Land Banks and Land Banking

2010 to Today

What is a Land bank

• Not-for Profit Corporation- Created pursuant to N-PCL § 1603 by one or more Foreclosing Governmental Units (FGU).

• Public Authority (Local Authority)– as defined by PAL § 2(2)(b) not-for-profit corporation affiliated with, sponsored by, or created by a county, city, town or village government.

• Public Corporation – This definition is required if N-PCL § 1610 is to be read to be consistent with prohibition of lending and gifting to private corporations contained in Art VIII Sec. 1 of the New York Constitution.

Land Bank as a Public Authority

• Must Comply with the requirements of New

York Public Authorities Law

Submit required reports

Follow Property Disposition Requirements

Create required Policies

Create Required Committees

PAL Reports

• Annual Report – PAL § 2800, due within 90 day of start of fiscal year. Must include all those elements listed at PAL § 2800(2)(a). Must be published on the webpage. Must be approved by the Board and certified by the CFO and CEO. The ABO can waive any requirements of this report upon application.

• Budget Report – PAL §2801, not more than 90 days but not less than 60 days before the end of the fiscal year. Submitted to the Mayor, County Executive, Chair of the Legislature, and President of the Common Council, and the ABO. Must include:

• Estimated receipts and expenditures for the next fiscal year and current fiscal year; and

• Actual receipts and expenditures of the last completed fiscal year

• Personnel reports – PAL § 2806 due on or before January 15th of every year. Must contain Position, grade, title, and salary for each employee. May be included in the Annual report.

• Mission Statement and measurement Report- PAL § 2824-a, must adopt a mission Statement, and measurements, and publish an annual self evaluation based on the measurements.

• Property Report- PAL §2896 (3), must be published annually. List all Real property held, and all real and personal property (over 5k for personal property) disposed of during the period, also the price and name of the purchaser. Must be delivered to the Comptroller, Director of Budget, Comissionerof General Services, the Legislature, and the ABO.

• Investment Report – PAL § 2925 (6), must be prepared annually, and may be included as part of the annual report. Must include investment guidelines, results of annual independent audit, investment income, fees, commissions or other charges paid. Must be made available to the public upon request.

Land Bank as a Not-For Profit

Corporation

• Must Comply with the New York Not-For

profits Corporation law

– Prudent Management of Institutional Funds Act

– Land Bank Act

Land Bank Purpose

• To efficiently and effectively acquire,

hold, manage, develop, and dispose of

tax delinquent, abandoned or vacant

property.

Side Lot Program

Creates larger more suburban like City parcels and returns vacant lots to

the tax roll.

Help to remove barriers in the open market.

- Remove liens

- Reduce acquisition costs to make rehabs feasible

- Property control allows for accurate cost up specifications

Facilitate

Rehabilitation of

Old Housing Stock

Site Assemblage for larger Projects

Operational Powers of a New York

Land Bank

• Acquire Real Property

• To be Tax Exempt

• Dispose of Property conditionally

• Acquire and Service tax liens

• Issue Bonds

• Accept Grants or Loans from the FGU(s)

• Share Future Tax Revenues with the FGU(s)

Number of Land Banks in New York is

limited to ten

• Five have been awarded

• Cities of Buffalo, Lackawanna, Tonawanda and Erie County

• City of Syracuse and Onondaga County

• City of Schenectady, County of Schenectady and City of Amsterdam

• Chautauqua County

• City of Newburgh

• Five to be awarded in 2013

• Applications are available now at: http://esd.ny.gov/BusinessPrograms/NYSLBP.html

• Deadline for submission of application is January 30, 2012

Other Mechanisms for Land Banking

Syracuse and its Urban Renewal

Agency

• What is an Urban Renewal Agency?

• Public Benefit Corporation created pursuant

to General Municipal Law.

• Public Authority (local authority) as defined by

PAL § 2(2)(a).

Many Urban Renewal Agencies Lie Dormant.

Over one hundred and nineteen Urban Renewal Agencies created pursuant to General

Municipal Law since 1963.

Most have been abandoned or repurposed and do not perform the original functions

of Urban Renewal.

Authorities Budget Office has been seeking to dissolve non-functioning Public

Authorities.

