Municipalities slowly move toward using land banks to eliminate blight
By Sam Spatter
Published: Saturday, Sept. 14, 2013, 6:58 p.m.
A relatively new state law could help municipalities eliminate blight, say officials who are working together to address the problem in many older communities.
John Palyo, Amanda Settelmaier and An Lewis, who respectively head Twin Rivers, Turtle Creek Valley and Steel Valley councils of government, believe the Land Bank Act empowers them to buy abandoned properties that became eyesores in the 41 municipalities they represent. The law took effect in October.
“We would have ownership of a property and be able to transfer (it) to a developer, a process which municipalities may not have the capability to do,” Palyo said. “We can no longer overlook what these vacant and blighted properties are doing to the value of our properties.”
A land bank, a public authority, acts as a legal and financial mechanism to transform vacant, abandoned or tax-foreclosed properties to productive use. Officials say that can help spur redevelopment in communities with little available land and neighborhoods that lost residents and businesses over the years.
Land banks can acquire properties through purchases, gifts, transfers or foreclosures — but not through eminent domain, said Christopher Houston, chief counsel for the state Department of Community and Economic Development.
When a property goes into a land bank, tax claims and liens aren't automatically dismissed. Municipalities or school districts to whom money is owed decide how to satisfy those claims.
Dauphin County in May became the first county to form a land bank, initially funding it with $250,000 in casino taxes. It focuses on tax-delinquent properties, leaving properties with value “part of the normal foreclosure process,” Dauphin County Commissioner George Hartwick said.
Others are considering the idea, but the law does not provide money to establish land banks.
“We are finalizing plans now to form a countywide land bank authority,” Westmoreland County Commissioner Ted Kopas said. Officials believe that “will help stabilize neighborhoods, encourage private investment and get these blighted properties back on the tax rolls.”
In Washington County, Commissioner Larry Maggi said, officials are working with the county Redevelopment Authority to determine how to proceed.
“As with so many issues we face today, funding is a major issue,” Maggi said.
Palyo said civic leaders might need to approach foundations for startup money. “But once it is operating, financing will result from such sources as the sale of properties ... plus sharing the increased taxes paid by the new owner.”
Allegheny County Executive Rich Fitzgerald said he supports the idea, “but the question is finding funds.” Fitzgerald prefers giving municipalities control of such properties.
A study sponsored by the three councils of government is nearing completion. It found 7,158 blighted structures and 20,777 vacant parcels in the municipalities, Palyo said. Whether it would be cheaper to acquire properties through the land bank law or through a sheriff's sale or condemnation isn't clear, said Lewis.
The Turtle Creek Valley COG received $600,000 from the Environmental Protection Agency to map brownfields and document environmental problems that need to be addressed in order to market the properties. Only former commercial or industrial sites are being looked at, Settelmaier said.
“While this study is not directed at providing information for a land bank, down the road it may provide some information to the bank,” she said.
Lewis said the nine communities in Steel Valley COG could benefit from a land bank because many lack the money to buy blighted properties.
The three COG leaders could form a regional land bank to clear a 10,000-population threshold the law requires. They are determining whether it's better to create the land bank as an authority or an instrument of the councils.
Pittsburgh Councilman Ricky Burgess of Homewood last year failed to get support for an ordinance to establish a land bank for the city. Marissa Doyle, a spokeswoman for Mayor Luke Ravenstahl, said the mayor's Land Recycling Task Force is working on another draft.
Sam Spatter is a Trib Total Media staff writer. He can be reached at 412-320-7843 or firstname.lastname@example.org.
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