Land bank seen as a pound of cure
Although Kent County commissioners recently gave Kent County Treasurer Kenneth Parrish the green light to buy a dozen tax-foreclosed properties for the Kent County Land Bank, it wasn’t certain how many of those properties the bank would actually purchase following the commission’s decision.
“It’s highly doubtful that we will purchase all 12,” said Commissioner Stan Ponstein, a member of the land bank board, before the board determined how many would be bought.
“We will not be acquiring all 12. I can tell you that right now,” added Parrish.
Staying true to its predictions, the Kent County Land Bank Authority gave the OK for Parrish to buy six of the properties for about $43,500.
No matter how many were bought, the commission’s vote can be characterized as being somewhat historic because the purchase was the first for the land bank. Eleven of the original homes were on the south side of Grand Rapids. The 12th was in Tyrone Township. Five of those purchased were in Grand Rapids, while the sixth was on 17 Mile Road in the township.
All were vacant residences and all were available for delinquent taxes; the figures ranged from a low of $2,141 to a high of $12,996. The dozen would have cost the land bank $65,125. A grant from the Grand Rapids Community Foundation covered the purchase price.
Three commissioners voted against buying the properties. Commissioner Shana Shroll said she was nervous about making any purchases because the economy is very shaky and the housing market hasn’t recovered. In Grand Rapids, roughly 10 percent of the housing stock is vacant.
“How do we know we’re not going to see another housing crisis, and then we’ll be stuck with these homes?” she asked.
Parrish said the land bank would move cautiously because of the fragile economy. He added, however, that making purchases gives the land bank an opportunity to generate some revenue. Then he said the county’s government wouldn’t be responsible for properties in the bank.
“Kent County would not be on the hook. It would be on the land bank,” he said.
Parrish also joked that he has been around long enough to know that he can’t come to the commission for bailout money to keep the bank from going under.
Commissioner Bill Hirsch said he sees a lot of vacant buildings as he looks throughout the county. He also sees the land bank as a solution to that situation. “I look at the land bank as a pound of cure,” he said. “I know this is not an easy process, but something has to be done.”
Ponstein pointed out that the land bank gives the county a few advantages that it didn’t have before the bank became operational. For instance, he said a land bank can clear any title, which is something the private sector can’t do. He also said if a land bank buys a former gas station site, it can get some funds for a developer who wants to redevelop the property.
“There are some great possibilities for this,” said Ponstein. “Land banks can fund themselves.”
Parrish said the land bank isn’t competing with for-profit or nonprofit developers. He said many developers work in specific areas, while the land bank won’t, and there are some properties that aren’t financially feasible for a developer to develop. In addition, tax incentives are available for every land-bank property.
“I can tell you that nonprofit developers are glad we have a land bank,” said Parrish. “I do not see it competing with the private sector. I see it as a partner.”
Parrish said he took five developers and building experts with him on his inspection tour to obtain their appraisals on the condition of the properties. “It was amazing to me, as a novice, how quickly they could point things out,” he said. “In one case, we’re going to recommend demolition.”
Because all but one of the homes Parrish considered for the land bank was in Grand Rapids, he was asked what the city is doing to redevelop properties. Parrish said Grand Rapids uses funds from the U.S Department of Housing and Urban Development and works with nonprofit developers to renovate houses. But because the city gets HUD funds, he said Grand Rapids is limited to working in certain areas of the city due to the federal requirements that accompany the money. He said the county’s land bank can take a broader approach to the problem.
Parrish also said his priorities in choosing properties for the land bank are, in order: tax-foreclosed parcels, residential sites, vacant properties, and the bid amount, which amounts to the taxes due. He said some of the properties purchased will be offered for redevelopment, while others will go into a program that Habitat of Humanity is doing with the U.S. Department of Energy.
The properties the land bank didn’t buy will go into the annual auction held by his office. The first sale took place last week; two sales are normally held each year.
“I expect that I’ll be back with another list of properties,” Parrish told commissioners, “possibly in the next month or so.”