Tenants of Nassau County-owned buildings owe more than $6 million in overdue rent while vacant county properties valued at nearly $7 million have sat idle for years with little effort to sell them, according to a new audit.
County Comptroller George Maragos found that the Office of Real Estate Services is hampered by inadequate billing and collection practices, poor record keeping and a lack of qualified employees to manage its $1.3 billion portfolio of county-owned properties.
"It is unfortunate that the county's large real estate portfolio has been inadequately managed with uncollected rents and lost revenue opportunities exceeding $12.9 million," Maragos said. "However, it now represents a huge opportunity, if managed effectively, to obtain new revenues and increase the county tax base by selling surplus properties."
Brian Nevin, a spokesman for Nassau County Executive Edward Mangano, said the administration is reviewing the audit, which covered the period from the start of 2011 through May 2013.
The county has also issued a request for proposals for a private consultant to help manage the county's real estate portfolio.
The audit, released Thursday, comes as Nassau faces a projected deficit of $76 million this year, according to Maragos. More than $100 million in Mangano's 2015 budget is at risk and may not materialize, Maragos said.
Maragos found that five tenants or county concessions owe Nassau a combined $6.39 million in back rent. Among them is Spectator Management Group, the Pennsylvania-based company that runs Nassau Coliseum, which owes $5.5 million in maintenance costs.
Maragos said SMG has been subleasing the Coliseum parking lot to three auto dealerships who pay the company to store up to 200 vehicles on the property.
Auditors also found that six vacant county-owned properties, valued at a total of $6.9 million, should be sold but that regular inspections of the sites were not being performed.
The properties could generate another $295,000 in annual property tax revenue, the audit said.
One property valued at $3 million is a Superfund site requiring extensive environmental cleanup, Nevin said. The county is working to sell and redevelop another property, he said.
The county sold $9.8 million in properties in 2011 and $11.6 million in 2012. But sales dropped to $3 million last year, Maragos said, largely because the real estate office had a staff of only four employees, and no real estate attorneys.
Suffolk County has 14 employees focused on property management, according to Maragos.
As of May 2013, Nassau owned or leased 2,271 properties, including 303 run by the Parks Department, 193 buildings run by the Police Department and 60 homes leased to military veterans.