Mark and Donna LeClair’s yard just got a little smaller.

The LeClairs were one of nine homeowners on Chestnut Street who recently received a letter from the city informing them that land they had been paying taxes on for nearly a decade wasn’t actually theirs.

The letter from the city came about as the result of a tight housing market, a law passed by the Legislature nearly 20 years ago and a mistake the city made in the way it applied the law 10 years later. The LeClairs’ land abuts what is known as a “paper street” – a street approved by the city but never built.

City Administrator Jerre Bryant said he expects the question of how to deal with the city’s paper streets to be on an upcoming City Council agenda. He said the administration would recommend that the city grant tax abatements to affected landowners.

Bryant said he wasn’t sure yet exactly how much it would cost the city to refund back tax payments to all affected residents. But he estimated it might cost between $8,000 and $10,000.

“In most cases, these are fairly nominal amounts,” Bryant said. “It will get resolved.”

While the city has said the issue of back taxes will eventually get resolved, LeClair is still upset over the fact that he has been paying taxes for eight years on land he never actually owned.

What’s more, LeClair said he and his wife are now faced with the prospect of a housing development going up in their backyard where previously there were just trees that had been standing there for years.

LeClair said a Yarmouth-based developer has gained the right to use a paper street near his house, clearing the way for the housing development and taking the land away from the landowners who have been paying taxes on that land for years.

A paper street is a street that has been previously approved, but exists only on paper. Bryant said the paper street near Chestnut Street exists as part of an approved subdivision that had been laid out and approved, but was never actually built.

Subdivisions and paper streets can stay undeveloped for a number of years, and since they were already approved, they are grandfathered against having to comply with current zoning regulations.

Bryant said in 1987, the state Legislature passed a law that gave towns and cities 10 years to either accept the paper street or vacate its rights to that street. The Legislature also gave the cities and towns the option of asking for a 10-year extension until 2007 before having to make a decision on the paper streets.

In 1997, Bryant said the city vacated many of the paper streets by choosing to take no action and declining to ask for the 10-year extension, and, according to state law, the public right of way defaulted to the abutting owners.

Bryant said the city has discovered that while it was within its rights to cede the city’s interest in the paper street, the actual underlying land was not owned by the city, and in some cases, the city should not have deeded the land to the abutting landowners. “By law, the public interest splits down the middle and reverts to the landowners,” Bryant said. “That doesn’t mean ownership of the land does. It can become a fairly complicated legal issue.”

The city is currently in the process of researching the issue and working to correct it, according to Bryant. He said he was not sure how many paper streets there were in the city, but he estimated the number at somewhere between 40 and 60 streets.

LeClair said he recently received a letter from the city telling him he no longer had the rights to the small area of land that had been previously set aside for a paper street. Shortly after receiving that letter, LeClair said he heard from Yarmouth developer Andre Bellucci that Bellucci was planning to use the paper streets for a residential development being constructed on land behind Chestnut Street.

Since he has already begun clearing the way for the road, Bryant said it is evident that Bellucci has already secured ownership of the land or in the very least has a right-of-way to construct a road there.

Bellucci did not return a call seeking comment for this story by press time.

The land for the street has already been cleared, LeClair said. While construction on housing units has not yet begun, LeClair said it was his understanding that current plans call for at least 10 houses to be built during initial construction.

Bryant said development projects like the one on Chestnut Street are the result of a tight market for developable land in the area. As land becomes scarce, developers are looking for any lots that can be developed. He said developers will purchase lots of land that are part of a previously approved subdivision, even if those lots do not have direct access from a current street. “As the housing market gets tighter that’s potentially quite a bit of value,” Bryant said.

Once they have secured the land, Bryant said developers can do a title search on the property, find out who actually owns the land set aside for the paper street and either purchase that land outright or secure a right-of-way to construct a road to access their lots.

Bryant said Bellucci has been one of the more active developers looking into older subdivisions and paper streets recently, but he said he has heard from members of the city’s planning staff that there have been other developers doing similar research as well.

LeClair said he is disappointed with how the city has handled the matter. While he has not been using the land for anything but extra yard space, he has been paying taxes on an extra 25 feet of land that was transferred to him by the city when it vacated its rights to the paper streets. Now that he is being told the land is not his, even though he has been paying taxes on it, LeClair is upset.

Since he feels the city erred in charging him taxes on the land, LeClair said he is hoping the city will rectify the matter by refunding the tax money he has been paying over the years. “It doesn’t amount to a whole lot of money,” he said. “But it’s just the principle.”

Bryant said from now on, the landowners would not be taxed for that additional land. As for the back taxes residents have been paying on the land, Bryant said the administration is in the process of identifying the amount of tax money that needs to be refunded. He did not have an exact amount yet, but he said he didn’t believe it was a significant amount of money.

Chestnut Street residents are concerned over the recent clearing of land to construct roads leading to a future housing development.Chestnut Street residents are concerned over the recent clearing of land to construct roads leading to a future housing development.

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