REVITALIZING NEIGHBORHOODS: Tools for Local OfficialsLAND BANK AUTHORITIES IN GEORGIA

Presented by Mara Register,Public Service Assistant

Carl Vinson Institute of Governmentand Alison Souther Goldey,

Executive DirectorMacon-Bibb County Land Bank Authority, Inc.

Background on Previous Law on Land Bank Authorities (LBAs)

• Original legislation was passed in 1991 by the General Assembly

• From 1991 until 2012, thirteen LBAs were created in Georgia

• Senate Bill 284 amending Chapter 4 of Title 48 of the O.C.G.A. was dropped at the end of the 2011 session by Senator Tim Golden and was approved by the House and Senate in 2012. SB 284 was signed by the Governor and became effective July 1, 2012

Purpose of Land Bank Authorities• Communities are adversely affected by dilapidated, abandoned, and tax delinquent

properties, including properties that have been abandoned due to mortgage foreclosure

• These properties impose significant costs on neighborhoods and communities by lowering property values, and increasing public costs and decreasing tax revenues

• LBAs are one of the tools to facilitate the return of dilapidated, abandoned, and tax delinquent properties to productive use

• LBAs are able to extinguish outstanding property taxes, interest and penalties and then work to convert these properties into productive use

• These redevelopment projects create jobs, enhance property values, stabilize neighborhoods and reduce crime

• LBAs do not have the power of eminent domain• They acquire property through tax sales, market purchase or donation• Much of the property they acquire has a lower fair market value than the taxes,

penalties and interest outstanding

I. Legal Basis – O.C.G.A. 48-4-100

• ….to provide for the creation, existence, and board membership of land banks; to provide for land bank powers, including those powers related to the acquisition and disposition of tax delinquent and other properties; to provide for financing of land banks; to provide for public meetings of land banks, for the adoption of rules and regulations to address potential conflicts of interest, and for the dissolution of land banks; to provide an effective date; to repeal conflicting laws; and for other purposes.

II. Administrative Steps Any county, municipal corporation, or consolidated government may

elect to create a land bank by the adoption of a local law, ordinance or resolution

Instrument must specify the name of the land bank Instrument must include the number of board members, which must be

an odd number and be not less than 5 and nor more than 11 Instrument must specify the initial individuals to serve as board

members and their terms Instrument must specify the qualifications, manner of selection or

appointment, and the terms of office of board members• A land bank shall maintain all of its real property in accordance with the

laws and ordinances of the jurisdiction in which the real property is located

Administrative Steps (Continued)• Intergovernmental Contract must also be executed and may be

done by any of the following and any combination of the following methods:– A county or one or more municipal corporations located wholly or partially within

the county– Two or more counties and one or more municipal corporations located wholly or

partially within the boundaries of each county (regional LBAs)– A consolidated government and one or more municipal corporations located wholly

or partially within the same county as the consolidated government

A school district may participate in a land bank pursuant to an intergovernmental contract provided such contract specifies any members of the board of education serving on the board of the land bank and any actions of the land bank which are subject to approval by the board of education

III. Board CompositionAn elected member or staff of a participating municipal

corporation or county may serve as a board memberA tax commissioner or tax collector may serve as an ex-

officio member of the land bank boardBoard shall select annually from among themselves a

chairperson, vice chairperson, secretary, treasurer, and other such officers deemed necessary

Authority is subject to the Open Meetings and Open Records laws

Authority may employ its own staff or may utilize employees of the participating governments

IV. Land Bank Powers• A land bank is a public body• It may acquire property by purchase, lease or otherwise and dispose

of real or personal property of every kind and character in furtherance of the public purpose of land banks

• It may acquire, accept, or retain equitable interests, security interest or other interest in any real property, personal property or fixtures

• It may borrow from private lenders, municipal corporations, counties or consolidated governments, from the state or from federal government funds, as may be necessary

• It may apply for loans or grants from all levels of government or from any other source, public or private

• It may enter into partnerships, joint ventures and other collaborative relationships with public and private entities for the ownership, management, development and disposition of real property

V. Acquisition of Property Tax Sale - the land bank may tender a bid at an amount equal to the total

amount of all tax liens which were the basis of the execution. If there are third parties who bid and the land bank tenders the highest bid, the land bank shall pay the full amount of the bid tendered in order to obtain the parcel

Court Ordered Sale – the land bank may tender a bid in an amount equal to the total amount of all tax liens which were the basis of the judgment and any accrued interest, penalties and costs. If there are third parties who bid and the land bank tenders the highest bid, the land bank shall pay the full amount of the bid tendered in order to obtain the parcel

Subject to the statutory redemption period, the land bank shall have an absolute title to the property sold, free and discharged of all tax and municipal claims, liens, mortgages, charges, and estates of whatsoever kind.

