Looking for a deal on prime waterfront property?
Check out the land at the tip of Three Tree Point.
“Bill Gates doesn’t own this prominent home-site on Seattle’s waterfront. So, now you have a chance to buy it before he, or one of his friends, takes it all,” reads a promotional postcard with an aerial photograph showing the triangular property that juts into Puget Sound.
Although the assessed value of the 3,000-square-foot home and 1.6 acres in Burien, Wash., has been upgraded to more than $2 million since the postcard was printed, the owner purports to be in a hurry to sell it. It’s now priced at $1.2 million and, “believe it or not, if we have to, we will even take less.”
Make your offer to a guy named Sam, down in Auburn — Uncle Sam.
The General Services Administration, the federal government’s real-estate agent, is selling the property on behalf of its new owner, the Internal Revenue Service.
Bidding opened recently in a written auction that ends when the GSA decides the government has received the best offer it will get.
If you thought government bureaucrats were humorless and stodgy, the GSA’s marketing of one of the most valuable lots between West Seattle and Tacoma might cause you to think again.
Working from an office tucked away in an industrial section of Auburn, Wash., the public-sector entrepreneurs in the GSA’s Real Property Disposal Office keep figuring out new ways of putting money into the government’s coffers.
The GSA is selling the Three Tree Point property under a program launched in September 1995 to protect the government’s financial interests when delinquent taxpayers lose their homes.
The government will recover all back taxes and its marketing costs if it receives $1 million. Anything above that goes to the former owners, Beau and Lonnie Miller.
Beau Miller was raised at Three Tree Point, in a house that was torn down to make way for the larger home he and his father built in 1973. His family owned the property from 1937 until 1997.
Beau and Lonnie Miller, now separated, are sole owners of Elliott Bay Industries, a Seattle firm that makes heavy equipment for wood-veneer manufacturers. They fell behind in their payments to the IRS during the timber-industry downturn of the early 1990s.
They also owed money to Seafirst, which took back the deed to Three Tree Point in lieu of foreclosure. The IRS, which had a lien on the property, then bought it from the bank.
Lonnie Miller says she and her three children were given one month to vacate the property. The prospect of receiving money from the government’s resale of the house is “the only good thing” about a painful situation, she said. If the government had not bought their land, they would have lost all their equity in it.
For years, the IRS has had the authority to “redeem,” or buy, properties after foreclosure and trustee sale, but rarely used that authority because revenue officers were too busy doing other tasks. Now, with the GSA’s help, the IRS routinely redeems properties and resells them.
So far, cash payments to delinquent taxpayers — most of whom had homes worth $200,000 or less — have been negligible. That could change with the sale of the priciest home yet, the Three Tree Point property.
Bidding opened with a $950,000 offer, which was later topped by a $990,000 bid.
Ken Lindebak, director of the GSA real-estate office and mastermind of the GSA program to redeem property from IRS debtors, called the opening bids “a good start — a very good start.”
With 600 feet of shoreline and a 300-degree view of Puget Sound, Lindebak suggests the buyer could put up two houses, a corporate retreat facility or a two-story mansion on the two lots that make up the property.
Lindebak expects the property to fetch much more than $1 million — but well below a $2.8 million private appraisal and probably under the $2.1 million assessed valuation.
Written auctions typically run for two or three weeks, but GSA keeps the bidding open as long as higher offers keep coming in. The agency maintains a phone recording that reports the current high bid. Bidders who have submitted deposits can make higher bids by fax.
The bidding process, pioneered by GSA’s Auburn team five years ago, is now in use by the agency around the nation.
During the first full year of the redemption program, the IRS bought and sold 20 houses in Washington. The IRS previously redeemed only two to three houses each year in the four-state Pacific Northwest district.
Thirty homes have now been sold since the program started, adding $1.4 million to the U.S. Treasury. The program will be implemented by the IRS in California next month and in Denver this spring. If adopted nationwide, it is expected to boost federal revenues by $16 million a year. That’s a drop in the bucket of the $5.5 trillion national debt — but more than no drop at all.
In October, Vice President Al Gore gave a “Hammer Award” to the GSA and IRS for the property-redemption program. The Hammer Award is a plaque displaying a $6 hammer in memory of the scandal once sparked by the government’s purchase of common hammers for $400 apiece for the military.
“We think it’s a real good example of reinvention of government,” said IRS spokesman David Haikin. “It makes use of the resources we have. Instead of doing things the same old way we always have, it makes use of people in agencies who have expertise in a particular area.”
The four-member team has auctioned surplus government properties and properties seized by the U.S. Marshal Service. In 1991, the team borrowed a 1929 Packard Phaeton 645 convertible to illustrate its brochure for the Gatsbyesque estate of a money launderer in Lake Oswego, Ore. In 1992, the team sold the Lake Washington home of a Seattle drug dealer to a Microsoft executive. Both mansions were sold for more than the appraised value.
