STANISLAUS COUNTY — It was supposed to become a luxury home community in the hills above Patterson, but the 52-acre Diablo Grande Legends project racked up more than $14.5 million in debt before being foreclosed on by a bank in 2009.
Five months later, that bank went belly up.
Stanislaus County's tax collector now hopes to auction off the property for as little as $626,100. That's what government agencies are owed in unpaid taxes and fees.
While that price sounds like a bargain, county officials fear no one will bother bidding.
The land's assessed value is only $316,011 these days, and the property is in the financially troubled Western Hills Water District.
"It's a big mess," said Stanislaus' Assistant Treasurer-Tax Collector Jegan Raja.
That's not the only messy parcel the county wants to sell Feb. 27 during its annual tax-default auction. Those properties are at least five years behind paying taxes, and the government wants its money.
More than 50 not-so-lovely homes and lots will be up for grabs at the 8:30 a.m. auction. Bidding for most properties will start at less than $20,000.
Seven of them are on Angle Lane in Modesto's airport neighborhood.
An investor paid more than $1 million for those properties in 2006, just before the region's real estate market crashed. The homes haven't fared well since.
"They're an eyesore, and people are complaining about them," Raja said. The Angle properties have been vandalized, burned and turned into dump sites. "We may not be able to sell these properties this year."
That's because the law requires tax collectors to initially set the minimum bid at what the government is owed in back taxes.
For the home at 118 Angle Lane, that's $9,800. But Raja doubts that the burned shell surrounded by garbage is worth even that.
Last year, the county tried to sell the house at 126 Angle Lane for $16,500. No one bid. That home is back up for auction, and because it didn't sell last time, the law allows its price to be lowered. The new starting bid is $13,000.
But fixing up or demolishing such a home could cost more than the property would be worth, Raja said.
"So how would you get your money back?" Raja asked. "Who's going to take that risk?"
Prices for eight other properties that didn't sell last year also have been put on this month's auction at lowered prices.
There are some nice homes on the auction list, too. Those homes, however, may not make it to the auction. That's because homeowners still have time to pay their taxes or file for bankruptcy protection to save their property.
The tax collector's office updates its online auction list daily at www.stancounty.com/tr-tax/auction/index.htm. Photos, maps and more information about the properties are posted there.
Last year, 10 properties sold at auction for a combined total of $339,000.
People interested in buying at this month's auction should be aware that all the properties are sold "as is" with no guarantees.
That means they could have hidden problems, such as ground contamination, faulty wiring or mold. They might be in remote locations that are difficult to access.
The properties might have checkered pasts, with numerous liens muddying their titles.
Property bought at the tax auction comes with land title that is "free of all encumbrances of any kind existing before the sale," but there are numerous exceptions to that rule.
The properties, for example, still must pay bills for things such as school bonds and Mello-Roos taxes.
More details about auction and bidding terms are posted on the county's Web site: www.stancounty.com/tr-tax/auction/index.htm.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or (209) 578-2196.
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