KITCHENER — The city's effort to collect more than $1 million in taxes owed by forcing the tax sale of a contaminated property has failed.

The tax sale of the former Electrohome property at 152 Shanley St. attracted just one bid for $200,000, well short of the minimum amount of $1,086,116.41.

Kitchener had received at least a half-dozen inquiries about the property over the past several months, said city solicitor Lesley MacDonald.

Tax sales are very tightly regulated under the Municipal Act, and a municipality isn't able to accept any bids that don't cover the costs of all taxes owed on the property, as well as the costs of running the tax sale.

The rules also stipulate that the city can hold the tax sale for only four weeks. Given the tight timelines, the city wanted to give prospective buyers as much time as possible to check out the property before the sale began, and prepared an information package about the property that was available well before the formal launch of the sale.

"Since there was no successful bidder, this is considered an unsuccessful tax sale," MacDonald said in an email. Given the failure of the sale, the city is reviewing its options for the site.

The city had put the property up for formal sale at the end of March, and bidding closed May 3.

The property is in a desirable location, in a residential neighbourhood close to the LRT and future transit hub, but any owner would have to contend with several problems, including a long-standing cleanup order from the Ministry of the Environment to address contamination from metals, petroleum hydrocarbons and volatile organic compounds, including trichloroethylene, an industrial degreaser.

Current zoning only permits a residential development of up to four storeys, and the building's listing on the city's inventory of heritage buildings would require the owner to carry out a heritage study before redeveloping the existing building, which is in poor shape.

The former furniture factory dates from 1887 and was later sold to Dominion Electrohome, which built hardwood television cabinets there for decades. The building is currently owned by a numbered company, 848835 Ontario Inc. It's one of only two properties that bylaw enforcement officials consider a chronic offender for consistently failing to mow grass or shovel sidewalks.