using land banks to address brownfields
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Using Land Banks to Address Brownfields and Promote Economic Development2016 PA Brownfields ConferenceOctober 27, 2016Lancaster PA
Principal in Branton Strategies LLCAssisted land bank planning in Montgomery, Luzerne and Allegheny Counties
Winnie Branton
Chris Gulotta
Started The Gulotta Group LLC in 2010Assisted land bank planning in Northumberland, Schuylkill, Westmoreland, and Washington Counties
PA Land Banks 101
PA Land Bank Basics Enabling legislation
enacted in 2012 Counties and
municipalities with 10,000 population or more may create a land bank
Created by ordinance and intergovernmental agreements Image Source:
www.smartgrowthamerica.org
PA Land Bank Basics
Authorized, for the first time, the establishment of public entities to “confront the problems caused by vacant, abandoned and tax-delinquent properties through the creation of new tools to enable municipalities to turn vacant, abandoned and tax-delinquent spaces into vibrant places.”
What is a Land Bank?
A governmental entity whose single purpose is the conversion of vacant, abandoned and tax-delinquent properties to productive use.
How Does a Land Bank Work?
Image credit: Philadelphia Land Bank
What Challenges Can a Land Bank Address?
Remove barriers to redevelopment Address the staggering cost of blight Harness the positive economics of blight
remediation Create a unified, predictable and transparent
process for land recycling Serve as a start-to-finish central hub for a
local government’s blight prevention and removal efforts
Who’s In Charge?
Governed by appointed, volunteer Board with 5 to 11 members
Typically administered by existing government departments or agencies
Subject to all sunshine and ethics laws
Key Land Bank Powers
Acquire, hold and dispose of propertyAccept and extinguish tax liensQuiet title to property expeditiously
BUT, NO EMINENT DOMAIN POWER
Established PA Land BanksDauphin County (excluding Harrisburg)(5/13)
Lackawanna County (6/15)
Westmoreland County (12/13)
Schuylkill County (multi-municipal)(12/15)
Philadelphia(12/13)
Northumberland County (12/15)
Pittsburgh(4/14)
Washington County (3/16)
North East Pennsylvania Land Bank (multi-municipal, Luzerne)(6/14)
Lancaster County (excluding Lancaster City)
Harrisburg (7/14)
Tri-COG Land Bank(multi-municipal, Allegheny)
Venango County (8/14)
Land Banks, Brownfields and Economic Development
Definition of “Brownfield”
"real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential
presence of a hazardous substance, pollutant, or contaminant“
Small Business Liability Relief and Brownfields Revitalization Act, 42 USC 9601 (39), enacted January 11, 2002
Brownfields Redevelopment as an Economic Development Priority More and more this is a priority for economic
developers who are increasingly focused on redevelopment opportunities in core communities.
These types of projects are highly challenging because of the size and cost of the project. Many involve repurposing or tearing down old
manufacturing buildings Some involve redevelopment on land that has been
cleared but is tax delinquent Frequently there are environmental contamination
issues
Brownfields Redevelopment as an Economic Development Priority Land banks can be part of the solution in these
situations to acquire the real estate, especially if the property is tax delinquent.
Under the Land Bank Law land banks may file expedited quiet title actions.
Land banks do not need to go through a formal redevelopment contract process that sometimes hinders Redevelopment Authorities.
Land banks may dispose of property without going through a competitive bidding process.
Brownfields Redevelopment as an Economic Development Priority In many counties there is no organization that has
expertise in acquiring and disposing of difficult to develop real estate.
These functions (acquisition, environmental remediation, disposition) require skill sets that many existing organizations don’t have.
In the alternative a land bank could be administered by an existing organization that has these skill sets.
Opportunities at Tax Sales Upset Sales-Land Bank Powers
The Tax Claim Bureau and land bank enter into an agreement for the land bank to purchase the property(ies) at the minimum amount if no party bids higher than the minimum amount at the upset sale.
The minimum price is typically municipal liens, tax liens, and costs
The property is purchased by the land bank subject to other liens such as mortgages.
Opportunities at Tax Sales Judicial Sales-Land Bank Powers
An agreement is entered into by the Tax Claim Bureau and the land bank to purchase a property(ies) listed for judicial sale for a negotiated sum. In effect, land bank may trump other bidders.
The land bank as purchaser has an absolute title to the property sold, free and discharged of tax and municipal claims, liens, mortgages, ground rents, charges and estates.
Multiple properties may be bundled for sale.
