County Land Utilization Corporations, aka Land Banks Ildi Pallos Piqua, Ohio October 20, 2015.
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Transcript of County Land Utilization Corporations, aka Land Banks Ildi Pallos Piqua, Ohio October 20, 2015.
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County Land Utilization Corporations, aka Land Banks
Ildi PallosPiqua, Ohio
October 20, 2015
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What is a Land Bank?
• Land banks are community improvement corporations created specifically to acquire, manage, maintain, and repurpose vacant, abandoned, and foreclosed properties.
• Created to provide alternative to local governments selling their interest in tax-delinquent property to speculators, often for pennies on the dollar.
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Changes to Statute
• July 7, 2010 – Ohio’s 43 most populous counties (60,000 or more residents) received statutory authority to organize county land banks.
• June 30, 2015 – Legislation amended to allow all counties to create land banks!
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Formation – ORC Chapter 1724• One of two types of community improvement
corporations (CICs) that may be organized under ORC 1724.01(A)(1)
– Economic development corporations–County land reutilization corporations
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Tax Status
• Land banks can file for an Internal Revenue Code (IRC) Section 501(c)(3) tax status, but IRC Section 115 is preferable.
• IRC Section 115 organizations are commonly referred to as “instrumentalities of government” and do not have to file federal tax returns as do “C-3” organizations.
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Purpose - ORC Chapter 5722• Facilitate the reuse of vacant, abandoned, and tax‐
foreclosed real property• Efficiently hold and manage vacant, abandoned, or
tax foreclosed real property pending its reutilization
• Assist entities to clear the title of property and assist with coordinating and assembling properties
• Promote economic and housing development in the county or region
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How to Form a Land Bank
• Board of county commissioners passes a resolution authorizing the formation of a land bank.
• County treasurer files articles of incorporation with the Ohio Secretary of State.
• After incorporation, county commissioners approve the corporation's operating documents.
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Board of Directors ORC 1724.03(B)
• Five, seven, or nine members• County treasurer• At least two county commissioners• Representative from county’s largest
municipal corporation
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Board of Directors (cont.)• Representative from township with population
of at least 10,000, if at least two such townships exist in the county
• Any remaining members selected by the treasurer and the board member county commissioners
• At least one board member shall have private sector or nonprofit experience in rehabilitation or real estate acquisitions.
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How Land Banks Acquire Properties
• Tax foreclosure process – allows for direct transfer of property to a county land bank if the impositions, including taxes, penalties, special assessments and costs, are greater than the value of the property.
• Property forfeited to the state – written request to the county auditor and paying for the cost of an “auditor’s deed” for the property.
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Acquiring Properties (cont.)• Transfer of property from private
individuals and probate estates when owner no longer desires the burden of owning worthless property – must be approved by county auditor.
• Fannie Mae and HUD- may provide demolition funds.
• Donation of non-delinquent properties.
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Ideal Properties
• Already vacant (i.e., no building)– no demolition costs – Less environmental assessment costs– No building maintenance costs
• Tax foreclosure – no liens• Demolition costs included• End user in place
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Uses for Properties
• Transfer the properties to adjoining property owners – aka “side-lot programs.”
• Transfer the property to private sector for productive reuse – land bank is able to hold on to properties and transfer in bulk for redevelopment.
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Uses for Properties (cont.)
• Convert property to public uses such as parks, playgrounds, urban agriculture or community gardening and beautification projects.
• Transfer the property to non-profits, like community development corporations (CDCs), which may be assembling land for new development and/or maintain the property for community beautification goals
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Primary Funding Source
• 5% of the biannual delinquent property tax receipts, aka “DTAC” (Delinquent Tax and Assessment Collection)
• County Commissioners may vote to allocate up to 5% of all DTAC receipts to the county land bank for unrestricted use.
• Ohio is only state to provide consistent funding to land banks.
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Greater Ohio Policy Center “Taking Stock of Ohio County Land Banks: Current Practices and Promising Strategies” (May, 2015), page 10
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Government Funding
• Township trustees can contribute general fund monies and other services to a land bank to defray administrative expenses.
• Land bank can contract with the county commissioners, county auditor, or county treasurer to provide staff instead of, or in addition to, land bank staff.
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Other funding
• Loans• Land Sales• Charge fees and costs when disposing of
property• Grant applications• Foundation funding
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Resources• Alexander, Frank S. “Land Banks and Land
Banking, 2nd Ed.” (2015)http://action.communityprogress.net/p/salsa/web/common/public/signup?signup_page_KEY=8679• County Commissioners Association of Ohio
“Handbook Ohio County Commissioners – Chapter 81” (July, 2015)
http://www.ccao.org/userfiles/HBKCHAP081%207-16-15.pdf
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Resources (cont.)• Fitzpatrick, Thomas J. IV “Understanding
Ohio’s Land Bank Legislation” (2009)http://www.ohioenvironmentallawblog.com/uploads/file/Policy%20Analysis%20of%20new%20land%20bank%20law.pdf• Greater Ohio Policy Center “Taking Stock of
Ohio County Land Banks: Current Practices and Promising Strategies” (May, 2015)
http://greaterohio.org/files/policy-research/greaterohiolandbankreport5-15-15.pdf
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Western Reserve Land Conservancy-Land Bank Playbookhttp://www.wrlandconservancy.org/county-land-banks/playbook_home