Government, Law, and Real Estate

County stops property sales to land bank

One Grand Rapids commissioner hopes city will work closely with county agency.

March 29, 2013
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Despite a circuit court ruling in the board’s favor, Kent County commissioners decided last week not to sell tax-foreclosed properties to the Kent County Land Bank Authority prior to the annual auction as they did last July.

The board’s decision was nearly unanimous. Only County Commissioner Jim Talen didn’t support a recommendation from the county’s Land Bank Process Subcommittee that called for the pre-auction sale to stop and for local municipalities to transfer foreclosed properties to the land bank.

“The end result of the resolution is we’re not allowing the county to give anything to the land bank. The municipalities can take all of it, if they want,” said County Commissioner Dick Vander Molen, who also served on the subcommittee.

“I think because of our efforts last year, I think the locals will get involved,” added County Commissioner Tom Antor, also a subcommittee member.

Last July, the commission sold 44 tax-foreclosed properties to the land bank for $422,000. The sale prompted a lawsuit from 11 realtors and property managers claiming it violated state law and county policy and stunted the free-market process because those properties weren’t part of the annual tax auction. However, a 17th circuit court judge dismissed the case for lack of standing, and the plaintiffs have appealed.

When the matter came up for a vote, Talen said he hadn’t seen the subcommittee’s report and didn’t have a copy of the resolution. County Commissioner Dick Bulkowski said the issue was being brought to the board hastily and wondered if the commission had to deal with it now. He also questioned the result of the decision.

“If the locals can take the properties today, why are we giving them a right they already have?” asked Bulkowski. State law allows cities, townships and villages to claim properties from the foreclosure list as long as a municipality has a public purpose for doing so. “We’re just taking the county totally out of it.”

Bulkowski and Talen asked if the county had received any complaints from the municipalities about the July sale.

“I know some individuals were disappointed, but were the municipalities?” asked Bulkowski.

“Nobody from the local units came to the land bank process subcommittee about the (sale) process,” said County Corporate Counsel Dan Ophoff.

Talen wondered what effect the sale ban would have on the land bank’s future. “Is this going to harm the long-term finances of the land bank?” he asked.

County Commissioner Michael Wawee, who chaired the subcommittee, said making that financial determination wasn’t part of the group’s assignment, which was to make a recommendation on whether the county should sell properties to the land bank before the auction.

Bulkowski said stopping the sale could end up destroying the land bank and could be an unintended consequence of such a decision.

Grand Rapids City Commissioner Rosalynn Bliss, also a KCLBA board member, said she wasn’t surprised by the county’s decision considering the opposition that emerged from the July sale. “To me, it just affirms the fact of what we have the ability to do under state statute,” she said.

Because of its size, Grand Rapids normally has the greatest number of properties on the tax-foreclosure list, and Bliss felt it was too soon to say whether the city will claim parcels and transfer those sites to the land bank for redevelopment. But she noted city commissioners were left with a positive feeling about the agency’s actions when KCLBA Executive Director Dave Allen spoke to the city board.

“I personally think the land bank is an excellent tool and I think we would be remiss if we didn’t use it as a tool for some of our neighborhoods. How will we end up using it? I don’t know at this point. There needs to be a larger conversation among my colleagues on the city commission. But if the only way we can use the land bank is to make that decision at the local level, I think we will have that discussion,” she said.

Bliss pointed out that the city has claimed properties on the list in past years before the land bank was operational and transferred those parcels to nonprofit developers for redevelopment. She also said the city and the land bank recently entered into an agreement which has the county agency monitoring the city’s foreclosed properties on the city’s behalf, so a relationship between Grand Rapids and the land bank already exists.

There are two possible outcomes from the county commission’s decision. One, the plaintiffs may drop their lawsuit now that the county won’t be selling properties to the land bank. But the county might want to go ahead with the legal proceeding to establish a precedent.

Two, the municipalities may claim more properties from the list this year than the county sold to the land bank last year, which will also deplete the inventory at the auction. Any local unit that removes parcels from the list has to have a public purpose and has to reimburse the County Treasurer’s office for all the back taxes because the office has already picked up those tabs.

“I think we’re getting back to what the statute intended: to have a public purpose. At the end of the day, there were lots of discussions and a good result,” said Wawee of the subcommittee’s work. “There will be a public purpose and there will be some rationality to (the process).”

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