Government, Law, and Real Estate

Land bank questions abound

Kent County’s decision to dissolve organization is met with strong opposition.

December 21, 2018
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After hours of passionate debate from residents and community leaders, Kent County commissioners voted to dissolve the land bank.

The Kent County Land Bank Authority, which began operations Jan. 1, 2011, to efficiently return blighted homes in Kent County to the market, has 12 months to settle its finances and transition assets.

The 11-8 decision comes after a report from the county administrator’s office cited multiple concerns issued in 2016 it believes have not been addressed, including a lack of communication and transparency, and significant mission changes to become a “real estate development partner.”

Without consulting Kent commissioners or its advisory board, according to the report, the organization in June changed its name to InnovaLaB as part of an effort to increase focus on developing more affordable housing for low- and middle-income buyers, including through a new partnership with Champion Homes to build modular homes. The report stated tax revenue is “seemingly co-mingled with fees to complete this work.”

The land bank even has been recognized as a “model” by the Michigan Land Bank and other communities in the Midwest for how land banks can evolve from focusing on the elimination of blight to helping create affordable housing.

But this is not what the organization was formed to do, said Jim Saalfeld, Kent County board chair, adding many Kent commissioners did not know about mission and branding changes until afterward.

"I assumed that with (former) Assistant Administrator Mary Swanson participating in the land bank strategic planning process, the information would have made it back to the administrator's office and executive committee,” said Ken Parrish, Kent County treasurer and chair of the land bank. “As chair of the board, that's on me. I’m sorry.”

Saalfeld said the land bank was meant to finitely deal with blight, not to last forever, and with a reduced rate of foreclosures since then, he and other proponents argue it has served its purpose.

“They did it well, and it's time to move on,” Saalfeld said.

Due to the mission changes, there also have been concerns about competition with the private sector, which Patrick Mohney, board member of the Commercial Alliance of Realtors, argues causes some developers not to invest.

Multiple other realtors also voiced support of dissolving the entity and said the private sector should be left to invest in affordable housing.

Kent County commissioners received notice only days before they were to vote on the issue, a point of contention for many, who cited rules that prohibit hasty action without extenuating circumstances. A motion to postpone the vote to deliberate and answer commissioners’ many questions was struck down 10-9.

Kent County Administrator Wayman Britt said the vote should not come as too much of a surprise, though, because there have been concerns about the group since 2016.

Commissioner Betsy Melton requested documents to help determine financial implications regarding the decision, but said she was told there was not time to provide that information.

“The number one charge against the land bank was its lack of transparency. I find this lack of deliberation a lack of transparency,” said Kent Commissioner David Bulkowski. “For me, this isn't about deliberation. This is about power and authority and punishment.”

In 2016, a subcommittee of Kent County commissioners, including Mandy Bolter, Bulkowski, Matt Kallman, Roger Morgan and Ted Vonk, were appointed to review the land bank.

Upon completion, the subcommittee issued several recommendations, including an increase of transparency and avoidance of mission creep, promising to “review the continued need” of the land bank in 2020.

This fall, county staff conducted a review to determine if the recommendations were being implemented. This included interviews with its advisory council and board members, several “community stakeholders” and land bank Executive Director Dave Allen.

The shareholders, who were not named, reported the several issues cited in the county proposal to dissolve the land bank.

The report also mentioned concerns about Allen’s personal interaction style. In the land bank’s 2013 strategic plan, this was “flagged as potentially a problem where passion and knowledge could be misinterpreted as condescension or impatience.”

The proposal received significant pushback from many nonprofit and community leaders, who said the land bank helps provide needed affordable housing and lead abatement, and asked for more time to solve issues.

Opponents to the dissolution included: Plainfield Township Supervisor Robert Homan, Grand Rapids City Manager Mark Washington and Mayor Rosalynn Bliss, Grandville Mayor Steve Maas, Plainfield Township Superintendent Cameron Van Wyngarden, Laurie Craft of the Grand Rapids Community Foundation, LINC Up Executive Director Jeremy DeRoo and Dwelling Place CEO Dennis Sturtevant.

Kent County Treasurer Ken Parrish emailed commissioners a long list of concerns about what could happen once the land bank is no more, including halted plans for multiple affordable housing developments and the possibility of a German company moving onto one of the properties.

Sturtevant sent county commissioners an email saying the Dwelling Place’s 45-unit affordable housing project, undergoing construction, “would not have been possible” without the land bank’s support.

Ryan Schmidt of Inner City Christian Federation said the land bank has been useful in its work in community development. He said seven of the last eight single-family homes that have gone through its resale program have been assisted in some way by the land bank.

"Are we really going to shut down what we have heard clearly stated by community leaders is a significant tool for addressing affordable housing? That's simply beyond my comprehension,” Kent Commissioner Jim Talen said.

Despite comments from some who said the housing market has improved, Talen and others pointed out that is only true for those who can afford it.

“For most people, the housing market is more difficult than ever,” Talen said.

The Grand Rapids Community Foundation gave $80,000 to start the land bank, as well as $1 million in loans, which Craft said all have been paid back.

“The commission says that it wants to support affordable housing, but your actions today don't reflect that,” Craft said.

The county does have the option to create another land bank if one is needed in the future, and some commissioners have suggested continuing to negotiate on how that could look even after voting to dissolve. The organization also could attempt to establish itself as a nonprofit.

Now that the land bank is set to dissolve, Parrish said he believes the uncertainty will prevent partnerships with banks or other organizations.

Parrish said he believes the organization will be able to settle its debt and transfer assets, though there are questions about exactly how that will happen. He requested the county board fill the land bank’s two empty board positions to help with the transition.

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