REGIONAL- Last week’s online land auction of St. Louis County tax-forfeited properties drew a more diverse and unusual group of bidders than in the past, as participants from Hawaii to …
REGIONAL- Last week’s online land auction of St. Louis County tax-forfeited properties drew a more diverse and unusual group of bidders than in the past, as participants from Hawaii to Pennsylvania squared off to vie for 73 listed properties.
“We were able to attract attention not only from across the state, but as far away as California, Georgia, Hawaii, Texas, New York, Pennsylvania – all coasts. We got them all,” said Julie Marinucci, deputy director of the county Land and Minerals department.
That’s because bidders didn’t have to be physically present. The department staged its first large-scale online auction last week, signaling a significant shift in the department’s business model for moving delinquent properties.
“We had started before the coronavirus really took off as just an alternative way to offer some of our properties that had been through our standard in-person auctions and didn’t sell,” Marinucci said. “Ahead of our June auction when we had to make some choices because of the current COVID-19 restrictions, we went much larger with 73 properties online, and we had great success.”
The sale, held from May 28 to June 11, surpassed all expectations with 48 properties selling for a total of $896,000.
Fourteen of those properties, most undeveloped plots zoned as Forest Agricultural Management or Multiple Use-4, were sold north of the Iron Range, and most garnered bids well in excess of initial listing prices.
A 5.22-acre site along Retreat Lodge Rd. in Greenwood Township listed for $3,000 sold for $25,300. A 40-acre parcel on Hwy. 25 west of Angora listed for $9,750 sold for $19,000. A 1.5-acre site on Wahlsten Rd. in Vermilion Lake Township sold for $16,100, well above its $9,200 list price.
Even small tracts sold well. An approximately 50’ by 100’ parcel in the Vermilion Grove area of Greenwood Township brought more than 13 times the list price of $100, selling for $1,325.
“We haven’t had a chance to dive into the numbers, but we did notice that some of those rural properties really went well,” Marinucci said. “I think it was a combination of a few different things.”
Those reasons all had to do with the accessibility and time provided by the online format, as more people could participate and had more time to do their homework about potential purchases, as evidenced by the number of phone inquiries staff fielded, Marinucci said.
“I think our traditional in-person format is limiting,” she said. “It’s usually held during the day and people have to be there in order to participate. I think that was a differentiator.”
Still, as staff monitored the sale’s progress, it held elements akin to the environment of in-person auctions.
“We did keep an eye on it as it progressed,” Marinuccii said. “We had some early activity that was fun to see, but we knew that like any auction most of the excitement comes in the eleventh hour. There was definitely a lot of activity the last day or so.”
The department is using PublicSurplus.com as its auction site, and potential bidders have to create an account before participating in an auction.
A unique feature is a proxy bidding system that automatically increases a person’s bid in predetermined increments up to, if necessary, a maximum amount set by the bidder. The feature alleviates the need to respond individually to each and every counter bid.
When properties don’t sell at auction, they get moved to an available list of properties that can be purchased at any time for the list price, either through full payment up front or by contract, the length of which is determined by the sale price, Marinucci said.
“It’s what we call over-the-counter sales, but right now our counters aren’t exactly open,” she said, referring to the fact that most county offices remain closed due to COVID-19 restrictions. “We’ve got well over 200 properties on our currently available list.”
Those listings can be viewed on the county website, but Marinucci said that many may be grouped in smaller lots and offered for auction again online. Properties with structures such as houses are good candidates.
“We’re looking at putting some of those up online for our continuing online auction,” she said. “We plan to be launching another smaller subset of properties in the next couple of days. Our goal is to have a continuous selection of property available online. We continue to backfill as things sell.”
While the transition to online sales has been gradual, the success of last week’s land sale provided additional reinforcement for making the shift.
“We learn every time we kind of get through these, but this most recent auction really was an eye opener to the possibilities,” Marinucci said. “I think the more we refine our target marketing with these different properties and getting it in front of groups, we hope we continue to see this level of success.”
Still, Marinucci doesn’t see in-person auctions totally disappearing.
“There are certain pieces that the in-person auctions cater to,” she said. “I don’t know that they’ll every fully go away, but I think that the online presence will definitely be a bigger part of the business model. It’s tough to argue with the success of this online auction.”
Marinucci noted that the Land and Minerals department receives no money from the county general fund but operates in part from the revenue generated by land sales.
However, taxpayers benefit in two ways from land sales, the first being that the parcels sold go back on the county property tax rolls.
The second comes from the surplus revenue generated by department activities, including land sales.
The department can set aside 50 percent for timber development and economic and recreational development. The remaining funds are then split between the county general fund, school districts, and townships.
For 2018, those distributions totaled nearly $200,000.