Nobody has bought more tax sales certificates on properties in the city of Watertown than a Marietta investment firm during the past five years.
Since 2007, ICA Renovations III LLC has paid more than $1.1 million to gobble up tax sales certificates for 431 properties in the city, according to data provided by the city comptrollers office.
But the investment firm and its principal, Brian A. Bromka, ended up owning only a handful of those properties. Mr. Bromka received the deed on just four small single-family houses and he quickly resold three of them, according to the comptrollers office. His name is listed for only a four-bedroom house at 222 Moulton St. It is assessed at $47,800.
So why does Mr. Bromka spend so much time and money at the citys annual tax sale certificate auction if he comes away with so few properties?
His firm makes money maybe a lot of it just holding on to the certificates.
He doesnt want the property, said City Assessor Brian Phelps. He doesnt want to be a landlord. Thats not his game, or at least it appears.
The certificates are good for two years. If at any time the property owner pays the back taxes, the certificate is nullified and the city pays the proceeds, which includes 12 percent interest a year, to the certificate holder.
At the end of the two-year cycle, he can either accept the deed on the property or it reverts to the city.
City officials speculate that Mr. Bromkas strategy is simple: He is interested only in certificates owners will pay back on the unpaid taxes within that two-year window. If that happens, ICA Renovations earns what could be a hefty profit on its investment especially considering the instability of the stock market over the past five years, and the low interest yield from banks. Watertown Savings Bank, for example, has a two-year certificate of deposit rate of 0.66 percent per year, while tax certificates pay 1 percent per month.
And the longer it takes them to pay, the more money he makes, they said.
Twelve percent isnt bad, Mr. Phelps said.
How much money he has made on the investments over the years is anyones guess. Comptroller James E. Mills has no idea.
On Tuesday, ICA Renovations was the most active bidder at the auction. The company paid $187,295.61 for 56 certificates it was awarded.
During the auction, Mr. Bromka held sheets of paper in front of him with a color-coded list of addresses. Its not clear what the different colored symbols meant because Mr. Bromka would not comment on his transactions at the auction. On Thursday, he also refused to comment about why he does what he does.
Youre covering it. Thank you very much, he said. I think youve got everything.
The city comptroller said Mr. Bromka comes into the comptrollers office to pick up a list of the properties a day or two before the auction. He assumes that Mr. Bromka then goes out and looks at the properties before deciding on which certificates he will bid.
I think he does his research, Mr. Mills said.
And it looks like Mr. Bromka knows what hes doing, city officials said. Occasionally, he takes a gamble. ICA Renovations bought the certificate for the vacant Masonic Temple and almost ended up with the landmark at 246 Washington St. until he arranged for a $17,500 mortgage with Henderson artist Garrett L. McCarthy. Mr. McCarthy is now obliged to pay the $16,179.02 in taxes owed on the property.
ICA Renovations could have ended up with the mammoth Mercy Care nursing home complex this year, but Samaritan Medical Center, which is slated to move out of the complex in March, stepped in last fall and paid off $211,159 in back taxes that the Stone Street propertys owner, MGNH Inc., had owed.
Mr. Mills said Mr. Bromka took a small loss on a deteriorating house at 1 Boyd St. on which he decided not to accept the deed. Instead, the city took over the property and demolished the house.
Its now a vacant lot, Mr. Mills said.