Noah Kim Photo
Vincent Cervoni with Kenneth Richardson III at the auction.
A mortgage-fraud scammer destroyed a property in Newhallville. Now the lot was up for grabs — and neighbors worried that another outsider would come in and continue to prey on the neighborhood.
The property in question is at 88 Hazel St. It was one of dozens of properties scooped up by a team of conspirators — including a rabbi, a police commissioner, an appraiser, and a former state representative — pocketed hundreds of thousands of dollars through mortgage fraud while letting buildings rot. The feds caught the conspirators (read more about that here); 88 Hazel, meanwhile, was so rundown it had to be demolished.
On Saturday a court-ordered foreclosure auction took place at the property. Several neighbors showed up hoping to bid on the property, or at least see it be sold to someone who lives in Newhallville and will put up a new house and care for it.
The city brought the foreclosure action to collect on back taxes. It also put in a a starting bid on the lot at $16,400, was well above its appraised value of $12,000. Prospective bidders were also made aware that they would have to pay an additional $1,204.50 in back taxes to the city upon acquiring the property and that they would have to acquire a variance before attempting any building or development.
Paul Bass Photo
88 Hazel before it was torn down.
Two people participated in the foreclosure auction: Crystal Bailey, whose mother owns the lot adjacent to 88 Hazel, and Kenneth Richardson III from the Hazel-Shelton Land Trust.
As the time of the auction drew near, at least two more prospective bidders showed up, only to be scared away by the high asking price.
“Why would I buy this lot when there are bigger ones in the neighborhood going for $10,000” one of the would-be bidders grumbled.
Both Richardson and Bailey were reticent about their plans for the property. Richardson said that his future actions would “depend on what the government lets me do.” Bailey declined to comment.
Vincent Cervoni, the lawyer appointed by the court to administer the auction, began the sale promptly at noon. Richardson kept a pair of Apple headphones in his ears as Cervoni explained that the property would be sold clear of the water and sewer liens that had been accrued by the previous owner before the lot had been foreclosed. One of Bailey’s family members listened in on the proceedings over speaker phone.
Bailey began the auction by challenging the starting bid of $16,400 with a bid of $16,500. Both she and Cervoni glanced toward Richardson, who remained silent.
“Going once … going twice … the property is sold to bidder #2 for $16,500,” Cervoni confirmed.
Both Bailey and the family member on the phone began to laugh with relief.
Noah Kim Photo
Crystal Bailey seals the deal.
Newhallville residents Karl Harris, Melvin Griffin, Ron Low and Shelton Brown watched the sale from up the block. Brown himself had considered entering the auction but eventually opted out when he learned of the city’s high opening bid.
All four men voiced their frustration with the city and with investors from outside the neighborhood buying up property around Newhallville.
“Why should New Haven bid?” said Harris. “There are a lot of people from around here who’d want to own their own home, and it’s not like they don’t have money. They just want to buy land at a reasonable price.”
“It’s the city and it’s outside bidders from Boston, D.C., New York,” said Brown. “My wife was at a neighborhood meeting last week, and outside bidders are everybody’s main concern.”
Harris, Griffin, Low, and Brown were excited to hear that Bailey, a Newhallville resident, had won the lot at auction.
“We know her really well,” said Griffin. “It’s good to see it going to someone from around here.”
Given that the next door neighbor bought the lot, I don't see how people who live near this property were shut out from buying it. Moreover, as I recall the original intent of LCI, it was to take and raze blighted buildings, then increase the value of adding buildings by selling the lots to the adjacent owners, thereby increasing lot size, allowing for yards and off-street parking.