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Bill giving KC authority to set up land bank awaits Nixon's signature

There are neighborhoods in Rep. Gail McCann Beatty’s district where nearly every block has a dozen or more vacant properties.

“And it’s block after block after block,” said Beatty, a Kansas City Democrat.

Those who have decided to remain have watched property values plummet while crime soars.

“We have to find a solution because there are good people living in these neighborhoods watching everything around them fall apart,” Beatty said.

She’s hopeful the Missouri General Assembly took a first step toward that solution Thursday with the passage of legislation giving Kansas City the authority to establish a land bank.

And Beatty is not alone. Mayor Sly James called the land bank “game-changing legislation to combat Kansas City neighborhood erosion.” Lawmakers who worked for months to steer the bill through a skeptical legislature said it could have long-term implications.

“I think this is the biggest legislative victory for Kansas City so far this year, and I think it’s a huge one,” said Rep. John Rizzo, a Kansas City Democrat whose district also struggles with abandoned properties.

The legislation now goes to Gov. Jay Nixon, a Democrat. If he signs it, the city would have to pass its own ordinance to create the land bank, which would be governed by a five-member board and subject to Missouri open meetings and records laws.

The land bank would have authority to acquire vacant properties and set them aside for rehab or resale so they could be put back on the tax rolls. With approval of the city, the land bank also would have authority to borrow money and issue bonds, but would not have the power of eminent domain. It would be prohibited from selling more than five contiguous parcels to the same entity.

A study last year by the Federal Reserve Bank of Kansas City found that there were 12,000 vacant residential properties in the city. In some areas, the vacancy rate ranged as high as 25 percent. Upkeep and maintenance on vacant property cost the city about $1 million a year.

According to a 2001 study by Temple University, houses within 150 feet of a vacant or abandoned property experienced an average net loss of $7,627 in value. But Rizzo said the impact goes beyond property values.

“These abandoned properties foster blight, which fosters crime, which fosters just a bad environment altogether,” he said.

Currently, properties that are in such a state of disrepair that they go unsold at tax sale auctions are turned over to the Land Trust of Jackson County. But the trust has no budget to maintain or fix properties and only has the authority to sell them to private investors willing to pay at least two-thirds of their value.

“I know from my time in Jackson County government that the land trust is broken,” said Senate Minority Leader Victor Callahan, an Independence Democrat. “What we came up with is a very transparent way to handle blighted property while still protecting property owner rights.”

So far this year, he said, the Land Trust has added 725 properties to its inventory but only sold 24. Of the more than 3,000 properties in Land Trust, about 60 percent have been held for more than a decade.

“The whole goal of the land bank is to get those properties out of the government’s hands and back into private ownership,” Callahan noted.

In addition to receiving tax-foreclosed properties that do not sell at auction, the land bank would have the ability to bid on properties that are located within low to moderate-income areas. Banks or mortgage companies could also donate foreclosed properties.

The key to the success of the land bank is its ability to strategically plan how vacant properties could be put back into use, said Ashley Jones-Wisner, director of state policy for Greater Kansas City Local Initiatives Support Corp., a nonprofit that helps distressed neighborhoods.

Some homes could be fixed up and sold. The worst could be demolished, with the land sold to nearby homeowners or developers. Some vacant properties could become community gardens or parks.

“The city would finally have the power to identify how properties could be best used to benefit the entire community,” Jones-Wisner said.

However, one critic of land banks is Audrey Spalding, a policy analyst for the conservative think tank the Show-Me Institute. She contends proponents of the land bank have not proved that it would do a better job than the current system. She pointed to an earlier version of the land bank started in St. Louis in the 1970s that she called “an abysmal failure.”

Although a supporter, Beatty also has concerns. She worries land bank officials may focus too much on the demolition instead of rehabilitation of blighted properties.

“Creating a million vacant lots is not the answer,” she said. “I think we create a whole new issue if we take the position of, ‘let’s just go and start tearing all these properties down.’ We need to focus on building up a neighborhood before we turn to properties that need to be torn down.”

Despite such reservations, Beatty voted for the land bank because of its potential to help turn around parts of the city that are in trouble. “I’m very optimistic this can be a tool that helps promote home ownership in these neighborhoods,” she said.

Republican Rep. Noel Torpey of Independence, who sponsored the land bank bill and was its biggest proponent, said the idea’s success will be determined by the involvement of the community.

“This is about local control,” Torpey said. “The land bank gives local control to Kansas City and Jackson County to help fight a real problem of blighted properties that are ruining neighborhoods.”

Meanwhile, Delores Johnson, president of the Vineyard Neighborhood Association, hailed the news Thursday of the land bank’s passage. Her neighborhood, where she has lived since 1965, has been plagued by vacant and abandoned properties.

But with some help, revitalization is possible.

“Two new homes were just built (in the neighborhood), and there are folks moving in this month,” Johnson said. “If we could get rid of some of these rundown, vacant homes, we could get more people interested in moving here.”