County banking on demo dollars

LISBON – Columbiana County commissioners are considering creating a county land bank as a way to access federal funding to continue demolishing abandoned and dilapidated homes.

Commissioners hosted an informational meeting recently for about 20 representatives from local cities, villages and county agencies to explain the plan and take questions. The meeting featured presentations by representatives from two organizations involved in the land bank movement.

The land bank was created by state law in 2009 as a mechanism for counties to quickly acquire dilapidated and abandoned properties that are being foreclosed against because of delinquent real estate taxes. Property taxes would be waived for those properties added to the land bank.

The idea is to not only eliminate dilapidated properties that have become public nuisances, but to clean them up so the land can be redeveloped for residential or commercial purposes.

“This is just another tool in the tool box to help communities” address the problem of vacant and abandoned homes created by the foreclosure crisis of the late 2000s, said Commissioner Mike Halleck.

Commissioners would need to create the Land Reutilization Corp. (LRC) board, a non-profit agency to oversee the land bank program. The LRC board consists of five to nine members, with the exact size determined by commissioners, although there are four permanent members to start – two commissioners, the county treasurer and a representative from the county’s largest city, which is Salem.

Cities, villages and townships would be asked to enter into a “memorandum of understanding,” which is a cooperative agreement establishing the framework enabling property within a particular community to be acquired for the land bank.

Tad Herold, county development director, said participation is voluntary.

“I don’t see that being a big problem with cities and villages, but no one will be forced to participate,” although only the county can create a land bank, he said.

The whole point of the program is to work with communities in eliminating abandoned homes and other properties that have become eyesores and public nuisances, Herold said. Once the structures are razed and cleaned up, officials would work to market the properties for redevelopment.

Herold emphasized the idea is to target problem homes or areas and not acquire every single property that has a delinquent property lien against it. “We don’t want to get into the real estate business,” he said.

Regardless of whether they participate, communities and school districts may eventually be asked to help pay for the program in the form of decreased delinquent property tax collections. The land bank law allows commissioners to take up to 5 percent of delinquent property tax collections for the program, which is in addition to the 5 percent already taken off the top to pay the county treasurer and prosecutor for pursuing tax delinquencies.

The majority of property taxes – about 70 percent – go to school districts, but also receiving taxes are cities, villages, townships, fire districts, county agencies and some public libraries. These 60 political subdivisions received a combined $3.84 million in delinquent property taxes last year .

Obviously, the figures fluctuates with the amount of delinquent taxes collected in any given year, but Herold said a 5 percent land-bank fee would have generated a combined $192,299 for the program based on 2013 figures. If 2 percent of delinquent taxes was collected last year, the figure would have been $76,919.

“They can enact that on their own,” he said of commissioners, “and I’m sure they don’t want to do that without the support of communities.”

Halleck said they may proceed with creating the land bank and delay acting on the tax collection fee issue until later. “Depending on the feelings of the board, the county might be in a position to pay for the first year ourselves,” he said, adding this would include hiring a land bank consultant to assist with setting up the program.

Commissioners want to act soon to get in on the next round of federal housing demolition funding available to land banks through the Ohio Housing Finance Authority. During the last such distribution in late February, $49.5 million was awarded to land banks in 11 counties.

Approximately $10.5 million is available during the next funding round, and the application deadline is July 31, and Halleck expects they will act within the next month to create a land bank so the county can seek some of the money.

Commissioners are currently completing demolition of 72 abandoned and dilapidated homes under a program begun two years ago with $530,000 awarded the county through the Ohio Attorney General’s Office. Halleck said they want to build on those efforts but were never in a position to actively pursue other funding until hiring Herold last summer as the county’s first development director in more than a decade.