Vacant property ordinance proposal sent back for revision by attorney

The Havre mayor and a city council member are at odds over a city attorney's recommendation on a proposed ordinance covering vacant properties.

An attorney representing Havre from Hi-Line Law told the city last Tuesday that a proposed vacant property registration ordinance would not be in the city's best interest if the ordinance was passed. 

"I have reviewed the Vacant Property Registry Ordinance, and as I said in my last email, I do not believe it is in the city's best interest, liability-wise, to pass this ordinance," an email from Hi-Line Law owner and attorney Jennifer Forsyth to council member and Ordinance Committee Chair Caleb Hutchins and cc'd to Havre Mayor Tim Solomon, said. "After doing some research, my position remains the same on the liability exposure, and the enforceability issues."

Hi-Line Law did not return calls made by the Havre Daily News requesting clarification on the legal issues.

The city has been looking at some kind of ordinance to cover vacant properties since Samantha Clawson, now director of Head Start at District 4 Human Resources Development Council and wife of Caleb Hutchins, came to the council in 2016 to voice concerns about dilapidated vacant property in Havre.

One of her concerns was about property owned by Sunrise Financial, a Great Falls-based company that owns multiple properties in and near Havre it was not maintaining and would not sell at prices close to market value. Sunrise also owns properties in and near other communities including Chinook and Big Sandy

Solomon created an ad-hoc committee to look at the issue two years ago, which included Hutchins and Clawson as members.

Havre City Council Ordinance Committee voted in June to send the proposal to the city attorney for review before it was sent to the full-council.

The proposed VPRO regulations would include requiring property owners of vacant properties to register their properties with the city and potentially pay a fee. 

Hutchins said creating a VPRO enforcement officer position was a concern during the committee meetings, but committee members and Havre Public Works Director Dave Peterson agreed the position would fall under public works, which enforces the city weed violation ordinance. He added that if the main concern is the enforcement officer the committee could revise the ordinance. 

"But that's not a deal-breaker in my mind," Hutchins said. "That's a small detail in a much larger picture."

Solomon said the issue is not the position of a VPRO enforcement officer, the issue is the enforceability of the ordinance itself. 

"It's the same concern that, I guess, I've had all along, as far as enforcing something, a registration of private property," he said.

The city has to have grounds for enforcement, he said. He added that it's not a question of who enforces it, the city has the police department as well as public works enforcing ordinances, but without proper grounds, any case if taken to court will be thrown out.

"That's where the problem is," he said. "... If you write an ordinance that the courts are going to throw out, why are you writing the ordinance?"

Hutchins said the VPRO is important for the city. The city has a number of vacant properties which are in poor condition, which are owned by both local people and out-of-town companies. He added that anyone can drive around town and see them and see the broken windows, the boarded up doors and the crumbling structures. These properties could be used if they were cared for by putting them on the market, making them rentals or in come cases demolishin them so the lot can be used for something productive.

"I don't know what the next move is right now," he added. "Although it's always nice to have the support of the city's legal council to do this stuff in that manner, I don't think that we are required to get her permission to send an ordinance to the full council for a vote."

Hutchins said he requested clarification on the issues Forsyth found in the VPRO, but he has not received any more information.

He added that he would prefer to go through the proper procedure and be able to work out the details and concerns to find a solution. But with no further information he and the committee don't know what will happen next.  

"Currently, there is no incentive for those property owners to do anything with those properties," he said. "They pay so little property taxes on them that they can simply let them sit and rot."

He said that since the ad-hoc committee started discussing the VPRO, he has seen at least one local property owner of some of the vacant properties start making improvements. Hutchins said he doesn't know if it was the VPRO which encouraged the owner to make improvements, but it does look as if the owner is making a good effort to make improvements.

From out-of-town owners, he hasn't seen any movement he was aware of, he said.

Records show that Sunrise has started doing some work on some of its Havre properties, and they have gone up in value.

The Montana Cadastral shows that one of the properties being worked on, located on the 1200 Block of Washington Avenue, had increased in total property value since last year by a total of approximately $16,300. 

A second property, located on the 1300 Block of Fifth Street, also increased in value by approximately $16,144, but had changed hands in the past year to Community Restoration Asset Properties LLC - which is owned by Southwest Investments LLC, which is owned by Investment Property Managers LLC, which is owned by The Parent Company LLC, which also owns Sunrise Financial and is owned by Sunset Asset Management, which is owned by Investment Property Managers. 

Sunrise Financial did not return several calls the Havre Daily News made requesting comment.

Hutchins said the goal of the VPRO is to encourage people to take care of their properties.

"If they have been doing work and have a plan to either rent them or sell them or use them, then I think that's fantastic," he said.

The main scope of the ordinance is not targeting any particular company, Hutchins said. 

"If it didn't go anywhere, then we would maintain the status quo, which is the slow gradual decline of these properties," he added. "They will get worse and worse and eventually roofs will start collapsing and more windows will be broken and they'll drive down the values in those neighborhoods. I don't see anything changing for some of these properties unless there is some sort of enforcement mechanism."

Solomon said that it is only part of a larger picture. It's not only the issue of vacant properties, he said, but dilapidated and uncared for homes in general. The city has several occupied and unoccupied buildings that are in poor condition and need to be addressed, but addressed in the proper way.

Sunrise Financial, although it is used as an example, is working on its buildings.

"They are not our problem," he said.

He added that when he established the ad-hoc committee, he wanted the committee to look into the overall problem of blight in the area, not just vacant properties and not just Sunrise. The ad-hoc committee also used out-of-state areas as a template for the VPRO and did not look into Montana Law, with Montana having stricter property rights laws than many other places.

Solomon said now that the proposal has gone to the city attorney it will have to go back to the ordinance committee for more discussion.

He said he supports the concept of the VPRO, but not the application the committee chose to go about it.