Land bank’s impact more than original estimate
Local agency posts impressive economic gains in first year.
Instead of the $4.1 million figure it presented in November, the actual yearly number turned out to be $5.2 million.
“In my opinion, that’s an extremely important investment,” said Dave Allen, KCLBA executive director.
Of that total, the land bank spent the largest share, $2.8 million, with contractors for the work to upgrade the agency’s properties. Another $973,000 went to realtors for sales commissions, for title insurance fees and for land surveys.
The land bank also paid $422,000 last year in taxes to the county when it bought more than 40 tax-foreclosed properties; another $8,000 went to a few other taxing jurisdictions.
“Our staff developed 63 properties in one year,” Allen said of his three employees. “I think that’s a very good track record.”
The land bank’s 2013 budget is $1.25 million — more than $70,000 higher than last year’s — with potential legal costs making up the bulk of the increase. The bank has set aside $50,000 of that increase for expenses connected to a lawsuit that 11 plaintiffs filed last fall against the county, KCLBA and County Treasurer Ken Parrish, who also chairs the authority.
The suit charged the county’s sale of the tax-foreclosed properties to the land bank in July violated state law and county policy, but a Kent County Circuit Court judge dismissed the complaint in December. The plaintiffs have appealed the decision to the state appellate court.
“We’re in a waiting game there. The lawyers tell us this could take from 18 months to two years (to resolve),” said Parrish.
“I think it’s very important for us to develop a cash reserve for our ups and downs,” added Sharon Brinks, a Kentwood city commissioner and land bank board member.
Despite the legal tussle, the land bank sold 42 tax-foreclosed properties for $965,000 last year that netted the agency $350,500. KCLBA also sold 17 properties to nonprofit housing developers in 2012 for $141,800 that brought the bank $9,400. Most of the 59 sales were residential, and 27 were located in Grand Rapids. Four houses donated by local banks and others sold for $145,000 and brought the land bank an additional $35,000.
Total sales in 2012 came to $1.25 million; the land bank earned nearly $395,000 from those sales.
Allen said the land bank made a profit on all but one sale last year, where it lost $4,200.
“The taxpayers didn’t lose a dime,” he said of the transactions. Allen also said about $1 million worth of sales came from transactions with members of the Grand Rapids Association of Realtors.
“I’ve been very impressed with what has happened with the land bank. I was skeptical at first, but I’ve become a believer,” said Alan Kitson, president and sales manager of Lee Kitson Homes.
The KCLBA board approved the 2013 budget and also welcomed Audrey Nevin Weiss as its newest board member. Weiss is supervisor of Byron Township and replaces George Meek on the board.
Allen said the land bank finished 2012 with a budget surplus of $125,000 and spent $8,000 less than was projected for the year, which was the agency’s initial year of operation.
“We learned a lot last year,” he said, “and we’re going to be better this year.”