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City interest high in Land Bank concept

By DARREL RADFORD - dradford@thecouriertimes.com

New Castle city officials are literally banking on a new strategy to combat blight in local neighborhoods and beautify the town at the same time.

All too often, neglected properties go up for tax sale and out-of-state buyers who have never set foot in New Castle buy them without really seeing what they’re getting. And all too often, when they find out, they abandon them all over again, sending the property back to yet another tax sale.

At the most recent City Council meeting, members learned of and embraced the concept of a Land Bank.

Land Banks, made possible by Senate Enrolled Act 232 of the 119th Indiana General Assembly, are designed to help communities acquire tax delinquent or other problematic properties in hopes of getting other local organizations or citizens involved in improving them and ultimately getting them back on the tax rolls.

Mayor Greg York said the land bank concept would allow the city some measure of control with what happens to vacant or dilapidated properties, something that all too frequently is elusive under current practices.

“The city does not intend to get into the real estate business,” York said. “The frustrating thing is the county -- which every county has done -- has started an online tax sale and people from California to Canada can see a property that’s half an acre, and there is a dwelling on it, and the taxes on it are $450. And they get on Google Earth and there’s a picture from 10 years ago, which is exactly what happened on 25th Street where the Firestone building was. They thought there was a building standing there when they bought that property.

“When they see they’re not going to get their money out of it, they don’t pay their portion and the property goes right back in the tax sale a year later, so it ties our hands repeatedly,” York said. “What this allows us to do is take ownership of it from the start and sell it to a local investor who wants to rehab the house or a group that wants to demo the property. It gives us control instead of somebody taking it that we have no control over.

“It’s not for us to get rich and make money on, but it’s for us to be able to control what happens to these properties,” York concluded.

The land bank ordinance, enthusiastically passed on first reading, would consist of a nine-member board with three appointed by the mayor, three by the City Council and one by the County Treasurer -- all of whom must be city residents. Two additional members with no city residence requirements will be appointed by the seven directors who live in the city.

The Land Bank will give city officials lots of options it hasn’t had before, according to City Attorney David Copenhaver.

“The City has acquired properties in various ways over the years that they may wish to put in the land bank,” Copenhaver said. “Where the land banks have become most successful is when they target an area that is in a neighborhood in decline and having a number of vacant homes, then cluster them and try to sell those lots to a developer who would then try to improve that neighborhood.”

Copenhaver emphasized the ordinance had no funding with it.

“This just sets up the framework,” he said to council members. “You would have to set up a funding mechanism in an upcoming budget.”

“Hopefully, this will fund itself,” Clerk-Treasurer Christy York said. “It will be its own fund, similar to a non-reverting fund.”

Councilman Jerry Walden also praised the GIS Coordinator Ed Hill’s efforts at getting properties located in the local Blight Elimination Program. Walden said creating land bank will hopefully make it that job easier. 

“This is a positive step to planning, which historically we haven’t been great at,” Councilman Aaron Dicken agreed. “As far as planning, this is huge. This gives us the chance to have something positive happen where the majority of the time something negative is happening.”

Dicken said the land bank would also benefit from the partnership with the Chamber of Commerce and the county’s economic development corporation (EDC). The organizations could either put out requests for proposals for certain businesses the city would like to see in the community or, when somebody comes knocking at the door, they’d be able to show a portfolio of some options.

“We already own a bunch of properties, but we don’t have them in an condensed package where a group of people can market those properties,” Copenhaver said. “Sometimes we even forget what we own.”

Hope Initiative and Healthy Communities have taken problem properties and improved them in the past.

“There are properties we’ve already acquired that we may try to put in the land bank,” Copenhaver said.

“I’d like to thank everybody involved with this land bank, the great job they did and the time they spent,” Councilman Jeff Hancock said.

Second reading of the land bank ordinance is scheduled at the council’s Monday, Feb. 4 meeting.