“Today, August 16, 2012, Governor Cuomo signed into law two bills – A. 10288-A /

S.5198-D and A. 8823-A / S. 5227-B – that repealed the statutory authority for 123

public authorities including industrial development agencies, urban renewal agencies,

and other local public authorities” – The Newburgh Advocate

Powers of an Urban

Renewal Agency are

similar to those of a Land

Bank.

Acquire Real Property within a

designated area

To be Tax Exempt

Dispose of Property

conditionally

Acquire and Service tax liens

on real property

Issue Bonds

Accept Grants or Loans from

the Municipality

Eminent Domain

Land Banking with an URA

• URA must designate an area as appropriate for Urban Renewal (requires a finding of blight or threat of blight). The area or a subsection of the area must then be approved by the municipality.

• URA Creates an Urban Renewal Plan - In contrast to historical urban renewal plans, urban renewal plans for the purpose of land banking should be broad and flexible to allow for different types of development in the urban renewal area.

Plan Requirements:• Proposed land uses.

• Proposed land acquisition

• Demolition and removal of structures

• Acquisition of air rights and easements

• Proposed methods or techniques of urban renewal

• Proposed public, semi public, private, or community facilities

• New or amended codes and ordinances necessary to effectuate the plan

• Proposed program of code enforcement

• Proposed time schedule for effectuation of the plan

• Any other appropriate statements or documentation as deemed appropriate by the URA

Approval of the plan

• Submission of the plan to planning commission to certify after a public hearing that the plan conforms to Gen Municipal Law § 502(7) and conforms to the findings made pursuant to General Municipal Law § 504. The planning commission within 10 weeks must, 1) give its unqualified approval, 2) disapprove, or, 3) give a qualified approval, with recommendations for modifications.

• After report is received by the governing body, and a public hearing is held, the governing body may approve or disapprove of the plan based on the recommendation of the planning commission GML § 505(3).

• Upon approval of the plan, the governing body must make findings that the area is blighted or in danger of becoming blighted, that the financial aid to be provided is necessary to enable the project to be undertaken in accordance with the plan, that the plan provides maximum opportunity for private enterprise, the plan conforms to the comprehensive municipal plan, and that there is a feasible method for the relocation of displaced persons.

Powers of a Land Bank vs. Powers of an Urban Renewal Agency

Land Bank Urban Renewal Agency

Acquire, Manage and dispose of Property yes yes

Hold Real Property Tax Exempt yes yes

Power of Eminent Domain no yes

Dispose of Property at less yes yes

than Market Value

Acquire property from municipality yes yes

with little or no consideration

Acquire and Service Tax Liens yes yes

Share in future Tax Revenues yes no

Accept municipal grants and loans yes yes

Contract with Municipalities for services yes yes

COSTS ASSOCIATED WITH HOLDING

REAL PROPERTY• Taxes- unpaid taxes and special assessments (ie.

county sewer, special lighting, downtown, sidewalk repair, sweeping, etc)

• Water- any non-discharged water charges, as well as water not billed, water going forward, and tenant water charges (if any).

• Routine Land maintenance – Mow , Snow removal (for occupied structures include driveway and walks) trash removal from vacant lots (dumping).

• Legal costs- for acquisition of real property, disposition of real property, defense of claims, leases, evictions, and workouts for tenants and prior owners still in possession.

• Property Insurance – liability is a must. replacement for some structures. Companies may be unwilling to insure some properties.

• Marketing- Realtor listings, advertisements, signs.

• Management – collection of rents, tenant complaints, direction of maintenance for all properties.

• Appraisal – required prior to any parcel being disposed of.

• Environmental Concerns.

• Property Structure maintenance-

-Immediate dangers – demolitions, partial

demolitions, structural repairs.

-Habitable repairs – to maintain tenant habitability

(occupied spaces).

-Necessary repairs to protect investment (roofs,

siding, painting, pointing, board ups of windows and

doors).

-“Discretionary repairs” – to comply with codes, or to

improve marketability.

-Clean Outs – removal of trash from abandoned or

vacated structures.

Benefits of Land Banking

• Property Control (now)

• Disposition Control (later)

• Ability to convert blighted properties into productive properties

• Cure defects that cause the market to fail

• Increased tax base

• Reduce Municipal costs associated with blighted properties (board ups, mowing, demolition, crime)