The county government has moved to take possession of the remaining properties in a two-decade-old dispute involving a Rio Rico property developer, an elusive corporate landowner and millions of dollars in unpaid taxes.
During a meeting last week, the County Board of Supervisors voted to abate the property taxes and remove tax liens for 988 undeveloped properties in Rio Rico belonging to a company called Vatere LLC.
The county justified that action by saying that the lots had been inaccurately assessed.
The move follows a decision by the board in 2017 to put 1,375 of what had been roughly 2,400 delinquent Vatere-owned lots under the auspices of the Santa Cruz County Flood Control District, and grant a tax abatement and removal of tax liens on those properties.
“There may be a few lots still not completely cleared up after this process, but nothing like the roughly 2,400 that we have been working on,” County Manager Jennifer St. John told the NI after the May 5 meeting.
County Treasurer Elizabeth “Liz” Gutfahr told the supervisors that the dispute began when developer Rio Rico Properties transferred the lots to Vatere, with the plan that the properties would later be sold to Arizona State Parks and be left as open space.
After that plan didn’t come to fruition, the unpaid property taxes on those Vatere lots kept accumulating each year, she said.
By April 2011, the unpaid taxes on the Vatere lots had grown to an estimated $6.5 million.
The Vatere properties have certain deed restrictions in place, such as their classification as an “open space,” which forbids landowners from constructing or installing any “permanent or temporary structure or improvements” on the lots, county documents show.
Those restrictions, Gutfahr said during the meeting, cannot be removed until 21 years after the death “of the last descendant of (former President William J. Clinton).”
And while Vatere – a company that appears to have been created solely or primarily for the transaction in Rio Rico – owned the lots, county officials have previously noted that only Rio Rico Properties had the authority to lift the deed restrictions that would allow them to be developed.
Gutfahr worked for Rio Rico Properties before she was elected county treasurer in 2012. During her initial election campaign, she tried to distance herself from the Vatere controversy, saying she wasn’t responsible for the decisions that Rio Rico Properties’ corporate leadership made, and promised to “look into this issue from a different side, from a different angle.”
Gutfahr did not respond by press time Monday to multiple messages seeking comment for this story.
County documents show that the Vatere properties’ tax liens have been available for purchase since 2001, but due to the strict regulations attached to them, very few have been sold.
County officials explained in 2017 that repossessing the land and abating the taxes would prevent the county from incurring the costs of foreclosure.
“That thing has been a nightmare, and I know we spent a lot of money trying to find ways to remove the covenants on those, unfortunately, ” Supervisor Manuel Ruiz said during the May 5 telephonic meeting. “At least this way we can take possession of them and use them for the benefit of the public, and they come off our (tax) rolls.”
Moving forward, Gutfahr told the supervisors, county officials will work on selling the lots while the flood control district makes use of some of them.
“We hope to sell as many lots as possible with the restrictions attached,” St. John told the NI. “We have individuals wanting to purchase these lots as they are adjacent to their current property.”
Asked if the county had considered suing Rio Rico Properties to have the deed restrictions removed, a process that might also have cast more light on the nature of the company’s deal with Vatere, County Supervisor Bruce Bracker said: “We’ve had lawyers look at trying to break the deed restrictions.”
But in the end, he added, the current course of action looked to be the better option.