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NEWS
Land bank top priority in 2009
Bobby Ellis of Car Construction operates an excavator to tear down a dilapidated house in the 800 block of West 9th Street Monday, June 16, 2008, in Huntington. Tearing down dilapidated housing quicker is one of the focuses of Huntington's home rule program.
Purchase this photoHUNTINGTON -- Mayor-elect Kim Wolfe says creating a land bank will be one of his first orders of business when his administration moves into City Hall on Jan. 1.
"I've always said it is a good idea because it puts the city on the fast track of acquiring abandoned homes and tearing them down," Wolfe said last week. "So is it a high priority? Absolutely."
Last year, city fire inspectors condemned 62 houses, found 111 that required major code improvements and identified 47 that had been damaged by fire. Dozens more have not been inspected yet or are a year or two more of neglect away from being classified as being in disrepair.
A land bank is one of the key components of Huntington's home-rule plan. A state panel in May chose Huntington and three other cities -- Charleston, Wheeling and Bridgeport -- to participate in a five-year, home-rule pilot program.
Currently, state law limits local governments on taxation, administrative and personnel issues. Home rule creates autonomy on the local level and restricts state interference.
In addition to a land bank, Huntington was authorized to implement a 1 percent occupation tax, change state law to capture fire insurance claim proceeds under certain circumstances and strengthen ordinances to collect delinquent fees. Thus far, the fire insurance ordinance is the only home-rule proposal that has been introduced and passed by City Council.
The land bank ordinance should be ready for City Council's consideration within a month of Wolfe taking office, said Charles Holley, the city's director of development and planning, and Tom Bell, Wolfe's chief tax deputy at the Cabell County Sheriff's Department. Bell is expected to be a member of Wolfe's administration, but his role has not been defined yet.
Holley and Bell have been working together on the land bank model for more than a year after realizing the detrimental impact that the county's annual tax lien sale has on the city's housing stock.
Every year in early November, property tax liens are sold at the Cabell County Courthouse if the taxes on the property are delinquent for the previous year.
If a lien is purchased at a tax sale, the original property owner has 18 months to pay the delinquent taxes plus 1 percent interest per month if they want to redeem their property. That money, including the interest, is then given to the lien holder.
If the original property owner, however, fails to pay the taxes within 18 months, the lien holder has the option of taking title of the property or forfeiting his or her bid and returning the property to the original property owner. The interest earned after purchasing a lien attracts out-of-state real estate investors looking to make a quick profit, Bell said. In the meantime, the property continues to decay.
Other than a few issues, the land bank proposal is set, Holley said. He and Bell used a similar land bank program in Flint, Mich., as a model, but have tailored Huntington's program to address local problems.
Under the proposal, the city would be allowed to purchase all of the tax liens within city limits at the county's annual tax sale. Rather than an out-of-state real estate investor collecting interest on the property, that money would go to the city. The city would use the interest money to board up the property, cut the grass or demolish the property if it is on the city's unsafe buildings list.
"That's the immediate impact of the program," Holley said. "Once we buy the tax lien at the sale, we will infuse resources to clean up the property and make it look as respectable as possible."
The city then would place a lien on the property for the costs it incurred to clean it up, Bell said. The county would not allow the owner to redeem the property until the taxes and the city's lien are paid.
"This is a key element in my mind and an issue that we're still working on," Bell said. "The city can't afford to spend a bunch of money on the property and not collect until years later. The liens have to have the same stature as the property taxes."
If the owner chose not to redeem the property at the end of the 18-month period, the city would turn it over to the land bank authority, Holley said. Rather than creating another city board, the Huntington Urban Renewal Authority could potentially serve as the land bank authority, he said. It has eminent domain powers and experience with neighborhood redevelopment projects on Artisan Avenue, he said.
"The land bank is the long-term impact in this equation," Holley said. "We could do a number of things with the property at that point. If the land bank receives a vacant lot, we could offer it to the homeowner next door for a minimal fee. We could give property to a developer if they agree to build a new home on it. We also could assemble lots over time that would become valuable for commercial development."
The process would benefit everyone involved, Holley said. The city would have the ability to take possession of dilapidated property. The county would sell all of its tax liens in the city. And residents would benefit through the removal of an eyesore in their neighborhood.
One hurdle that remains is securing a loan for the initial purchase of tax liens next year, Holley said. The land bank program would eventually become self-sufficient through the interest earned from the tax liens and the sale of property, he said.
The only drawback to the proposal is the two-and-a-half years it would take for the first pieces of dilapidated property to fall under control of the land bank authority. The next tax lien sale is a year away. And property owners would have 18 months after the sale to redeem their property from the city, just as they do now with the county.
Bell said the Legislature should shorten the time period given to property owners to pay their taxes, but Wolfe's administration will not be lobbying for the change anytime soon.
"That's a battle that would require a major effort and significant changes to state law. It's just not worth fighting at this time," Bell said. "I've talked to state officials about our current proposal. They believe it's workable, but going any further could cause a whole slew of problems."
