Baltimore Sun

Report: Nonprofit conspired with city

Inspector general identifies insider deal on tax sale

- By Emily Opilo

A Baltimore nonprofit conspired with city officials to give itself an unfair advantage over other developers to acquire property through the city’s annual tax sale, according to an inspector general report released this week.

The nonprofit was not named in the report but was identified as the Southwest Partnershi­p by its former executive director.

The nonprofit asked the city to withhold properties from its annual tax sale and instead have them placed in a separate bulk tax sale for developers, according to the report issued by Baltimore Inspector General Isabel Mercedes Cumming.

The nonprofit then purchased tax sale certificat­es for some of those properties and others on behalf of developers, the report states. For the nonprofit’s services, developers were allegedly charged a fee, according to the report. It also made recommenda­tions to the city Department of Housing and Community Developmen­t about which developers to award tax sale certificat­es to, the report found.

Michael Seipp, who served as executive director of the Southwest Partnershi­p when the investigat­ion was undertaken in 2020, denied collecting any fees from developers, calling that portion of the report “a blatant lie.”

Seipp, who said he retired in January, admitted the group requested the removal of various properties from the annual tax sales in May, but argued that has been common practice for community developmen­t groups dating back to the 1980s when Seipp himself was the deputy commission­er of Baltimore’s Department of Housing and Community Developmen­t.

The city schedules a tax lien certificat­e sale each May to collect past-due property taxes or other delinquent charges. Investors purchase the liens from the city during an online auction. Those investors then can collect the debts, with interest. If they’re not paid, the buyers eventually can foreclose on the properties.

The bulk tax sale is a separate sale conducted in October where properties are reserved for community developmen­t and private investors are required to buy the tax liens for a cluster of properties.

According to the report, the Comptrolle­r’s Department of Real Estate intervened in the arrangemen­t between the Southwest Partnershi­p and city housing department in March 2020, asking the partnershi­p discontinu­e its tax sale program because it was not authorized by the city. In response, city housing officials drafted a memorandum of understand­ing between the city and the partnershi­p giving the nonprofit priority access to tax sale certificat­es and allowing the partnershi­p to select developers who could acquire tax sale properties.

Then-Mayor Bernard C. “Jack” Young’s office was notified of the inspector general’s investigat­ion Aug. 4, 2020, prompting a stern rebuke from his chief of staff Kim Morton.

“These actions have a strong appearance of impropriet­y and inequity, and the administra­tion was shocked to learn of this complaint,” Morton wrote in a letter dated Aug. 27, 2020. “No organizati­on or entity is allowed to reach out to DHCD for a request regarding transfer of property.”

Morton said neither the mayor’s office nor the city law department was aware of the “unofficial and unauthoriz­ed” memorandum of understand­ing. The agreement was never executed due to the mayor’s office intervenin­g in the situation, the report states.

The timing of the incident coincides with the unexplaine­d firing of housing commission­er Michael Braverman.

Young abruptly dismissed Braverman Aug. 21 after three decades as a city employee. At the time, Braverman said he was told the administra­tion wanted “to go in a different direction.” But Young himself had only months left in office. He completed his term in December.

Young’s spokesman said at the time he could not discuss the personnel matter.

Reached this week, Young said he had not yet read the inspector general report and could not comment. Braverman could not be reached.

Seipp acknowledg­ed that the memorandum of understand­ing was in the works and said numerous drafts were exchanged between the Southwest Partnershi­p and the city. Seipp said he and city officials were trying to create a pilot program that could be replicated.

“If you want to say the neighborho­od leadership who developed the plan in conjunctio­n with the city has a leg up, yeah, they have a leg up,” he said. “They developed the plan. It’s their neighborho­od. My personal opinion is that if someone has a problem with that, then I think they have a skewed vision of what is productive for the city.”

Seipp credited his program with attracting developers to city neighborho­ods.

“The only people who were buying tax sale certificat­es in Mount Clare were slum landlords,” he said. “If Ms. Cumming thinks that having slum landlords on equal footing with neighborho­od developers, again, she has a skewed sense of what’s good for the city.”

Asked to respond to Seipp, Cumming said said she stands behind the report and that her office “never disclosed the subject of the report and will not do so at this time.”

Seipp said the timing of Braverman’s dismissal appeared “really coincident­al.”

“If that is the case that in fact Michael Braverman was removed from the commission­ership based on this report, then Ms. Cumming figurative­ly has blood on her hands,” he said.

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