Miell’s property empire going mostly to banks

The liquidation of high-profile landlord Bob Miell's property empire is winding down, even as Miell's court fight over the liquidation continues.

Miell owned 461 rental properties, ranging from apartment buildings to small homes, before he was prosecuted for mail fraud and perjury. He had hoped to reorganize his rental property business to pay off creditors under the protection of bankruptcy laws.

The game plan changed in October when a judge ordered his business interests liquidated at the urging of banks and the U.S. bankruptcy trustee. Six months later, all but 110 properties have a new owner, said Cedar Rapids lawyer Renee Hanrahan, the bankruptcy case trustee.

Few were sold to renters. Dozens were sold to real estate investors. The vast majority have been or are being sold to lenders who financed Miell's purchases of the properties.

Bank Iowa of New Hampton, owed $2.7 million by Miell, gained court approval in February to buy 36 of the properties it financed. Bank Vice President Roger Hansen declined to comment on the bank's plans, citing lender privacy rules.

Heritage Bank of Marion gained court approval March 17 to buy 65 of the properties.

This week, Guaranty Bank & Trust of Cedar Rapids got the go-ahead to buy 33 of the properties.

Hanrahan said she expects to get approval to sell other properties to the banks who financed their purchases in the weeks ahead.

Miell, 55, is in jail awaiting sentencing on mail fraud and perjury charges involving failure to return renters' deposits and fraudulently reporting more than $336,000 in storm damage on 145 properties to American Family Insurance. He is seeking to withdraw his guilty pleas in the criminal case. In the bankruptcy case, he has motions pending to contest the liquidation of his rental business and remove Hanrahan as trustee, among others.

Hanrahan said she believes the future will be brighter for most of the properties. Miell tended to buy properties in good neighborhoods with little rental housing. That made them more desirable for buyers.

The homes and apartments were largely not “market-ready,” however. Many needed repairs, although generally not for problems that threatened the occupants' health and safety.

“The description we've often heard of them is ‘rough,' ” Hanrahan said.

Fifty-five of the Miell properties are listed for sale with three local Realtors. The trustee has obtained court approval to sell 12 of them and is awaiting court approval on the sale of another nine.

Because of the large number of properties, Hanrahan said, she was concerned that dumping them all on the market could cause home prices to fall in the Cedar Rapids area and cause a shortage of rentals as more homes became owner-occupied.

Some of Miell's creditors have objected to sales of homes at prices that were below the appraised or even assessed value of the properties.

Hanrahan said some sales have been for less than appraised value, but not for lack of trying to get the best price. She has had more than 200 contacts with interested buyers, according to court records, and is dealing with 33 lenders.

“It's not that we've glutted the market,” Hanrahan said. “It's more the condition of the market and the condition of the properties.”