In today’s Dayton Daily News we get to read about the “land bank” and how the city is wiping the debts off some sites that they’ve decided were over-encumbered by tax debt and making them available for development:
The targeted properties include:
• The former Dayton Electro Plate Inc., 1030 Valley Street;
• Rita Construction, 824 Leo Street; and
• the MPT Real Estate building, 1801 Home Ave.
These properties were selected for the land bank because a developer, with a successful track record in Dayton, sees their potential, said Aaron Sorrell, the city’s director of planning and community development.
“We were looking for high-profile properties, with owners who had walked away,” Sorrell said. “All the properties have brownfield issues.”
The land bank, a project initiated by Montgomery County Treasurer Carolyn Rice, is a non-profit, public corporation created to acquire low-value properties from foreclosures, lending institutions, and private individuals and sell them to organizations that aim to redevelop the community.
Once in the land bank, property taxes and deeds are cleared prior to being released to a developer.
“Our goal is to quickly turn the properties around to new owners,” said Paul Robinson, Montgomery County’s deputy treasurer, adding that this could mean within a few days.
The Dayton City Commission today will hear a first reading on a memorandum of understanding with the land bank to establish a procedure for acquiring properties. If approved, the land bank board will vote on the agreement on Feb. 21.
Then on March 9, the Montgomery County Board of Revision will preside over the tax foreclosure cases on the targeted properties and assess if they are truly abandoned.
If the Board of Revision finds in favor of transferring the property to the land bank, there is a 45-day waiting period.
Mike Heitz, managing partner for Garrett LLC, based in Lexington, Ky., said that if the three properties are land-banked, he’s committed to taking them on. The company has given the city of Dayton a $500 deposit for each property that will go toward expenses incurred during the process.
Garrett LLC — responsible for the transformation of the former Howard Paper Company site at 354 S. Edwin C. Moses Blvd., in Dayton, which is now for sale — specializes in acquisition and clean-up of brownfield properties.
• The Dayton Electro Plate Inc. property has been vacant for 16 years and currently has a delinquent tax balance of $564,246, according to the Montgomery County Treasurer’s Office. The assessed value of the property is $734,557.
The site was used since 1924 for coating metals with rustproofing materials by an electroplating process. In April 1996, the company ceased operations prior to petitioning for Chapter 7 bankruptcy.
Later that year, the Ohio EPA conducted an emergency removal action at the site due to risk posed to both the local population and the environment by the chemicals remaining on-site.
Heitz said he plans to demolish both the Dayton Electro Plant building and Rita Construction.
• Rita Construction, a large warehouse on Leo Street, was certified delinquent in 2009 and $168,824 in back taxes are owed. The property is valued at about $1.3 million.
• Heitz said the Home Avenue building will be renovated and a potential tenant/owner has been identified. That site was certified delinquent in 2009 and $160,786 in back taxes are owed. The building has an assessed value of $643,740.
“This is about putting properties back into productive use,” Dayton City Commissioner Nan Whaley said. “These are community properties that need to not just be sitting.”
Now, please read between the lines and let’s compare and contrast some other deals- and think about what’s happening here.
Ostensibly, the reason development hasn’t taken place is a combination of the fact that these sites are polluted and carry liabilities. The company has gone bankrupt- and there is no way that any sane individual would take a risk on them- there are also heavy back taxes on the “worthless property.”
Isn’t this a little like the Arcade? The liabilities on the property are great- partially because of its historic status which adds additional costs to development. Yet, the developers who jumped in to try to save it- had to pay the back taxes and are continuing to struggle to pay current taxes on a property that no one else has the balls to touch. Why aren’t they given this kind of clean slate deal? Is it because they aren’t a “most favored developer.”
We have another developer in town who has the taxpayers fund a very expensive highway interchange, which feeds some prime property he cornered a long time ago. He then moves a company with a brand new HQ that the taxpayers subsidized a half mile down the road to his new development- and then gets to take all his property taxes and reinvest them on his project (despite the fact that the Miami Valley Regional Planning Commission MVRPC- says we’re already over-built and market saturated in the kind of buildings he’s throwing up).
Then we have the University of Dayton first buying up NCR property which takes much of it off the property tax rolls because they are a non-profit educational institution- and then, they start developing office space for one of the biggest companies in the world, GE, which also gets to skip paying property tax for 30 years.
In this example, we have the city clearing the liens on three properties for a guy who is putting down $1,500 to be handed property on the books at almost $2.6 million. Quite a deal. No auction on these properties, no marketing of them- nope, we found a friend and we’re going to hand the properties over without letting anyone else have a shot.
I could bring up the IRG deal for the Emery/UPS facility at the airport- but, that one is such a HUGE rip-off of the taxpayers, it makes me too mad to delve back in. You can go read the old posts and figure it out for yourself.
Anywhere else, public scrutiny would stop this kind of “most favored developer” status and these funky deals that aren’t open for competition, but in Dayton, this is business as usual.
Keep your head down and carry on.