Mayor Parker is now working with Sheriff Bilal to resume auctions of tax-delinquent properties

It’s been nearly three years since Philadelphia Sheriff Rochelle Bilal has held an auction to sell off the city’s tax-delinquent properties. Tens of millions of dollars in tax revenue has gone uncollected. Abandoned properties can’t be redeveloped.

City Hall’s patience has been wearing thin.

But the stalemate appears to be over.

During her first budget address on Thursday, Mayor Cherelle L. Parker announced that she had been meeting with Bilal, Council President Kenyatta Johnson, and solicitor Renee Garcia.

“Together, we all recognize the need to have tax sales up and running,” Parker said. “Today, I am pleased to announce that the Sheriff’s Office is now working with the law department to resolve this issue in the next four weeks, with the goal of the first sale occurring before July 1, 2024.”

Parker said the pause on sales has cost the city and school district an estimated $35 million in tax revenue — “Dollars that could have been invested in classrooms and in rec centers or on building affordable homes,” she noted.

Neither Parker nor Bilal immediately provided any details on the compromise.

Auctioning tax-delinquent properties — in many cases, vacant lots and abandoned buildings — is one of the core functions of the Philadelphia Sheriff’s Office. In-person auctions were initially paused in March 2020 in response to the COVID-19 pandemic. Then, in March 2021, Bilal announced a plan to hold virtual sales through Maryland-based online auction company Bid4Assets.

However, Bilal’s staff had awarded the lucrative contract to Bid4Assets without the involvement of the city’s law department, which violated city contract guidelines and raised legal concerns among City Council members — including then-Councilmember Parker.

The tax sales briefly resumed online in April 2021, but for the last three years, all sales have quietly remained on hold. That has led to a backlog of hundreds of properties that would have otherwise been sold and, ideally, returned to the tax rolls.

» READ MORE: Philly’s sheriff hasn’t held a tax sale in years. The city says it’s costing them millions.

Since January 2022 alone, The Inquirer has reported, the city has gone to court to secure orders authorizing the sale of roughly 1,330 tax-delinquent properties. But the sales haven’t been executed.

That has contributed to an increase in property-tax delinquency, according to a recent city finance report, with the unpaid balance growing by about $40 million since 2019. Property owners, including speculators sitting on vacant lots, have essentially been free to ignore court notices warning of auctions.

“The lack of sheriff sales continues to challenge the city’s delinquent tax collection efforts,” the report states. “As a result, delinquency has gradually increased.”

Meanwhile, abandoned properties continue to deteriorate — even when there is high demand to purchase them for rehabbing or redevelopment. At a partially collapsed Italianate-style building at 36th and Race Streets, for example, would-be buyers have been taping their contact information to the front door, in hopes of buying it.

The reason for the three-year stoppage depends on whom you ask. Just two months ago, Bilal and the Parker administration were blaming each other.

After dodging questions for nearly a month, Bilal in January accused city lawyers of failing to send along copies of court decrees that legally authorize her office to auction individual properties.

“The attorneys assigned to represent the city in tax delinquent sales must submit documentation to the Sheriff’s Office for the sale to proceed,” Bilal said in a statement. “Plainly stated, the Sheriff’s Office cannot initiate any tax delinquent sales that are not ordered by the court.”

» READ MORE: ‘Where is the money?’ Ex-homeowners seeking leftover funds from sheriff’s sales are being stonewalled.

Parker, who appoints the city solicitor, had rejected Bilal’s explanation that the law department is the problem.

“This is wholly a matter for the Sheriff’s Office,” Parker spokesperson Joe Grace said in January. “They need to explain what they are — or aren’t — doing with regard to these tax sales.”

The logjams appear to have been tied to the dispute between the city’s law department and the Sheriff’s Office over the Bid4Assets contract.

The unusual contract has been a head-scratcher in City Hall since it became public in 2021. Bilal’s office at one point that year had claimed it was using Bid4Assets as part of a a “pilot program.” But, soon after, the office disclosed that the original contract was actually for six years.

Competing online auction firms say they were not able to submit their own proposals. Bid4Assets seemed to have an inside track, they said, and ultimately landed what they described as a sweetheart deal. “It was an odd process from beginning to end,” Lloyd McClendon, chief executive of Realauction.com, said last year.

Regardless, Parker sounded optimistic on Thursday that the city could get the auctions running again.

“These sales will generate millions of dollars in revenue for the city and school district, and help transform neighborhood blight into homes and gardens,” Parker said.

The mayor publicly thanked Bilal, who was in attendance for the budget address. She described Johnson as the “chief mediator” in reaching a compromise.

“I look forward to working with you,” Parker said of Bilal. “Give our sheriff a huge round of applause.”

In anticipation of the resumption of tax sales, Councilmember Kendra Brooks on Thursday introduced a bill, backed by Parker, that would preserve the Land Bank’s ability to bid on properties that go to auction. The main goal of the bill is to ensure that community gardens with old tax liens remain intact as gardens.