The county land bank got outbid at a sheriff's sale last week in the first fully contested battle between a “slumlord” — who doesn't pay taxes while evicting hundreds of tenants — and the public officials trying to hold him accountable.

In the first of 55 foreclosure cases headed to public auction this year, Gary L. Thomas opened with a minimum bid of $16,759.70. That's how much he owes in unpaid property taxes, court costs, legal fees and civil penalties on Game 7 Bar and Grille at 627 S Arlington St.

The South Akron nightclub made headlines in 2017 with two deadly shootings and an assault on police officers during a bar brawl, all on separate occasions.

With several limited liability companies at his disposal, Thomas used TXS Properties Services LLC to buy the old bar for $130,000 in 2014. He transferred the property at no cost to 627 S Arlington St LLC months later. Last week, he used XE Properties LLC to bid on keeping it.

It's unclear whether Thomas even owns the property. Court documents indicate that proceeds from the property, including rent, are “for the benefit of” the personal retirement account of Maria Bush, a private investor who could not be reached for comment through an attorney also representing Thomas.

In a separate and even lengthier lawsuit, city prosecutors convinced a judge this spring to padlock the troubled bar for a year. Thomas is appealing that decision, and the bar's multiple operators have applied with the state to renew their liquor permits, which the city is also fighting.

At the sheriff's sale last week, only one other bidder showed: Patrick Bravo, executive director of the Summit County Land Bank, which works with the county, city and private property owners to acquire problem properties.

In increments of $1,000, Thomas prevailed with a final $57,000 offer. Despite his companies and family owing nearly $950,000 in delinquent taxes, there's no state law barring him from participating in a sheriff's sale.

After the victory, Thomas paid his $1,000 deposit then offered Bravo the property — appraised at less than $60,000 — for $80,000. “I said, ‘well, I don't know if I can go that high.' At that point, we introduced ourselves,” said Bravo, who as the head of the land bank has worked closely with the Fiscal Office this past year to push 69 of Thomas' properties covering 73 parcels into foreclosure, including the bar.

“The conversation didn't go on much longer after that,” Bravo said.

In Akron's poorest neighborhoods, Thomas has perfected a business model that sustains profits despite bad credit and foreclosures.

Many of his properties are now vacant lots. The houses that stood on them, some of which he purchased out of foreclosure from banks, were rented for years as taxes went unpaid and low-income tenants interviewed by the Beacon Journal complained of repairs not being made. The city has used taxpayer funds to demolish many of them.

Targeted foreclosures

In October, 48 more of Thomas' properties are scheduled to go to sheriff's sale. If no one bids, the land bank will assume ownership through an expedited process. If someone buys them, the minimum bid will at least recoup the unpaid taxes.

The glut of tax foreclosures filed by Summit County Assistant Prosecutor Pete Nischt on behalf of the land bank and Fiscal Office is an unprecedented model for collecting public dues from some of Akron's savviest tax-delinquent landlords — starting with Thomas. While the litigious landlord lives in a $340,000 Wadsworth home, in Akron, Fiscal Officer Kristen Scalise and others call him a “slumlord.”

The joint tax foreclosure sting has forced Thomas to forfeit seven vacant or blighted properties with barely any value after accounting for the back taxes. He's contested other properties, which are headed to sheriff's sale instead.

Facing numerous foreclosures this past year, about $13,000 in back taxes have been paid on five properties owned by Thomas — who once told a reporter that “it's not illegal to not pay your taxes.” Two more have been redeemed after being sold to PR 31 LLC, which is controlled by his son, and another buyer.

The bar is the first property to be contested all the way through the grueling legal process. Thomas missed the Wednesday deadline to pay the remaining $56,000 balance. With an annual 10 percent late fee compounding daily, he has until Sept. 6 to pay the rest or forfeit the commercial property.

“We have to see if this is a stall tactic, or if he really is going to pay,” Scalise said.

Lessons to learn

County auditors across Ohio are closely watching Summit County's collaborative experiment in tax enforcement, which targets a single actor who uses shell companies to insulate some of his properties from the troubles of others.

“I am not aware that this type of situation has happened in any other county,” said Fran Lesser, head of the Ohio County Auditors' Association. “I am going to make a big assumption that it's not happening anywhere else in the country.”

The outcome of the special task force could rewrite how public tax collectors and quasi-public agencies like land banks work together in urban settings with lots of rentals to put pressure on negligent landlords.

As county officials start tallying more of Thomas' properties now falling into delinquency, how he reacts to the current enforcement proceedings could strengthen the process when applied elsewhere or in the future.

The case already has caught the attention of state Rep. Emilia Sykes of Akron, a former staffer in the Summit County Fiscal Office who worked for Community Legal Services helping tenants in Akron and also clerked for a U.S. Bankruptcy Court in Georgia. Scalise asked Sykes to look into loopholes in state law that allow tax-delinquent property owners like Thomas to participate in public auctions, transfer property deeds and use shell companies to shuffle real estate, which Thomas admitted is done to isolate his troubles from spreading like disease to all of his assets.

With age-old state laws favoring property owners, Sykes has reached out to other auditors, fiscal offices and legislative researchers at the Statehouse to gather information on “a really challenging issue.”

Eviction notice

Thomas hasn't spoken with the Beacon Journal since a reporter caught up with him at an eviction hearing in September — one of the few he's lost since the county started targeting his business. A man who answered his cellphone this week would not give his name but said, “I'll be sure to have [Thomas] call you.”

Attorney Tyler Whitney, who represents Thomas in several foreclosure and eviction cases, said his client is best-suited to answer a reporter's questions.

As a single landlord who shuffles properties through at least 25 entities, Thomas is one of the most tax-delinquent real estate owners in Summit County. According to Fiscal Office records, which will be updated soon to reflect another six months of tax bills, there are 12,629 properties with a collective tax delinquency of $118.3 million. Thomas is connected to at least 91 of them totaling $947,128 in back taxes that would otherwise support schools, libraries and a range of public services.

Aside from his regular appearances at the county courthouse, Thomas and his companies have filed at least 472 municipal court cases since 1996, almost always to evict his tenants. Many of the cases are filed on the same day by different companies using Thomas' signature post office box.

Since last summer when the fiscal office and land bank teamed up on this case, Thomas has evicted or tried to evict 16 of his tenants.

Bravo tried to soften the blow for tenants caught in the middle by hosting clinics that explain to tenants their rights, and a chance to become owners of the troubled properties if they could survive eviction hearings and reports of poor living conditions.

But Thomas, who sometimes speaks for his legal counsel in court, has also used tenants to his advantage. Earlier this year, he moved a tenant into the shuttered bar at 627 S. Arlington St.

Once occupied, the property could not be possessed by the county. Like 48 others headed to sheriff's sale this year, Thomas now will have to sell them or buy them back from the brink of foreclosure — forced to pay his back taxes in the process.

Reach Doug Livingston at 330-996-3792 or dlivingston@thebeaconjournal.com. Follow him @ABJDoug on Twitter or www.facebook.com/doug.livingston.92 on Facebook.