County Board to Vote on Folding Land Bank

Less than a year after the county authorized the formation of a land bank, the Washtenaw County Board of Commissioners will consider dissolving the entity at its March 17 meeting.

At their administrative briefing on Wednesday, commissioners discussed the move with county treasurer Catherine McClary, who also attended the meeting. McClary had originally proposed the land bank as a mechanism allowing the county to take temporary ownership of tax- or mortgage-foreclosed land. The intent would be to give the county options for dealing with blighted property, other than selling it off at auction.

But anticipated federal funding didn’t come through, and a dispute among some commissioners about who would serve on the land bank authority board stalled the project. “It’s fair to say that the county was not sold on it,” McClary said at Wednesday’s meeting.

Land Bank: Issues of Funding, Control

Starting back in July 2009, when Catherine McClary first asked the board to formally support creation of a land bank authority, issues of funding and control were at the forefront in the board’s discussions. [See Chronicle coverage: "Banking on a Land Bank"]

Funding

At their July 8, 2009 board meeting, commissioners quizzed McClary about details of the proposal, which they ultimately approved that evening. While some commissioners expressed support, others – including Wes Prater and Ronnie Peterson – said they were concerned about taking property off the tax rolls and worried that the board wouldn’t have any control over the land bank’s governing entity. Board chair Rolland Sizemore Jr. asked McClary at the time whether the board could dissolve the land bank, if they didn’t feel it was effective. She told him that they could.

The initial plan called for funding the land bank with $300,000 from the federal Neighborhood Stabilization Program, which the county had already been awarded. In July, the county applied for additional NSP funds – including nearly $5 million for the land bank – but did not receive the funding.

At Wednesday’s briefing, commissioner Leah Gunn pointed to that lack of funding as the primary reason for dissolving the land bank, saying “I think the land bank train has left the station.” She said the Washtenaw Urban County – a group which she chairs – can use the original NSP dollars to rehab blighted properties, working with housing nonprofits like Avalon Housing and Habitat for Humanity. The Urban County is a partnership of the county, the cities of Ann Arbor and Ypsilanti, and eight townships, working together to allocate funding from the federal Community Development Block Grant program.

Ken Schwartz said it seemed to be a question of whether the land bank was a good vehicle for the county to use at this time. He said there’d been a lot of fighting around the issue, and that it never seemed as though the board could get behind it.

Control

Conan Smith, an advocate for the land bank, said the blame for not making it work rests “squarely on our shoulders.” The board’s bickering with McClary over the land bank authority’s bylaws dominated the conversation, he said, and they weren’t able to come to consensus about which commissioner to appoint to that governing entity. [The Ann Arbor city council appointed a representative – councilmember Sabra Briere – but commissioners themselves never did.]

The land bank authority was to include one commissioner on its board – an appointment that both Smith and Prater sought. At Wednesday’s meeting, which Prater did not attend, Smith said he originally had the six votes needed for the appointment. But rather than push the issue and create tensions during the already difficult budget deliberations, Smith said, he chose to lobby to get two positions created for commissioners on the authority’s board, so that both he and Prater could serve. In hindsight, that was a mistake, he said.

Likening it to the county’s Economic Development Corporation, Smith said the land bank would have allowed the county to be proactive. “It’s a tool we should have at our disposal,” he said. However, if they can’t use the land bank efficiently, he added, it makes sense to dissolve it.

For her part, McClary told commissioners she felt like she’d done a poor job in explaining the benefits of a land bank. It was primarily aimed at tax-foreclosed properties, she said, more so than mortgage foreclosures – though both kinds of foreclosures have been on the rise. In 2008, there were 26 tax foreclosures from tax year 2005, she said. [It takes three years to get to the point of foreclosure, beginning when a taxpayer is delinquent on their taxes.] In 2009, there were 102 tax foreclosures, with 45 of those ultimately sold at auction. This year, there are 515 properties in tax foreclosure, though McClary said some of those will be redeemed if property owners come forward to settle their bills.

It’s often out-of-state companies that pick up properties in tax-foreclosure auctions, McClary said: “They’re bottom fishing.” The mechanism of a land bank would have allowed the county to  hold the properties temporarily and partner with nonprofit housing agencies to rehab and resell them. Or if necessary, the houses could be demolished and the land used for other purposes.

The beneficiaries are really the municipalities, particularly in the Ypsilanti area, McClary said. But without the board’s support, she added, it was difficult to move forward.