Government and Real Estate

Land bank bills making the rounds in Lansing

State GOP legislators offer differing directions for such authorities.

November 22, 2013
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Apparently, Republican lawmakers in different areas of the state see land bank authorities in a different light.

State Rep. Ken Yonker, R-Caledonia, introduced a bill in the House last April that would severely punish a land bank authority if it is found violating the state’s Land Bank Fast Track Act.

But recently Republican State Sen. Darwin Booher of Evart was the primary sponsor of a Senate bill that would amend the General Property Tax Act to let a land bank buy tax-foreclosed properties before an annual tax auction is held. Evart is east of Reed City in northern Michigan.

Yonker’s bill, HB 4626, has been assigned to the Committee on Local Government. Booher’s bill, SB 640, was sent to the Committee on Finance and then reassigned to the Committee on Banking and Financial Institutions.

At the committee level, Yonker’s bill has been tied to HB 5083. Rep. David Rutledge introduced that bill and is the newly elected House Democratic Floor Leader from Superior Township.

HB 4626 would require the state Department of Treasury to suspend a land bank authority from buying properties if it bought or acquired a property in violation of the land bank act. The bill also would allow any person or business entity to file a complaint against a land bank, and require a land bank to pay all “reasonable” attorney fees of an opposing party if it lost a case at the circuit-court level.

At its introduction, the bill also required the land bank’s overseeing body, such as a city or a county, to fire its director if an authority was caught violating state law when it bought or acquired a property.

“The legislation will make land banks accountable for their actions and prevent them from abusing the system,” said Yonker in a statement he made a few weeks ago. “Creating a complaint process creates a check-and-balance system between land owners and land banks.”

At the last Kent County Legislative and Human Resources Committee meeting, Becky Bechler, of Public Affairs Associates, indicated Yonker’s legislation was a direct response to the ire that surfaced when the county sold 44 tax-foreclosed properties to the Kent County Land Bank Authority in July 2012.

A small group of local realtors and residential developers sued the county, the land bank and county Treasurer Ken Parrish shortly after the sale, claiming the county’s sale violated state law, but they lost in circuit court. The plaintiffs appealed the ruling and a decision is pending.

The same group also sued the city of Grand Rapids, the land bank and Parrish over the city’s sale of 152 properties to KCLBA this past summer, claiming it, too, was an illegal sale. The case is pending at the 17th Circuit Court.

“Yonker’s bill has a direct impact on the county’s land bank and there was interest from both parties in the legislation,” said Bechler, whose firm represents the county in Lansing.

Parrish, also KCLBA founder and chairman, and KCLBA Executive Director Dave Allen said the authority doesn’t have any concerns about land banks being held accountable. Both, however, pointed out there were enough checks and balances already in place to accomplish this.

Parrish and Allen also said Yonker’s bill “appears to be a solution in search of a problem.”

HB 5083 would allow a blighted or tax-foreclosed property to be directly transferred to a land bank if the state doesn’t claim it, if it wasn’t sold at auction, and a municipality doesn’t buy it. A land bank would have to request the property and pay its minimum bid to take possession. If a local land bank doesn’t request it, then a city can send the property to the state land bank authority.

HB 5083 also would define the term “public purpose” to mean for use as a park, or a museum, or an open space made available to the public. The term can also mean a public utility or public infrastructure under the legislation.

As for SB 640, the news service of the Mackinac Center for Public Policy, a conservative think tank based in Midland, cited a spokesman for Booher as saying the language that would allow a land bank to buy a tax-foreclosed property before an auction would be removed from the legislation. But CAPCON also reported that the Booher camp hadn’t set a timeline to do that.

“We’ll watch with interest to see what changes actually take place with the legislation,” said Jack McHugh, senior legislative analyst with the center in the CAPCON story. “But one can’t help wondering if the original version is one more indication of the growing land-bank empire’s skill at political manipulation,” he added.

“In addition to scaling back that empire, lawmakers should keep a sharp and skeptical eye on these slick operators.”

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