, Assistant City Attorney
GCH:mll
June 23, 2005
1077-2005-1716/94403