Massive real estate auction nets Atlantic City $1.7 million

576c45d89b0b4.image

MARTIN DeANGELIS, Staff Writer

ATLANTIC CITY — This cash-starved city sold $1.7 million worth of property Thursday at an auction that drew more than 100 people and sparked lively bidding on a few choice pieces of land.

Thursday’s sale won’t create any miracle rescues for Atlantic City, whose money troubles threatened to close City Hall in April, or to force the city into bankruptcy.

City officials have estimated that the city’s payroll is about $7 million a month, so the auction proceeds will cover just about a week’s worth of salaries.

The $1.7 million purchase value of the property would also generate roughly $58,000 in property taxes at the city’s current tax rate. But Elizabeth Terenik, Atlantic City’s planning director, said before the auction that the minimum bids were set at 10 percent of the properties’ assessed values.

At their final prices, some of the parcels brought in about half of their assessments, Terenik said after the sale.

Still, the total sale — officially, the number was $1,703,050 — was “beyond our expectations,” she said. “The turnout was more than we expected. And most important, the people I talked to want to do something with their properties. They want to build or do something that adds to their property values.”

The biggest sale by far — more than a third of the total take — was $660,000 for a package of properties in the city’s South Inlet section.

Several of the lots are on Maine Avenue, fronting on a Boardwalk that's being rebuilt now. The bidding started at just over $100,000 and jumped in multiples of $20,000 on the way to its final price.

But the buyer wouldn’t give a name and left the Atlantic City Convention Center, the auction site, immediately after the bidding on that package ended.

The second biggest item was a city block between Arctic and Baltic avenues at North Carolina Avenue. That started at $102,000 and sold for $300,000 to Tim Boland, who runs B & B Parking and plans to open a lot there, at least temporarily.

The other major sale in “The Great Atlantic City Real Estate Auction,” as it was promoted, included two Atlantic Avenue lots near Texas Avenue. Their bidding started at $25,500 and reached $250,000.

So taken together, those three auction items added up to about $1.2 million, or more than 70 percent of the final collection.

But 16 of the 61 property packages didn't draw any bids, even the minimums. The company holding the sale, Max Spann Real Estate & Auction Co., then lumped most of those leftovers together at the end of the auction and sold the whole group for the minimum bid, $30,000.

Before the sale, one thing Terenik was promoting was that the city gives five-year tax abatements for improvements to land. Property taxes on additions start at 20 percent of their assessments and add 20 percent a year until they hit full value.

Tim Boland, the owner of the parking company, said he was drawn by the location of his deal.

“We think we did well,” he said of his $300,000 purchase. “It’s a lot of square footage (almost 68,000) very close to City Hall and the courthouse” — the Atlantic County civil courthouse is directly across Arctic Avenue from the vacant lot.

Boland, who also runs the new tram car service on the Boardwalk, says his initial plan is to pave it for a parking lot, but “you never know what the future will bring.”

Craig Tietje, of Atlantic City, went to the auction hoping to buy the lot next to his house, but he got outbid.

“Am I still interested? Not at some of these prices,” he said, adding that the minimum bid was $2,300 but it got to $12,000 “too quick, and too high.”

The Rev. Alexander Smith is pastor of Community Harvesters Church, on North New York Avenue.

He bought a package of 12 lots near his church at the minimum bid, $20,200. His goal is to build a dozen “micro-houses” on them, similar to one he’s already building at his church, at about 360 square feet, to add affordable housing to the neighborhood.

“But we may have to use some of the land to do a parking area, and we may use a few lots for small community gardens,” Smith said. “Worst case, I’m thinking we can do at least six” small houses.

Frank Edwards came down from Brooklyn and said he spent three days driving around Atlantic City, studying every parcel for sale. He ended up buying an L-shaped parcel off Maryland and Adriatic avenues near Delta Basin, a lagoon where some of the city’s clamboat fleet docks.

The minimum bid was $22,000, his winning price was $32,000, and he also wants to build affordable housing — including maybe a shore place for himself.

He’s seen formerly rundown areas of Brooklyn, neighborhoods like Williamsburg, Green Point and Bushwick, explode in value in recent years.

“All were forsaken 25 years ago,” he said. But he figures that the $32,000 land he bought in Atlantic City Thursday would cost closer to $2 million in that Williamburg section now. And the parking lot Boland bought for $300,000 could sell for $25 million in the same part of Brooklyn, he added. So the deals he saw at the auction were “shocking” to him.

“While there’s a lot of negativity in the media about Atlantic City, there’s a lot more optimism when you’re in town,” he said.

Contact: 609-272-7237

MDeangelis@pressofac.com

Read the story, see more photos and video here.