City high bidder, acquires properties

The City of Platteville acquired 15 properties of former landlord Darrell Kallembach in a sheriff’s sale on Jan. 15.

The Platteville Police Department issued citations to Kallembach at the request of the city’s building inspector, Chief of Police Dough McKinley said.

The police department began issuing the citations, which faulted him for failure to follow rental code policies, in 2008.

In July 2010, the city sued Kallembach for the over 100 unpaid citations the police department had issued him.

“(In March 2011) the judge gave a lean of nearly $309,000,” City Manager Larry Bierke said.  “And when you include the 12 percent interest that has accumulated, it comes to a total of $366,765.38.”

The city used the money won in the lawsuit to bid on the 19 seized properties scattered throughout the city.  The city was the highest bidder on 15 of the properties, spending $288,341.96.  The remaining properties were sold to private bidders.

“Our intent was not to get into the property ownership business,” Bierke said, “so we wanted to encourage people in the public to bid.  The city provided the opening bid and that was pretty much it.  We let the other bidders go from there.”

Though the city and private bidders won the auction, they are not allowed to enter the properties for the 15 months following the day of the final sale.

During this 15-month “redemption period” Kallembach has an opportunity to pay the over $300,000 he owes the city.  If he does pay the city, he can reclaim the 19 properties whose combined assessed value totals over $1.4 million.

However, should he fail to reimburse the full amount, the city will have full control of the properties and can decide upon what will be done with them.

When asked to discuss the issue of what the city will do in 15 months should Kallembach be unable to pay, Bierke declined to comment under advice from his attorney.

“Our job here was to recover the money that was owed to the city,” Bierke said.  “It was not to take ownership of the properties.”

Ken Kilian, a member of the Platteville common council who also refused to speculate about the possible future of the properties, commented on the unfavorable circumstances surrounding the properties.

“It is unfortunate that it had to get to this point,” Kilian said. “If (Kallembach) had (the properties) inspected and brought them up to code, they could be rental properties right now.”