County wants more info on land bank practice

Land bank agrees to provide it and asks for more time.

October 20, 2012
Text Size:

At their next meeting, members of the Kent County Land Bank Process Subcommittee will hear from Kent County Land Bank Authority Executive Director Dave Allen on how his office has handled the properties it has purchased from the county’s tax-foreclosure list.

“I think that might be a good idea,” said County Commissioner Candace Chivis. So did Allen.

At their last meeting, Chivis and commissioners Michael Wawee, Tom Antor and Dick Vander Molen heard County Corporate Counsel Dan Ophoff tell them the land bank didn’t violate county policy or the state law that governs land banks when it bought 45 properties on the list from the county for $420,000 prior to the public auction.

That purchase aggravated some real estate agents, who claimed the land bank was “cherry-picking” properties and keeping the private sector from bidding on key parcels at the auction. It also aggravated the Kent County Taxpayers Alliance, which announced last week it was a part of a lawsuit filed against the county, the land bank and County Treasurer Kenneth Parrish. The alliance claimed the sale violated county policy and state law.

“We have not been served with a complaint, yet,” said Ophoff last Thursday.

In response to the real estate agents’ earlier claim, Commission Chairwoman Sandi Frost Parrish organized the subcommittee that consists of the four commissioners and assigned them to come up with a process on how future purchases should be conducted.

“If we’re going to allow the land bank to purchase properties, it should be a per diem. If you have 45 properties on a list of 309, commissioners should go through each one the land bank wants,” said Wawee, who chairs the subcommittee.

Vander Molen felt the group should give the commission a pre-set number of tax-foreclosed properties the land bank can buy each year. Antor said that figure should equal 16 percent of the yearly total, which would have been 50 properties this year.

Antor offered that percentage because it represents how many properties have been bought at the public auction by private investors who then didn’t pay property taxes on their purchases for the next three years, which put those properties into foreclosure again.

This past summer the land bank bought about 15 percent of the 309 listed properties, with the majority being residential. But it sold 19 to four nonprofit housing developers, and it bought two flooded parcels on behalf of a township so its officials could purchase the sites from the land bank and meet a federal grant deadline to capture cleanup funds. That left the land bank with 24 properties of its own, or roughly 7 percent of the total on the foreclosure list.

“We certainly did try to provide information on each property,” County Treasurer and KCLBA chairman Kenneth Parrish told the subcommittee. He explained that the land bank’s advisory council and another committee reviewed and approved the foreclosed properties it wanted to buy before the purchase list was completed and given to the county. Both groups have members of the private sector onboard. “We do have a vetting process,” he said.

Parrish also told the subcommittee the land bank didn’t just choose the best properties on the list. He said some of the parcels the bank bought are in awful shape and probably will be demolished. “We did take a couple of better properties, yes, we did, but there was a reason for each one,” he said.

The “poster-boy” property that ignited the cherry-picking claim in this past summer’s dispute was a house on Montauk Drive NW in Alpine Township. The home’s State Equalized Value was $77,500, which meant the house had a market value of about $150,000. The land bank bought it for $10,500, the amount of back taxes and fees owed the county.

Parrish said there wasn’t a guarantee that if the Montauk house went to auction a buyer would have invested the $60,000 the land bank is putting into the property. He said the home’s neighbors have said they’re pleased with the improvements the land bank is making because it maintains their property values. Parrish said the house will probably go on the market for $170,000 once the construction work is done.

“The first five properties we’ve sold went to the private sector, and those sold at a higher value than what they would have sold for at the auction,” said Allen, who added that the land bank’s top objective is to maintain property values. “I view everything I do as preserving property values.”

“I like your passion and energy,” said Wawee. “Having said that, I think the county has to decide if the land bank can buy properties before the auction and how many.”

Antor, though, felt the land bank hasn’t been around long enough to establish a track record and maybe the county should hold off on making a decision until it does. “We may be talking about a problem that doesn’t exist,” he said.

“We should see how this thing shakes out,” said Vander Molen, who added that he only heard complaints from about six real estate professionals.

Vander Molen also pointed out the foreclosure process allows cities and other municipalities to buy the properties in their jurisdictions from the county before the parcels go to auction and then sell the sites to nonprofit developers or to the land bank.

“One of the reasons I created the land bank was to get the cities out of that practice,” said Parrish. He also said he has heard of cases in other areas of the state where a public official has convinced a board to buy a foreclosed property so the official could buy it for taxes from the board.

In addition to Allen’s presentation at the subcommittee’s next meeting Nov. 8, commissioners asked Parrish to provide them with the number of properties other counties have sold to their respective land banks for comparative purposes. Parrish said he would do that.

“You took a leap of faith with us in 2012,” Parrish said to the four commissioners. “We’d appreciate it if you gave us the time to show you what we’ve done. We certainly are more than happy to provide you with what you need, but give us some time to work our magic on what we have.”

Recent Articles by David Czurak

Editor's Picks

Comments powered by Disqus