This is the second installment in a three-part series of solutions examining adjudicated properties in Lafayette. Read the first part here.
Even a fast government may be too slow for the real world. In recent years, the number of orphan properties, de facto wards of the consolidated Lafayette government, has reached more than 1,500, some abandoned for decades and buried under a mountain of tax debt. LCG has started to tackle the problem, but some see it as a lack of urgency. The process is laborious and expensive.
It’s a feature, not a bug.
“It’s onerous, it’s time-consuming, it’s expensive, but it’s necessary,” says Ryan Goudelocke, assistant city and parish attorney and legal architect of LCG’s disposition process.
The system of exhaustive vetting that paces Lafayette’s disposition process, however, is designed to prevent properties from falling back into auction, Goudelocke says, and dispel any lingering doubt that title might later be challenged. Proper title is everything, if the objective is investment. Better well than never.
“We wanted to do everything we could to deliver title with as much clarity as possible to increase the likelihood that the properties we had would stay out of auction and, more importantly, stay in use.” , explains Goudelocke.
To that end, LCG’s order requires contestants to perform all the trappings they can to eliminate potential title claims.
If an owner does not come forward, LCG deploys four modes of “disposal”, favoring adjacent landowners, who maintain the property for a year and can buy it at a lower cost, and associations, who can acquire it by donation. . All others, including commercial developers large and small, must buy them through public auctions, offers, or arm’s length transfer.
Most of the 177 properties returned to productive use were returned to non-profit organizations and adjacent landowners. Few commercial developers or individuals have come forward. Meanwhile, properties sit and skepticism sets in.
Erica Fox, real estate developer and co-founder of the indigenous art store Attakapas Collective, has unsuccessfully targeted a few properties over the past two years. Going through the disposal ringer and walking out with nothing often discouraged her. Fox spent time in New Orleans, where she observed a faster and easier process run by the company CivicSource, which operates an online auction system on behalf of New Orleans.
“When you’re just a normal person on the street, it’s a little harder,” Fox says. “I didn’t have a non-profit organization and I didn’t live next to an existing property. That’s a lot of steps for one person.
The fact that many communities offload their provision to other organizations is itself something that sets the Lafayette process apart, at least in Louisiana.
“The biggest difference is that we rode our own and we do it ourselves,” says Goudelocke.
Most of the properties are abandoned, with no clear line of succession. To walk away with free and clear ownership, candidates must pursue all possible leads to silence any potential legal claims. These requirements are defined by state law, but the Lafayette ordinance also requires applicants to post a sign on the property signaling their intention to acquire it. Again, this serves two purposes: one, to calm the title down completely, and two, to get the neighborhood involved.
All that letter writing and legal research quickly adds up to thousands of dollars in legal fees. It is not uncommon for the bills to exceed the market value of the property. And the applicants believe it: at any time during the notice period – either 60 days for properties that have been on trial for five years, or six months for those that have been on trial for less – someone could step out of the fog and claim the property. In other words, the system is high risk, low reward.
“The numbers just don’t make sense,” says RJ Fonseca, one of the few lawyers to work with auctioned properties. Fonseca helped developer Terrica Lynn Smith broker a deal to unlock 53 arbitrated parcels, the remnants of a bankrupt subdivision project, in an arm’s length transaction to create Madeline Cove. The project is something of an anomaly. Whole developments don’t fall into arbitration very often. And the original landowners actively participated in the deal, transferring title clear as day.
Still, running the gamut of all the tax collectors who had a stake in the languid development’s $140,000 tax liens took two years of meetings and $20,000 of legal bills. It was a big effort that required the active participation of LCG. Smith credits the Robideaux administration with managing the project.
In November, Smith sold the first home in Madeline Cove. She cried.
“It was very emotional for me, because it’s been hell, to be honest the last two years of my life have been hell,” she says.
Later, she looked at another property across University Avenue from Madeline Cove, tucked behind the Bridge Ministry School. His back-of-the-napkin calculations put the legal fees at $10,000, far more than the value of the property. She left.
“It’s primarily set up for neighbors and then for nonprofits, because those are the two parties that don’t have to spend a lot of money initially,” Fonseca says.
Is this such a bad thing? Maybe not. The drafters of Lafayette’s disposal process say it’s intended. Former city councilor Kenneth Boudreaux worked for years with Goudelocke to craft a program that would protect neighborhoods from gentrification. Meanwhile, LCG has fended off interest from third-party brokers who have accelerated the sale of properties in other communities. For Boudreaux, LCG’s disposition process isn’t the problem; it is a lack of priorities.
“Resources were supposed to be invested in it,” Boudreaux says. “By now, the process should have been on the road and wide open.”
To some extent, the process East further down the road. The pace has picked up, in part thanks to recent changes to the ordinance. In 2021, the Guillory administration and council members lifted bans on rental properties, attracting interest from community housing development organizations and some commercial developers. The change included provisions that subject owners to code inspection, aimed at keeping owners away from sleep.
But a key bottleneck remains: LCG has one person on staff responsible for handling claims. Time and time again, the contestants and developers interviewed for this story pointed to this issue. Other communities are deploying outside agencies like land banks and redevelopment authorities with millions in assets to take on some of the legal risk and dedicate more manpower to the problem. In Lafayette, there is Kirk Trahan.
A fully staffed and resourced redevelopment authority could do the trick by taking on the costly legal work and preparing the properties for disposal. Lafayette has one on the books that never took off and became political football in 2021.
Or maybe additional planning staff is needed here. Councilman Glenn Lazard says there are “some discussions” about staff capacity, including a decision to hire more environmental quality inspectors. Mary Sliman, Lafayette’s planning director, says planning staff are “well staffed” to handle the volume of requests, saying a redevelopment authority would be a better way to deal with a “more aggressive strategy”.
But does Lafayette really want an aggressive strategy? It is not clear. Some worry that uncorking the bottle too quickly could lead to gentrification if mailbox companies snap up properties by the dozens and sprout condo developments that cost the neighborhood dearly.
This is a legitimate concern, and one outstripped by Lafayette’s current approach, but at what cost, some residents wonder.
“Sometimes we are afraid of things that don’t really correspond to reality,” says Erica Fox. “But if they’re coming to improve our city…why not?