Opportunities at Tax Sales Judicial Sales-Land Bank Powers (cont.)
Frequently properties at a judicial sale are acquired for relatively small amounts (usually the Tax Claim Bureau costs)
Speculators frequently bid on these properties and sit on the properties with no intention of redeveloping them.
A land bank can keep the properties from falling into the hands of speculators and clear title through the judicial sale process.
Acquisition Risks and Liability Concerns Is there contamination on the site
that will need to be cleaned up? How much will it cost? Who is responsible to pay for the
cleanup?
Liability Protections for Land Banks (and Local Governments) Act 3 of 1995, Economic Development Agency, Fiduciary and Lender
Environmental Liability Protection Act Section 2117(f) of the Land Bank Act – land bank acquisition at tax
sale is an “involuntary transfer” under HSCA – basis for innocent landowner defense
Land bank actions are not attributable to the local government that created it
Local government is not responsible for the Land Bank’s debt unless it expressly agrees to be
See also EPA’s CERCLA Liability and Local Government Acquisitions and Other Activities, https://www.epa.gov/sites/production/files/documents/local-gov-liab-acq-fs-rev.pdf
Case Studies
Jeannette, Westmoreland County
• Former hospital property; closed in 2006
• Acquired by land bank at judicial sale in 2014 for $15,127
• Property has been torn down and site improvements are being undertaken
Jeannette, Westmoreland County• Property was an eye sore
along Route 30 and was a target for thieves, vandals and arsonists
• The land bank contracted with Westmoreland IDA to handle demolition and clean-up
• Environmental conditions included asbestos and medical waste
Jeannette, Westmoreland County• Environmental
conditions included asbestos and medical waste
• $1.1 million demolition contract
• Demolition completed in April 2016
• IDA is handling the marketing of the property
Easton, Northampton County• Former manufacturing
building• Sold at Sheriff’s sale for
$1,560• Buyer appears to be
reputable• Land bank could have
purchased at Sheriff’s sale and developed RFP to vet reputable buyers
Easton, Northampton County
• Proximate to school and residential neighborhood so redevelopment of property plan for redevelop is critical to mitigate any negative impacts
• Vertical growing operation planned
Mahanoy City, Schuylkill County• Community is served by
Schuylkill Land Bank• Property purchased by
Borough from county repository
• Former brewery-long term vacant
• Borough received a grant from PA DCED for demolition
Mount Carmel, Northumberland County• Former Pepsi Plant• 15,500 square feet• Community is served by
Northumberland Land Bank
Mount Carmel,Northumberland County
• Long term vacant• Located in residential
neighborhood and near schools
Kulpmont Borough, Northumberland County
• Former seed packaging building
• 210,000 square feet; 4 acres
• Long term vacant• Located on Route 61
Suffolk County Land Bank(Long Island, NY)
• Focused exclusively on tax-delinquent brownfield sites and zombie foreclosures
• Eastern half of Long Island• Population 1.5 million• Bedroom communities, mostly suburban• Identified +130 tax-delinquent brownfield sites that
were difficult to redevelop due to state and local tax laws
Suffolk County Land Bank(Long Island, NY)
• RFP issued for the redevelopment of 8 tax-delinquent brownfield sites in Jan. 2016
• Decided to proceed with 4 of the sites
• Actively negotiating with 4 developers
Former Liberty Industrial Finishing site in Brentwood, NY, seen in 2000 (Photo credit: Newsday)
Suffolk County Land Bank(Long Island, NY)
• Agreement with NYSDEC and NYS Oil Spill Fund - ready to be signed
• Clears cleanup liens• Costs paid
proportionally from the net proceeds of the sale
• Covenant not to sue• Buyer enters remedial
program determined by NYSDECFormer Jericho Marine site in Babylon, NY, seen in
2013 (Photo credit: Lindenhurst Patch)
Other States Programs
Michigan Oregon Washington Connecticut
Conclusions Land banks can add value in redeveloping brownfields sites for
economic development purposes especially in those situations where properties may be scooped up by speculators.
Objective is to maximize and combine brownfields and land bank activities as powerful redevelopment tools
Leadership is critical! Partnerships matter: Bring all the stakeholders together
including school districts and tax claim bureau director as well as code enforcement and community development and economic development staff.
Messaging is important: The land bank is not being formed to squeeze out private sector investment but to create opportunities for that investment
Questions?
Contact Information
Winnie [email protected] or 267-788-1651
Chris [email protected] or 717-580-0439