City and County Considering Land Bank Idea
Land Bank Update
August 6, 2015
Garden City and Finney County are considering creating a land bank to repurpose abandoned and vacant properties.
On Tuesday, Kaleb Kentner, Garden City’s planning and community development director, proposed establishing a land bank. Holcomb City Council members also were invited to the presentation, but none were present.
According to state statute, a land bank is an entity created by local government to “efficiently hold, manage and transform vacant, abandoned and tax-foreclosed property back into productive use.” It’s used as a way to put those properties back on the property tax roll.
The idea came about after a county tax sale in October in which 59 parcels of land that owed delinquent taxes were sold, generating $1,184,767.
The money was used to pay delinquent taxes on the parcels. Any excess money went back to the property owner, minus fees and interest.
At the tax sale, the county paid $332,354 by default for 28 parcels after no one bid on them.
On Thursday, Finney County Administrator Randy Partington said the county currently owns 29 properties that include homes, buildings, empty lots and unusable property, such as driveways and easements.
Kentner said a land bank would help alleviate the county’s role in maintaining that many properties until another tax sale was organized.
“I think that’s the issue right now that the county’s facing is having to maintain and take care of all those properties,” Kentner said.
Kentner said there is a cost to managing the properties and communities oftentimes end up getting caught with those costs. In a tax sale, some costs are paid while others may not be paid, depending on things like foreclosure.
“We don’t recoup any of those things, and we still have a problem of vacant lots or dilapidated properties that aren’t being productive. They’re not on the tax rolls. They’re not doing the community any good in those neighborhoods,” Kentner said.
A land bank could help expedite the process of getting those properties back on the tax roll.
With a land bank, a trust would be created and an appointed board would oversee properties acquired. While in the trust, a property would be exempt from property taxes, assessments, charges, penalties and interest. The only exception would be special assessments levied to finance public improvements.
The trust would take over the role of maintaining and taking care of those properties, Kentner said.
Residential, commercial and industrial properties could be eligible for the land bank.
There are legal requirements involved in establishing a land bank. According to an information packet Kentner provided to commissioners, the land bank must be governed by a non-compensated board of trustees; the board of trustees must keep accurate accounts of all receipts and disbursements; all records and accounts must be available for public inspection; and the land bank must make an annual report to the governing body, including an inventory of all property held by the land bank.
Kentner said the city and county commissioners could establish policies for the board of trustees to follow. Having a board that deals solely with those properties would help expedite the process of getting them back on the tax roll because that would be their sole responsibility, he said.
“The whole point of the land bank is to get the properties out of this stagnant state of nothing and bring them back into productivity, and adding to the values of … the neighborhoods,” Kentner said.
Kentner said several communities in the state, including Hutchinson, Greensburg and Junction City, have established land banks. Each one operates differently, based on that particular community’s needs.
Based on his research of other land banks, Kentner said, getting one fully operational and productive takes time, possibly several years.
“Once a land bank is established, it may take three or four years of collecting properties, purchasing foreclosed properties, before they actually start marketing any of those,” he said. “It’s a hodgepodge of properties all over, and they’re trying to understand how to get those properties into productivity.”
Kentner said he wanted to bring the topic to both commissions to gauge interest.
“I think it all just really depends on what you guys think is important and whether it’s a priority at this time or not,” he said.
No action was taken Tuesday, but planning and development staff will continue to research the idea and will present options and alternatives later for further consideration.
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