Economic Development, Government, and Real Estate

Grand Rapids reviving policy on tax-foreclosed properties

The new version is expected to bring county land bank into the picture.

May 24, 2013
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The city of Grand Rapids is rewriting its policy of how to handle tax-foreclosed properties, which are usually residences.

The current policy allows city commissioners to transfer these homes to nonprofit developers like LINC Community Revitalization and the Inner City Christian Federation. The new policy is expected to make these properties transferable to the Kent County Land Bank Authority, and before the County Treasurer holds the annual auction of tax-foreclosed parcels this summer.

“We definitely are working on it. We have a long history of taking properties pre-auction,” said City Commissioner Rosalynn Bliss, also a KCLBA board member.

“We would decide what properties and which nonprofits to work with,” said Bliss of the commission’s past actions under the current policy.

The policy change is being considered by the city because Kent County commissioners followed up on a recommendation from a county subcommittee and decided not to sell tax-foreclosed properties to the land bank this year after selling 44 to the agency for $420,000 last July.

Last year’s sale riled some local realtors who claimed it was unfair to the private sector and they filed a lawsuit that was dismissed by a Kent County Circuit Court judge for lack of standing in December. The decision has been appealed by the plaintiffs.

The latest county decision has forced the land bank to rely on cities and townships to gain access to parcels before the annual sale. The city’s potential policy change is important to the land bank’s future because Grand Rapids traditionally has the highest number of tax-foreclosed properties with it being the most populated city in the county.

City commissioners are expected to review the new policy June 18. The annual auction is set for Aug. 21 at DeVos Place beginning at noon.

According to state law, governmental units must have a “public purpose” to transfer properties to a land bank. A 2011 appellate court decision in Michigan ruled it is a local unit and not a land bank that defines what constitutes a public purpose.

KCLBA Executive Director Dave Allen said he has been in touch with a number of cities and townships to let officials know what the agency can do for their tax-foreclosed properties.

“I want to make it clear: We are not asking anyone to give properties to the land bank. We are providing them with information on what we can do,” said KCLBA Chairman Ken Parrish, also county treasurer.

Allen said at least three townships have told him they are interested in working with the land bank. He said Kentwood officials said they favored the direction the county has taken by leaving the decision up to local units. Allen said he has two more meetings scheduled with Kentwood city officials.

Allen also said Wyoming city officials told him they have decided not to work with the land bank this year. But he added they will keep an eye on what happens this year and possibly reconsider their involvement with the agency a year from now. Allen said he will give Wyoming a report on what happens this year.

“We have some very unique opportunities to show the public what we can do,” said County Commissioner Stan Ponstein, also a KCLBA board member. “At the end of the day, I think the public’s support will outweigh any criticism.”

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