The borough of Penns Grove in Salem County, New Jersey is auctioning off properties it has owned for at least the last couple of years. It’s part of boosting the number of homeowners in the community, while making some much needed money.
The borough receives what is called “transitional aid” from the state which requires some oversight, according to Sean Brown, the borough’s business administrator and economic development coordinator.
“There’s certain rules that we have to follow,” he explained. This is different from the state’s takeover of Atlantic City, where the state had full control of how the city functioned in order to fix the city’s fiscal woes.
“Our state monitor required that we raise more money in the borough to basically, as the mayor says, ‘get off welfare’ so that we can manage our finances, our hiring and all with full sovereignty,” Brown said.
The borough had aggressively acquired properties through foreclosure, since at least 2019, due to unpaid taxes, according to Brown. Out of 1,800 properties in the one-square mile borough, it owned 97 properties at one point.
An online auction for 60 properties began on Tuesday with bidding expected to end on Thursday. It will not only put the properties back on the tax rolls, but the borough will make some money that will be put towards future projects like developing the waterfront.
“The money won’t even be close to actually developing the waterfront,” Brown said. “It can help fund the work that has to be done in terms of paying for some expenses that comes with economic development.”
To make the process open, efficient and fair, the borough enlisted the services of Max Spann Real Estate and Auction Company to manage the sales.
“Anyone can participate provided that you follow the terms of the sale of the offering,” said Max Spann Jr., who adds that bidders need to be registered and pay a deposit that is refundable should nothing be purchased by the participant.
The company has managed similar auctions for Atlantic City, Trenton and Philadelphia in the past. Spann said that early indications show that the Penns Grove auction is a foreshadow of things to come.
“I think it’s really positive news for that part of the state that, now, interest has grown for those areas where people think that this is the next growth opportunity,” he said.