hb-712-land-bank-bill-analysis-for-pgh

advertisement
MEMO
To:
Kim Graziani, Mayor’s Office
Aggie Brose & Bethany Davidson, PCRG
From:
Irene McLaughlin & Kendall Pelling
Date:
May 13, 2010
Subject:
Pittsburgh Land Recycling and House Bill 712
Overview:
A land bank is single purpose entity created to acquire, manage and dispose of vacant,
abandoned and tax delinquent properties for their most beneficial reuse. House Bill 712
provides state authorization for creation and administration of land banks as public
authorities outside the structures of the traditional political subdivisions. The goal of
HB712 is to present the strongest possible platform for the creation and operation of
land banks across Pennsylvania.
Municipalities are already able to take on land banking functions and may possibly
create an authority under existing law. HB712 facilitates the process. It removes much
ambiguity about the authority, powers and structures a land bank may have. With
HB712, land banks may be created with the confidence that their provisions are legally
permissible and clearly supported by state law.
Effective land banks are built upon fair and efficient real estate tax collection and tax
foreclosures systems in place for the participating municipalities. PA tax collection and
foreclosure reforms will facilitate more efficient land recycling with HB712 powers.
Sustainable land banking requires independent means of financing. Some financing
opportunities are available under HB712. Money to pay for land bank operations can be
found by modernizing and re-engineering tax collection and foreclosure processes.
Thanks to the Ford Foundation and their funding of the newly created Center for
Community Progress (CCP) in Washington, DC, Dan Kildee, Founder of the Genesee
County Land Bank and Frank Alexander of Emory University are working in
Pennsylvania with us. CCP, in collaboration with a land reform working group, re-drafted
HB 712. As a result, Pennsylvania benefits from and will contribute to a 30-year
evolution of land bank best practices that have developed in a handful of states.
Pittsburgh’s experience and expertise will be integral to shaping tax collection and
foreclosure reform legislation to help finance the land bank.
Recommendation:
HB712 is a positive step that allows additional land recycling opportunities in the City of
Pittsburgh. It should be evaluated to resolve final questions and explore unintended
consequences.
How will HB 712 impact Pittsburgh’s land recycling efforts?
Advantages:
 HB712 provides options and opportunities only, no obligations by using “may”
and not “shall” language; it is enabling legislation
 Clearly permits a Land Bank to have the all the powers they generally need.
This would make the Pittsburgh process simpler by reducing the ambiguity
about what we can or cannot legally do.
 Permits a structure that has most of the new revenue tools that are used by
the Genesee County Land Bank – revenue bonds/DTAN’s, 5 year 50% tax
recapture ,etc…
 Proposes desirable changes to tax foreclosure laws as they relate to land
banks.
 The Land bank bill does not preclude other innovative approaches that are not
explicitly allowed by the bill.
 Proposes an expedited quiet title process for land bank properties (this needs
to be further evaluated)
 Pittsburgh Land Reserve can continue unaffected by enactment of HB712 if
we choose not to form a separate authority.
Disadvantages:
 TIF is not explicitly granted. Would this require other legislative changes?
 This bill does not fully revise tax foreclosure statutes to improve land bank
operations and finances. Additional bills would be required with regard to.
o Current statutory maximum interest rates of at most 12%
o Minimal service provisions in the Treasurer’s sale
o Title clearing challenges
o Non-judicial T-sale versus one event, single free and clear judicial sale
 If the founders of a land bank want powers that are not specifically permitted,
they will have to figure out if such powers are permitted through other laws.
This situation would be worse without HB 712
 A land Bank may not use Eminent Domain – though maybe we would not want
this power anyway. The county vacant properties process does use eminent
domain, and we should evaluate this tool that could be excluded from land
bank use. Any public body can transfer any property to a land bank once they
own it, so there is the potential to land bank property that has been acquired
by the public through eminent domain via a separate entity.
 Sets clear parameters for organizational structure and operations. While these
are probably fine, their constraints should be evaluated further.
 Sets school districts in a separate category. This allows them to potentially opt
out of certain provisions, like compromising taxes, having board
representation, etc.. We would not want to allow the school district to opt out,
though this could be accomplished through an intergovernmental cooperation
agreement.
 Does not specifically provide for the inclusion of other public authorities (like
PWSA) in the creation of the land bank. While it is not excluded, having a


provision for their inclusion could smooth the path to having PWSA in the land
bank, and the Land bank having the power to compromise their charges.
Requires Land banks to maintain properties according to city code.
Does not explicitly define tax foreclosure acquisitions as an “involuntary
taking”. Involuntary taking language was used in Michigan to limit liability for
environmental contamination.
Comparison of existing land recycling provisions and the HB712 Land Bank Bill:
Pittsburgh Land Reserve
Creation by
Memorandum of Understanding
using existing City of Pittsburgh
powers
House Bill 712 Land Bank
a municipality, or jointly created by municipalities,(a
county is defined as a municipality) with participation
from school district(s), and governed by a board of
directors in accordance with corporate bylaws,
intergovernmental cooperation agreements (ICA), and,
corporate policies and procedures.
Acquires property
by tax foreclosure initiated by city,
qualified community development
corporations (CDC’s) and URA
(identify properties for tax sale)
by tax foreclosure initiated by participating municipality,
or the land bank (if liens are assigned to land bank);
able to be the successful bidder without actually paying
the upset price
by any form of real property transfer (purchase,
donation, exchange, etc..) in any manner, from any
source
no power of eminent domain
Title & Real Estate Tax Exemption
property titled to City of Pittsburgh, title is in the name of the land bank, properties in land
thereby tax exempt
bank exempt from real estate taxes
back taxes compromised by 3TB
agreement
Manages
ICA amongst participating taxing bodies and tax
foreclosure procedures governs back taxes
city is self-insured for liability
may procure insurance
assembles properties for qualified
CDC redevelopment;
assembles properties in areas both served and unserved by qualified CDCs;
maintains properties
maintains properties
demolishes properties
demolishes properties
redevelopment with URA
collaboration
redevelops properties, on its own, or in partnerships,
joint ventures etc.
no leasing
leases property;
funded by the city operating
budget and the proceeds of the 3
taxing bodies agreement
may receive funds from various sources, receive &
retain payments for services rendered, rents, etc.
may borrow and issue revenue bonds
city staff perform functions
any staffing arrangements possible
public inventory required
Disposes of property
to CDCs at very affordable
acquisition cost for redevelopment
– sales must be approved by City
Council and follow public
disposition processes.
to any transferee in accordance with policies set by the
board of the Land Bank.
to the public according to
approved procedures
maximum flexibility in disposition and approval
processes
proceeds distributed according to
the 3TBA
broad flexibility to contract for services, such as
marketing properties for sale, other services. Flexible
contracting requirements.
not governed by Redevelopment
Authority Law & procedures
minimal marketing ability
may set priorities for the re-use of property and limit
transfers accordingly
consideration can be non-monetary (commitments,
development agreements, other actions valuable to the
public)
revenues stay in the Land Bank
not governed by Redevelopment Authority Law &
procedures
Download