The Union Recorder

May 24, 2013

Land bank could address local blight

Kyle Collins
The Union-Recorder

MILLEDGEVILLE —

 

The altered “Georgia Land Bank Act”, passed by the 2012 General Assembly as Senate Bill 284, still offers local governments a mechanism to return dilapidated, abandoned and tax delinquent properties to productive use.

During Tuesday's Baldwin County Commissioners work session, Commissioner Henry Craig, District 4, presented background information describing how the county could deal with countless blighted properties as part of a master plan.

“I think things like how we use our properties, how they look and litter are all connected to our future as a community,” Craig said. “One of the things that we can do to take charge is consider a land bank.”

• Land Bank requires joint effort

Currently, the county holds over 50 “knocked off” regular foreclosure or judicial tax sale properties, many of which are steadily deteriorating. These kinds of properties impose significant costs including lowering property values, increasing public safety protection costs and decreasing tax revenues, according to the Association County Commissioners of Georgia (ACCG) SB 284 summary.

Craig said the land bank concept avoids devastating effects of carelessly selling property with no idea of the future owner's plans. 

“It's an alternative to how we've done business forever. By creating a land bank system, the communities can participate in what happens to their neighborhood,” the commissioner said Tuesday.

City and county government interests go hand in hand for land bank authority creation.

The statute says counties may not create a land bank without at least one participating city within the geographical boundaries of the county and vice versa. Other adjacent governments could join as well.

A local law, ordinance or resolution must pass to create the bank authority.

The resolution would specify various items such as the initial land bank board members. The intro size features an odd number between 5 and 11.

City or county employees may join the board.

Milledgeville City Planner Melba Hilson said the city is on board with the land bank idea.

“It's a wonderful idea for the city and the county to do things together,” Craig said.

• Land Bank powers and financing

A land bank entity has the power to sue, contract and borrow money for the work of the land bank. The bill also lets the board acquire, develop, demolish, rehabilitate, lease, sell or otherwise dispose of real property, according to the ACCG summary.

Once a land bank gains property control, the entity may extinguish tax liens. Any proceeds from land bank property sales go toward operations and to recover expenses. This authority may also be funded through government or private grants.

County attorney David McRee highlighted the statute's subsection allowing up to 75 percent of property taxes to go back into the bank instead of local government for a five-year period after conveyance.

“That's one of the ways they acquire funding to support their needs,” McRee said. “It's a trade off to get it back into productive hands.”

Senior counsel in the Atlanta office of Seyfarth Shaw LLP Kevin Brown, who specializes in commercial litigation and business transactions, hasn't seen a land bank created under the 2012 version of the statute. Senate Bill 284 revised the 1990 version by excluding land bank authorities from taking properties under forfeiture.

That restriction and the thought of elected officials giving up some property tax control can be a local government deterrent, according to Brown.

Commissioner Sammy Hall, District 3, doesn't mind those taxes going elsewhere for a better cause.

“That's probably not a great loss to the county because some of those properties are probably only paying $50 in property taxes. I think it's a good idea,” Hall said.

• MBC Development Authority can work the bank

Commissioners favor the land bank concept, though some don't see creating another authority as the right way. 

Milledgeville-Baldwin County Development Authority executive director Matt Poyner said that group is already setup to be the property conduit.

The DA executive board uses four city, four county and one joint member, which answers the odd number land bank act item.

“We maintain, acquire and manage land,” Poyner said. “If you want to put this together that's great, but I think you've already got a mechanism in the development authority that can do all this. That's available right now.”

Brown said this using the already established board to act as a land bank happens often.

“If there is some specific reason that you want to have one, you've already got a board from your development authority. Just appoint the same board. That happens all the time,” Brown said.

Tommy French, District 2 commissioner, said placing the described property management duties with a trained development authority makes more sense than specifying another group.

“Development authority already has a board in place,” French said. “To save money, we need to utilize resources we have.”

Brown concurred on the price point of using the existing joint city and county authority versus a new group.

“It's expensive to form a new authority,” he said. “It's become less attractive to create a new authority if you've got one there simply because the regulations surrounding new authorities cost money.” 

Creating a Milledgeville-Baldwin County land bank through the current development authority executive board does what a land bank can't do alone.

“Milledgeville and Baldwin County are lucky they have a constitutional development authority. You can't create those anymore after the 1983 change in the Georgia Constitution. It has all the powers a land bank would have and then some,” Brown said. “There is one thing that a land bank authority can't do. It can't transact business with a private entity. The development authority can do it for public and private purposes.” 

• Not all properties land bank suited 

Craig said the land bank would collect more than just blighted properties. The law lets the authority strictly consider which properties go in and who could gain conveyance. 

The ACCG summary states, “land banks may establish hierarchical rankings for the disposition of land bank property for uses such as public space, affordable housing, retail or commercial activities, conservation areas or land trusts.”

“If you have no plan for the property, it should not go into the land bank,” Craig said.

Brown said typically a land bank authority works best dealing with a certain project-oriented goal in a target area working for public functions. 

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