Allegheny County could seek refuge in land bank deal
The fronts of several buildings along St. Clair Avenue in Clairton are boarded up.
There are broken windows and graffiti.
And along James Street in Turtle Creek there are vacant homes with several years of taxes owed.
The properties look forgotten, but a land bank taking shape in Allegheny County through the Tri-COG Land Bank, has its eye on them as potential acquisitions.
“Right now, I'm positive on it,” said Sam DeMarco, a Republican councilman from North Fayette. “I like the idea. We need to do something to try to help with the blight that we are experiencing in our communities.”
Allegheny County Council is considering joining the land bank, a make-or-break step in its formation. State law requires the land bank to have the county's blessing to exist.
The Allegheny County Council Economic Development and Housing Committee voted Wednesday evening to send the land bank legislation to the full council with an affirmative recommendation. The full council could take a final vote on the measure as soon as Tuesday.
A land bank works to acquire blighted properties, clear delinquent taxes and liens and fix them with the goal of returning properties to the tax rolls.
Allegheny County Executive Rich Fitzgerald introduced legislation to council to join the land bank. The legislation would commit the county, as it does any municipality or school district that joins, to contribute 5 percent of delinquent taxes collected from properties in the bank's jurisdiction and 50 percent of the property taxes collected for the first five years a land bank property returns to the tax rolls.
Based on the current footprint of the land bank — four school districts and 11 municipalities have joined — the county would have paid $9,000 to the land bank based on delinquent taxes for 2014 collected in 2015, said Amie Downs, a spokeswoman for the county.
“We wanted the contribution to be adequate to provide some operating capital for the land bank, but we didn't want them to be extraordinarily high so it would be cost prohibitive to participate,” said An Lewis, executive director of the Steel Rivers Council of Governments.
Other land banks in the state rely on the 50 percent of property taxes for five years, but the 5 percent of delinquent taxes is unique, Lewis said. The Tri-COG Collaborative, a collection of 39 municipalities that developed the land bank, modeled its funding after a land bank in Cuyahoga County, Ohio.
The land bank is hoping foundations in the county will kick in $1.5 million during the first three years.
DeMarco and DeWitt Walton, a Hill District Democrat and chair of the county committee considering the land bank proposal, said it's a reasonable cost to the county. Both said there appears to be bipartisan support for the land bank.
The land bank cannot use eminent domain to acquire properties. It will have priority to underbid and win properties at sheriff sales.
Lewis said priority at sheriff sales was written into the state legislation to give municipalities confidence in finding a buyer, the land bank, if they take a property to a sheriff sale, which can cost $5,000.
“It's going to be unlikely that the land bank is going to go toe-to-toe with a good investor,” Lewis said about concerns that land banks could snatch up all the desirable properties at sheriff sales. “If those taxing jurisdiction did not have some kind of certainty that there would be a buyer at the end of the day, there would be no incentive to move those properties to sale because it costs them money.”
Pennsylvania, which passed legislation in 2012 allowing land banks, has 11. Pittsburgh established a land bank in 2014, but it has yet to take action on any properties. Westmoreland County enacted its land bank at the end of 2013. Its website shows 18 properties sold and 18 ready for sale. Washington County created its land bank in April.
