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Questions raised about fairness of Atlantic City real estate auction

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The housing market is red hot, so if you’re considering buying a house at auction, here’s what you should know.

ATLANTIC CITY — City Council postponed acceptance of high bids from a Sept. 14 online real state auction after a bidder said at Wednesday night’s council meeting that he improperly lost out on a property after the bidding process should have closed.

“I was the last person to bid at 11 a.m., when it was supposed to end. I bid $130,000,” said Solomon Andemariane, who bid on a property at 822 Lexington Ave. “Seven minutes later someone bid $140,000 (and it was accepted). I think I should be awarded it for $130,000.”

Council President George Tibbitt then questioned whether the list of high bidders should be voted on since there was some question about fairness.

“We have to keep the integrity of our auctions,” Tibbitt said.

Bob Dann, an executive vice president with Max Spann Real Estate & Auction Company, said he had been contacted early Thursday by city officials and assured them there was no hard cutoff of bids at 11 a.m., and Andemariane knew that.

“The auction didn’t end until 11:20 a.m.,” Dann said. “He (Andemariane) bid after 11.”

Dann said Andemariane had called him as the bidding continued after 11 a.m., and he had told Andemariane it had not closed.

“He called my office and said, ‘When are you stopping the bidding?’” Dann said. “I said the auction was still going on, and said there was still time to place a bid, and he did not place another bid.”

“We are reviewing the matter now, but we are confident everything regarding the auction was done properly,” a city spokesperson said Thursday.

Advertising materials for the auction were a bit confusing on the issue of start and stop times.

In information on its website, Max Spann says:

“Online Auction Bidding: Opens Monday, September 12, 2022 9 am and Concludes Wednesday, September 14, 2022 Group A:11 am, Group B:12 pm.”

The property in question was in Group A, and the statement can be interpreted to mean the bidding closes at 11 a.m. for that group. But Dann said 11 a.m. was the official start of bids, with pre-bidding happening earlier.

Council decided to postpone the vote until its next meeting, which could be either a special meeting or the next scheduled meeting in October.

The auction raised almost $2.5 million for the city, said council Vice President Kaleem Shabazz, who warned against the city assuming the auction was not properly run.

“We have to be careful. I don’t think we should suggest there were multiple instances of things not in line with process,” Shabazz said. “That hurts us as a city.”

Business Administrator Anthony Swan suggested pulling out Andemariane’s bid from the list and approving the rest.

“We have no indication of anything else or complaints regarding the auction,” Swan said.

But Councilwoman LaToya Dunston suggested waiting on the entire list, which council ultimately supported.

“I think we should pull the entire thing to make sure the entire process was done properly,” Dunston said.

City Attorney Michael Perughini said council must accept the bids at the next council meeting to meet auction rules.

The auction of 47 city-owned properties assembled in 36 parcels was run by Max Spann, which has offices in New York, New Jersey and Florida and a long history of running auctions of city properties.

The Sept. 14 auction included an almost 4-acre site in an area zoned for use by a cannabis business, as well as waterfront and commercial lots and other development sites. Eleven homes in need of renovation were also included, as well as a waterfront residential lot with new bulkheads.

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