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Buyers making profit off Gary-owned land

A sign marking Gary Housing Authority’s Delaney West Community housing project 21st Avenue Pierce Street is missing. A Hobart man

A sign marking the Gary Housing Authority’s Delaney West Community housing project at 21st Avenue and Pierce Street is missing. A Hobart man paid $10,000 for the public housing project after it was erroneously sold at a county tax sale last year. | Post-Tribune photo

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Updated: September 18, 2013 6:03AM



GARY — Delaney West, a well-known public housing project in midtown, was sold at a county tax auction last year. By mistake.

It’s one of several gaffes that now seem on their way to being corrected.

The Hobart man who purchased Delaney is attempting to secure title to the property at 21st Avenue and Polk Street. But officials say that’s not likely to happen.

Records show the property contains 42 multiple housing units spread over about 15 acres. Rents are subsidized and paid to the U.S. Department of Housing and Urban Development, which now runs the Gary Housing Authority.

County officials say the the land-rich city owns about 1,200 of pieces of property scattered across several different departments.

Just this past week, the county auditor’s office reconciled with buyers of seven other city-owned properties sold at a tax sale. Another Gary Housing Authority project, Miller Heights, was rescued from the auction block last year.

The buyers get their money refunded, attorney fees paid and 6 percent interest from the county, said Randy Wyllie, an attorney for the auditor.

“We’ve got to get Gary straightened out,” he said.

That’s exactly what the city is trying to do, now. It’s retained Valparaiso attorney Gerald Stout to comb through its records and make sure properties are named correctly.

For $10,000, Sergio Gutierrez purchased the Delaney certificate at a Lake County Commissioners sale of tax delinquent properties March 29, 2012.

If a judge returns the property to Gary, he’ll get his $10,000 back, plus $600 in interest.

Mayor Karen Freeman-Wilson called the sale a mistake because government property is exempt from taxes.

“It is our position that the property should have never been sold on tax sale because the property should never have been assessed a tax,” she said. “We are aware that the county has mistakenly made such an assessment on more than one occasion, and we are in the process of meeting with all office holders to correct the problem.”

Ed Gholson, chief deputy for Calumet Township Assessor Jackie Collins, said he went to City Hall last June and told a law department official about the Delaney sale after a staffer alerted him it had been sold. The city had 120 days to redeem the property, even though it shouldn’t have been part of the auction in the first place. The redemption period expired July 27, 2012.

Gary Housing Authority sites are government property that still are assessed but not taxed.

In Delaney’s case, the owner was listed as Gary Trust & Savings Bank, not the Gary Housing Authority.

“If it would have been in the name of city of Gary or Gary Housing Authority, it would have been exempt,” said Collins.

Records show SRI Inc., the Indianapolis-based company that conducted the tax sale for the county, sent a certified letter to Gary Trust & Savings Bank, a defunct bank, with the address simply as “Polk St” in Gary in August, 2011. It was returned by the U.S. Postal Service because the address was insufficient. “Unable to forward,” was stamped on the letter.

On Aug. 21, 2012, Sergio Alberto Gutierrez Vargas filed a petition in Lake Circuit Court to obtain a tax deed from the auditor on the property, “commonly known as 21st and Polk Street,” according to the petition. It also stated that public notice to the owner of the property was done by U.S. certified mail and published in the Lowell Tribune and posted on the property as required by law.

The order for the deed was made by a court magistrate on Oct. 5, 2012 and signed by Circuit Court Judge George Paras.

On the tax deed issued Feb. 13, 2013, the property is listed under the name “Sergio Gutierrez.”

On March 6, Crown Point attorney David Braatz filed a petition before Lake Superior Court Judge John Pera seeking quiet title for the property on behalf of Gutierrez.

Neither Braatz, nor Stout, who represents the GHA, returned calls for comment. Gutierrez referred calls to Braatz.

Last month, HUD took over the management of the GHA from the city in cooperation with Freeman-Wilson in wake of a host of issues including financial mismanagement, an infestation of bed bugs in some housing centers, shoddy maintenance and a waiting list backlog, despite vacancies.

HUD official Steven Meiss, who’s been tapped to replace the GHA board of directors and manage day-to-day operations, said he and other HUD officials were unaware of the Delaney situation before the administrative receivership signing last month.

“There was at least one (housing project), maybe more, that were sold for taxes when they shouldn’t have been,” Meiss said Wednesday. “It’s come to our attention the last few days.”



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