Developer Alert: Philadelphia Looking to Establish Land Bank Under New State Legislation

The redevelopment of vacant and blighted parcels has been a cumbersome, frustrating and, in many cases unsuccessful, process for municipalities and developers alike. Pennsylvania’s new land bank legislation could change all that. Philadelphia, with its own land bank legislation is poised to take advantage of the state legislation.

In October 2012, Governor Tom Corbett signed into law House Bill No 1682, enabling legislation, which opens the door for municipalities throughout the Commonwealth of Pennsylvania to establish land banks. Land banks create a vehicle to return vacant, abandoned or tax delinquent properties back to productive use. Over 75 municipalities throughout the United States have turned to land banks as means to battle blight, rebuild neighborhoods and spur economic growth.

Frequently, multiple agencies within a city, borough or township hold title to vacant, abandoned or tax delinquent properties, complicating procedures to deal with those parcels. In sharp contrast, a land bank serves as the central repository for such government-owned properties within its boundaries so as to better position them for redevelopment.

Once created by a municipality (or multiple municipalities) by ordinance, land banks are governmental entities. Land banks are governed by a board of between five and eleven members, at least one of which must be a non-municipal employed resident of the jurisdiction who is a member of a recognized civic association in the jurisdiction. Title to the properties is held in the name of the land bank, and the land bank must make its inventory of properties available for public review and inspection.

Among other things, land banks can:

  • Acquire, lease and sell properties for consideration in form and amount as it deems appropriate;
  • Accept transfers of properties from the municipalities, tax claim bureaus and redevelopment authorities within is geographic borders;
  • Design, demolish, construct, rehabilitate and improve real property;
  • Discharge tax liens and initiate expedited quiet title actions to make the properties more attractive to developers;
  • Issue bonds and borrow money from government and the private sector alike in order to pursue its mission;
  • Retain management companies;
  • Enter into partnerships and joint venture agreements with municipalities and private developers to own, manage, develop and dispose of property; and
  • Grant easements and licenses. Land banks do not, however, have the power of eminent domain.

The City of Philadelphia has taken the steps to establish its own land bank as a way of countering the more than 40,000 vacant parcels within its borders. Legislation co-sponsored by City Councilmembers Maria Quinones Sanchez, Bill Green and Bobby Henon was introduced in early 2012 to create the “Philadelphia Land Bank.” Proffered before HB 1682 was enacted, the City’s legislation, Bill No. 120052, is still in committee and will need to be conformed to the new state law.

As currently proposed, the Philadelphia land bank law would, among other things:

  • Create a land bank board consisting of seven members, at least three of whom would be representatives of housing or community development non-profits, or civic associations from low or moderate income neighborhoods;
  • Keep an up to date inventory of available property, a map of the locations of those properties, a map of other properties within the City reasonably known to be vacant and a record of the land bank’s conveyances;
  • Provide mechanisms for notice and an opportunity to comment to individuals and registered community organizations prior to the use or transfer of a land bank property;
  • Permit the land bank to discharge liens and other municipal claims, fines and other charges against its properties;
  • Allow individuals to make application seeking to have the land bank request that the City certifies certain properties for upset sale;
  • Allow the Councilperson within whose jurisdiction a property is located the opportunity to review and to approve or disapprove of a proposed transaction concerning that property; and
  • Permit the land bank to enforce conditions of a sale via mortgage, deed restriction or restrictive covenant.

We will continue to update this blog to track the status of the City’s land bank legislation as it makes its way through Council.

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