Altoona investigating land banking

The Altoona Redevelopment Authority is checking out the pros and cons of creating a land bank to eliminate liens and clear titles on vacant, abandoned, tax-delinquent and foreclosed properties to spur development.

Land banking – recommended in the city’s proposed new comprehensive plan and its Act 47 financial recovery plan – has helped pave the way for projects in big cities like Philadelphia, Cleveland, Detroit and Flint, Mich., where there are big swaths of blighted properties and vacant ground, according to Planning Director Lee Slusser, who’s doing the analysis.

But it’s not clear whether it will help much here, because – as former Planning Director Larry Carter liked to say – the blight is spotty like measles.

“We have been tremendously unsuccessful in doing [the equivalent of land banking] in the past,” said City Manager Joe Weakland, citing land collected along 10th Avenue for a never-done extension of 10th Avenue Expressway; in East Juniata, where there’s been only occasional development of individual homes; and at Cricket Knoll, where lots of ground remains.

But it might work better now, given that Act 153 of 2012 allows for creation of local agencies to handle the job, with powers that were not previously available to municipalities, Weakland acknowledged.

Don Devorris, chairman of the authority, is also unsold, for now.

“The last thing we need is more bureaucracy and more committees, unless there is a real advantage,” Devorris said.

Slusser plans to find how many tax delinquent and foreclosed properties there are in the city and how much demand there is for land.

The city would need the approval of the Altoona Area School District and Blair County – the other property taxing bodies – because they have an interest in the tax liens the land bank would wipe away, Slusser said.

All three taxing bodies would be sacrificing 50 percent of any taxes that accrue for the first five years after purchase by a new owner, as that money would go to support the land bank.

“But 50 percent of something is better than 50 percent of nothing,” Slusser said.

The current system by which the county handles tax delinquent properties – “upset” sale, judicial sale, then placement in the “repository” – results in the elimination of tax liens in three years, Slusser said.

Having a land bank could shorten that period.

Land banks don’t wipe out liens placed by the Internal Revenue Service, Slusser said.

Unlike redevelopment authorities, land banks can’t take property by eminent domain, Slusser said.

Like redevelopment authorities, however, they can sell property to whomever they choose, without having to put them up for bid publicly, and can put conditions on sales, Slusser said.

That gives them discretion to pick developers and encourage projects likely to benefit the public and avoid developers likely to fail and undesirable projects, according to Slusser.

Land banks “set priorities for the reuse of land” and “bring transparency, efficiency and predictability to land recycling,” according to the Housing Alliance of Pennsylvania’s Quick Guide: New Tools to Address Blight and Abandonment.

“Without land banks in place, tax delinquent properties are exposed at public auction to be sold to the highest bidder, without regard to his or her capacity for development or impact of the sale on the adjacent properties or community,” the guide states. “Or they continue to sit in limbo without a buyer amassing debt and further harming the community.”

Ultimately, the most common buyers of property that may come through the land bank could be homeowners wanting additions to side yards, Slusser said.

City Council would need to create the land bank by ordinance, Slusser said.

Even if it doesn’t work out, “it’s always fun looking at new tools,” Slusser said.

Mirror Staff Writer William Kibler is at 949-7038.