City Council seeks to cut interest at tax sales

Reduced rate would lessen properties' attraction to collection companies

May 25, 1999|By Gerard Shields | Gerard Shields,SUN STAFF

Interest paid on Baltimore properties offered at tax sales would be cut from 24 percent to 12 percent under a bill introduced last night in City Council.

City officials have become increasingly alarmed by the out-of-state companies showing up at tax sales eager to profit from the debts of Baltimore homeowners. Baltimore allows the companies to pay the delinquent taxes and collect 24 percent interest over two years or foreclose.

Critics object to this system because, they say, it does not encourage redevelopment in troubled neighborhoods and drives the poor to abandoning their homes.

Southeast Baltimore Councilman Nicholas C. D'Adamo introduced the bill, which was co-sponsored by the other 18 council members. D'Adamo said that reducing the interest rate would make the properties less attractive to the collection companies.

The high interest rate was established during the 1980s when home mortgage interest rates reached as high as 18 percent. The rate was never adjusted when interest rates fell, D'Adamo noted.

"We're making people wealthy," D'Adamo said. "It's highway robbery."

In other action, legislation was again introduced that would grant a property tax break to the Wyndham Hotel being built at President and Fleet streets near the Inner Harbor.

The tax break -- estimated to be $25 million to $75 million over 25 years -- was struck down by a Circuit Court judge, who ruled that the city could provide such relief only for city-owned properties.

Since then, the state legislature has passed a law that allows the city to offer payments in lieu of taxes (PILOTS) to spur economic development. Gov. Parris N. Glendening is expected to sign the law, which last week received a satisfactory review from Attorney General J. Joseph Curran Jr.

D'Adamo also introduced a bill that would reduce the height allowed on buildings in the Canton area. The measure grew from a recent proposal to build a complex of three 90-foot-tall apartment buildings at Boston and Aliceanna streets to be called North Shores.

Pub Date: 5/25/99

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