V. Acquisition and Disposal of Property

The land bank has the authority, by resolution of the board, to discharge and extinguish any and all liens or claims for real property taxes owed to one or more of the land bank members or governmental entity that has an intergovernmental agreement with the land bank

The land bank must notify the school district whenever property is acquired and is encumbered with a lien of taxes due the school district of the intent to extinguish all such liens. The school district has thirty days to object in written form

Up to 75% of taxes collected shall be remitted to the land bank commencing with the first taxable year following the date of conveyance and shall continue for a period of five years

V. Acquisition and Disposal of Property (Cont.)

Allocation of land bank proceeds:• Land bank operations• Recovery of land bank expenses• Distribution to the participating jurisdictions and

school board in proportion to their respective tax bills and costs

Authority has full discretion in determining sale price of property

V. Disposal of Property and Disposition Hierarchy

Property disposition must be outlined in the resolution or intergovernmental contract• Use for purely public spaces and places• Use for affordable housing• Use for retail, commercial and industrial activities• Use as conservation areas• Use for land trusts or for other public entities• Such other uses as determined by the board of

directors

VI. The Valdosta Story• Valdosta-Lowndes County LBA was created in 1999 through the

adoption of the required Local Resolution of participating governments and the Intergovernmental Agreement between the City of Valdosta and Lowndes County

• Original property disposition priorities were as follows: 1) non-profits developing affordable housing; 2) for profit entities developing affordable housing and 3) economic development projects creating jobs

• Acquisition and disposition of property to Habitat for Humanity• Vehicle for acquiring and disposing of vacant and/or tax

delinquent properties for in-fill development• $300,000 Local Assistance Grant for Authority start-up costs

Fellowship Place Subdivision and Community Park Project Structure

1999 CHIP Grant used for down payment assistance

Structured as a second mortgage in the form of a Deferred Payment Loan (DPL)

Acquired the property and $30,000 price used as additional grant leverage

Construction costs and value of volunteer hours also used as grant leverage

Fellowship Place Subdivision and Community Park Project Structure

Properties deeded to HabitatEasy Living Designs adaptedTotal of twelve new first time homebuyersLocal Development Fund used to construct

park on adjacent abandoned railroad right-of-way

2001 Magnolia award winner from DCA

Fellowship Place Subdivision and Community Park

Fellowship Park

Cypress Street and Short Street Historic Districts Project Structure

2001 CHIP Grant & 2001 SHOP GrantInvolved 13 In-fill Properties with Substandard

Structures with utilities in placeCity funded demolition and clearance of

structuresCHIP funds used again as a DPL & SHOP Grant

used to acquire properties.

Cypress Street and Short Street Historic Districts Project Structure

New designs and materials approved by the Historic Preservation Commission

Habitat for Humanity constructed the homesEstablished new Demolition Policy for

property donation to the Land Bank Authority or other non-profits that builds affordable housing

Short Street Historic District

Cypress Street (Before)

Cypress Street (After)

Jimmy Carter Work Project 2003

Property Donated by the JN Bray Company for a Fifty Lot Subdivision

Funding Structure- $800,000 CDBG, $300,000 CHIP, $500,000 Habitat Mortgage Buyback, SPLOST Funds, Habitat Volunteer Construction

Funds Utilized to construct sewer outfall, infrastructure, lot preparation, and down payment assistance.

Jimmy Carter Work Project 2003

Five lots acquired by the Land Bank Authority for Road Right-of-Way and Housing Construction

Two lots deeded to the City and three lots sold to Habitat with a 10-year repayment period

2004 Magnolia Award Winner Presented by DCA

2005 Terrence DuVernay Award Winner Presented by NCDA

2003 Jimmy Carter Work ProjectJune 6, 2003

2003 Jimmy Carter Work ProjectJune 12, 2003

2003 Jimmy Carter Work ProjectAugust 21, 2003

VII. Acquisition for Industrial Expansion

Acquisition and Disposition for Community Facilities

• Authority acquired property from the City and deeded it to the Boys and Girls Club of Valdosta

• Property disposition allowed for expansion of the existing campus in the heart of the city

• Downtown Development Authority issued $3 million in revenue bonds for the project

• Boys and Girls Club leveraged additional funds through new market tax credits, SPLOST and private funding to complete the project

Additional Administrative WorkStaff has inventoried, assessed, and classified

all City propertyProperties that are appropriate for

development have been deeded to the Land Bank Authority

Property sales have been conductedStaff continues to review and acquire tax

delinquent properties primarily within the HUD Designated Revitalization Area

Thank you!

Mara Register, Public Service AssistantCarl Vinson Institute of Government

msregist@uga.edu(706) 524-9525 or (229) 251-6747