Types Of Properties Acquired – Under ORC Chapter 5722, which governs land reutilization programs, a political subdivision can acquire vacant lots or properties with structures that are unoccupied and deemed nonproductive. To acquire these properties, the tax foreclosure process must result in a property being offered for sale twice without an offer to purchase for the unpaid taxes. Because of those requirements, the types of properties acquired would typically include:

• Vacant lots with delinquent taxes in excess of property value
• Abandoned homes or commercial structures
• Environmentally distressed properties

Acquisition by the County through the Land Bank Program is the only way to eliminate the burden of delinquent real estate taxes that typically accompanies such properties and poses an independent obstacle preventing them from being returned to productive, tax-generating status.

Location of the Properties – The Land Bank Program is pursuing foreclosure of properties located in (1) townships and unincorporated areas; and (2) municipalities with their consent (under a recent amendment to ORC Chapter 5722 that we secured). The Treasurer’s office has already identified dozens of qualifying properties, which were removed from the Tax Lien Sale, and on which foreclosure proceedings have been instituted and are now well along. The Treasurer’s Office has also been coordinating with the City of Columbus’s Land Reutilization Office on its existing Land Bank Program, identifying and working to remove longstanding impediments to the success of that program, including dysfunctional aspects of the slow and cumbersome foreclosure process, and prior statutory constraints on the City undertaking any land banking outside the jurisdictional boundaries of the Columbus School District.

Disposition of Properties – The Treasurer’s Office has communicated with numerous non-profit groups interested in acquiring Land Bank properties, including Columbus Housing Partnership, Miracet, and the Columbus Franklin County Affordable Housing Trust. We know from our coordination with the Columbus Land Reutilization Office that others, such as Habitat for Humanity, Homes on the Hill, and various community development corporations and neighborhood groups, are also interested in acquiring Land Bank properties. We also have come to understand that local governments, including townships, cities, and school districts – as well as community and charitable groups – would like to consider whether they themselves are potential targets for disposition of certain properties for public uses. In addition, the CIC appears to be an appropriate vehicle to assist suburban municipalities, which lack Columbus’ staffing and resources, to proceed with application for state funding to clean up environmentally distressed properties, such as the Bedford Landfill in Gahanna (which has been slowed by a large amount of delinquent taxes on the property that can only be removed through the Land Bank Program).

Essential Advantages of the Community Improvement Corporation – After much research, consideration, and discussion, the Treasurer’s Office has determined that establishing a new Community Improvement Corporation (CIC) dedicated to Land Bank properties is the most prudent method of handling the maintenance and disposition of the properties that are acquired. ORC Chapter 1724 governs CICs, and section 1724.02 addresses the general operation of a CIC and its authority to acquire and dispose of real estate. The primary advantage of this approach is that the CIC can serve as an entity to hold, maintain, and dispose of properties rather than Franklin County taking on those responsibilities directly. The intent is to transfer all Land Bank properties from the County to the CIC immediately, which presents two key advantages. First, it relieves the County of the burden and expense of having to hold and maintain the property itself. Second, it eliminates any potential liability of the County relating to the property, including environmental liability. The CIC would also provide greater flexibility in formulating disposition strategies for vacant or abandoned commercial or industrial properties.

Division of Labor – The Treasurer would continue to coordinate the Land Bank Program pursuant to Resolution 1030-03 approved previously by the Commissioners. The Treasurer’s staff would continue to shoulder nearly all of the pre-acquisition work necessary to identify prospective Land Bank properties and to coordinate with the Prosecutor’s Office on all foreclosure and property transfer matters. This responsibility flows naturally from the Treasurer’s statutory responsibility and familiarity with the tax delinquency issues and the foreclosure processes, as well as the close interrelation of the Land Bank Program with the tax lien certificate sale process. The Treasurer’s Office will also continue to consult with the County’s Community & Economic Development staff, as we have been doing to date.

Appointment of Trustees – The appointment of trustees to operate the CIC is intended to reflect and engage the interests of all primary stakeholders in the land reutilization process. The Treasurer will appoint one trustee of the CIC, who would likely be the coordinator of the tax lien sale program. The Commissioners will appoint one trustee, who would likely be a representative of the County’s Community & Economic Development Department. To round out involvement by the primary stakeholders we have already been working with throughout the County on the Land Bank Program, the incorporating documents provide for one trustee to be appointed by the Mayor of Columbus, to represent the City’s interests; one trustee to be appointed by the President of the Franklin County Township Association, to represent the interests of the townships and villages; and one trustee to be appointed by the other four trustees, who would likely represent the interests of the suburban cities other than Columbus.

Operation of the CIC – Because the CIC is anticipated to commence and operate as a volunteer organization, the Treasurer’s staff will continue to shoulder the burden of most administrative responsibilities. There are several other key points. First, the proposed Resolution is careful not to create any agency relationship between the County and the CIC. That option is available under ORC Chapter 1724, but going that route would undermine many of the advantages of the CIC framework and would leave the County no better off than if it were to hold, maintain, and dispose of these properties directly. Second, the incorporating documents provide that the CIC would operate pursuant to Ohio’s open meetings laws, which allow for the body to go into executive session only for certain defined matters. Third, the incorporating documents specify that each appointing authority – including both the Commissioners and the Treasurer – would have the right at any time, upon demand, to inspect the documents and finances of the CIC.

No Appropriation Requested – Throughout the process of developing the Land Bank Program, one of the guiding considerations has been to minimize the financial and staffing impact on the County. Keeping most of the administrative burden within the Treasurer’s office was contemplated in recognition of the County’s tight financial situation, in order to prevent this Treasurer initiative from burdening the personnel resources of other county agencies. In keeping with this approach, no appropriation is being requested from the County for the CIC.