Sunrise: What can be done?

The city of Havre has few options for dealing with the outside company that has been acquiring properties in Havre and neglecting them.

For the last three days, a series of articles have focused on a company, Sunrise Financial Group LLC, that buys properties all around Montana through tax liens. The company owns many properties in Hill County and holds even more liens.

Sunrise's Havre properties are abandoned and run down, causing additional blight in a town short on available housing.

The abandoned structures are covered in a veneer of dirt, widows are cracked or boarded over and cracks run along the outside walls. Locals who wanted to buy some of the properties have gotten nowhere. People associated with Sunrise have refused to answer why no one keeps up the properties and why they are reluctant to seriously entertain interested buyers.

People associated with the company denied Havre Daily News an interview and haven't answered emails.

Nothing in this investigation has indicated Sunrise is breaking any laws. Buying property tax liens is not against the law. Being an absentee owner is not against the law.

Hill County Planner/Sanitarian Clay Vincent said the junk cars behind the 5th Avenue apartments aren't breaking any city ordinances.

As long as they can't be seen from the streets, they are within code, he said, adding that the junk cars can be towed away for free by the Junk Vehicle Program. Property owners simply have only to call Vincent's office to organize the pickup.

As for implementing stricter ordinance in areas where homes or buildings are an eyesore, both Vincent and City Council President Andrew Brekke said the new rules would not apply to old properties because the old ordinances are grandfathered in.

Vincent said Havre can condemn the properties, but it wouldn't be practical because it is a long process.

The last time the city condemned a property, it took five years for the process to run its course, despite the building having been burned beyond salvation, Vincent said.

The cost of condemning a property is another major problem, and Vincent said taxpayers will most likely lose money.

Condemnation starts with the city taking over the property by paying the owners for it. Then comes the cost of tearing down the building or buildings and cleaning out the rubble. Taxpayers are hit with additional costs in lost property taxes, which increase the longer a property is not generating property taxes.

By the time the property sells, the revenue from the sale likely would not recoup the costs it took to get there because property values in Havre are not high enough to do that.

However, considering the condition of some of Sunrise's properties, Brekke said, there is a good chance they can be condemned on safety grounds.

That is "usually where the hard part comes in," Brekke said, referring to the long, arduous process of condemnation.

"OK, we want to get rid of an eyesore and a safety hazard - but then what are we going to do with it? It might increase property values for the people around it. We might actually get some more tax revenue for it - but what ultimately is that piece of property going to be used for? Playground, sold back into the private system - and what are they going to do with it? And is the ultimate result good for the community as a whole?" Brekke said.

The next step, Brekke said, would be to create an urban renewal zone, which is an intensive process.

"You're actually creating a government body. You have to have a committee, and they have to run it, and they have to hire a manager," he said.

Brekke said urban renewal zone work in zones, and Sunrise has shoddy buildings spread all over Havre. So the situation would require multiple urban renewal zones.

The last option Brekke mentioned was a port authority.

"The point is that's an avenue where a government entity - it operates like a private entity but it's government-owned - goes into debt, purchases property and operates as a profit. Government bodies are not permitted to operate as a profit. So we can't build an apartment complex and rent it out - but the port authority could," Brekke said.

Brekke said that the supposed profits made from a hypothetical apartment complex would go into funding the next city project. He said that Butte, Billings and Shelby are cities that utilize a port authority.

Brekke used Shelby's mayor as an example of how to make the most of a port authority.

"He's got a private prison that he built there, Corrections Corporations of America. This guy has ideas like you can't imagine," Brekke said, incluidng expanding the airport to allow 737s to land and federal prisoner transportation by Conair.

"How does he do that? They created a port authority," Brekke said.

Despite its problems, Brekke said, condemnation is the most realistic option Havre has in dealing with the blighted properies. Havre will most likely not need to build a bridge or a pipeline or other municipal infrastructure that would need to go through any of Sunrise's properties, taking the option of eminent domain off the table.