Rylee's to build on the West Side?

[GRDadof3]

This would be great (!) to see that old gas station out of there. I was just thinking recently that the area does not look great with multiple businesses closed. At least the new Subway looks halfway decent.

But what's with the West Side attitude against development, again?

http://www.grbj.com/GRBJ/ArticleArchive/2012/June/June+11/BUSINESSA+JOURNAL+REPORT+ON+WZZM+NEWS.htm

[x99]

This would be great (!) to see that old gas station out of there. I was just thinking recently that the area does not look great with multiple businesses closed. At least the new Subway looks halfway decent.

But what's with the West Side attitude against development, again?

http://www.grbj.com/...N WZZM NEWS.htm

The part that concerns me: "[T]he land bank will buy the West Fulton site for its back taxes..." They have apparently already inked a deal with Rylee's to do this. The gripe here, which I think is eminently reasonable, is that the government is basically picking winners and losers with this "land bank" authority: http://www.mlive.com/business/west-michigan/index.ssf/2012/05/city_commissioner_blasts_kent.html ... I could not agree more. Whoever had the brilliant idea of this "land bank" got it all wrong. It ought to be shut down, post haste. All they do is cherry pick properties, and cut the market out of the loop. It's disgusting what's going on here, really. It's already vacant--why not let it go to tax foreclosure and see what someone is willing to pay?

[GRDadof3]

The part that concerns me: "[T]he land bank will buy the West Fulton site for its back taxes..." They have apparently already inked a deal with Rylee's to do this. The gripe here, which I think is eminently reasonable, is that the government is basically picking winners and losers with this "land bank" authority: http://www.mlive.com/business/west-michigan/index.ssf/2012/05/city_commissioner_blasts_kent.html ... I could not agree more. Whoever had the brilliant idea of this "land bank" got it all wrong. It ought to be shut down, post haste. All they do is cherry pick properties, and cut the market out of the loop. It's disgusting what's going on here, really. It's already vacant--why not let it go to tax foreclosure and see what someone is willing to pay?

My guess is that whoever wants to buy it today would have to pay the market value, plus cleanup costs, plus the back taxes. Which makes the property unmarketable, and why it has sat vacant for so long.

I think the land bank is a great idea. I believe it helped get a contaminated property in Sparta cleaned up and now houses a new employer providing jobs.

It's not picking winning and losing businesses. This gas station property will be available for anyone to buy, even the hardware store family across the street. Property gets cleaned up. Win.

In most instances, an unfettered free market ends up being a detriment to society as a whole.

[joeDowntown]

Yeah, seems like a can of worms here. I hope Rylee's doesn't get scared off by the politics. It would be a great addition to the neighborhood.

Joe

[ModSquad]

X99-I have purposely not commented on Mlive related to this issue because I think that it is basically a cesspool and I do not like wading in cesspools

I willl, however respond to this issue and the way it has been reported and the way the West Side has responded on this forum, where I have been a member and often commentator for many years.

Here are the facts of the situation:

I was called to a meeting by the City's Economic Development Department to discuss the land bank potential being a part of helping clean up 1205 W Fulton, which everyone knows is an abandonded Clark Gas Station. When I got to the meeting I found out it was Rylees that was interested in the property. Rylees had been looking in the SWAN neighborhood for a while to find a spot for a small footprint neighborhood hardware store. They met with SWAN who was very helpful and supportive of the move. Rylees had an option on a site but wanted to pursue the 1205 site with the City and the Land Bank. All of this became public when the Land Bank issued its list of properties requesting to be withheld from the auction for redevelopment.

The owners of Navara Brothers (I think that is how it is spelled) pitched a fit and called Commissioner Gutowoski. He tried to get hold of me to ask me about it and called Jim Harger for my number. It was then that he gave the quote to Jim that the Land Bank was picking winners and losers. I called Walt the next day and met with him for two hours and he gained a full understanding of that had transpired and was supportive.

In the mean time, Navara Brothers continued to push the issue even though they had almost completely transitioned out of hardware and moved into appliances. They wanted a week to see if they could put a proposal together to open the hardware store and Walt got this for them by tabling it at the Brownfield meeting. I received a call yesterday that Navara Brothers is not submitting a proposal. At the SWAN meeting where Rylees presented their plan Navara Brothers shook hands with the Rylees folks and said, Welcome to the neighborhood.

Here is the reality of this tax foreclosed highly contaminated parcel. The gas company that owned it went bankrupt. Because of this there is no one the City, the DEQ, or EPA can go after for clean up of the site. This means if it went to auction it would be sold to the highest bidder for cash only. Based on evidence I have seen from the past several year's auctions, no one would have paid $66K for this site. It certainly would have gone to the second auction where the minmum bid is $1 and most likely sold for very little to a land speculator that would have purchased it and sat on it.

The home behind the development is also severly contaminated and the owner had to vacate it because of this. He could not sell his house. Rylees is also buying the house, razing it and cleaning up this site as well. In my opinion, and I believe I can prove this, Rylees did not get a sweetheart deal, rather they paid a premium for this site. They are going to put over $1Million into it and create neighborhood jobs.

Last, the Kent County Land Bank Authority does not make one penny of profit from this transaction other than a $1K processing fee to give them clear title pursuant to the bankruptcy. All in all I believe it is a Win Win Win

[ModSquad]

X99, after reading your comments one more time, I feel the need to say just a bit more about the Land Bank. I am the Executive Director. One of the arguments I most often hear is that the Land Bank has no right to "Cherry Pick" properties and that all should go to the auction. Those that make this argument often say, "let the market take care of these tax foreclosed properties." The general public has no idea what happens at the tax auction. If they did, there would be a loud cry to change the law and shut it down. There are two auctions. All that want to participate in the auction must pre-register and it is cash only. At the first auction the minimum bid is the price of taxes owed and then it goes up from there. Whatever does not sell at the first auction goes to the second auction which is called the "Distressed Auction" where the minimum bid is $1. Typically about 1/3rd to 1/2 of the properties sell at the first auction the rest go to the second auction. I am currently working on a report that correlates the properties purchased at the past 4 years' distressed auction in Grand Rapids and nuisance/code violations with the City. For example there is an investor that happens to live in Caledonia that has purchased properties at the distressed auction every year for the past 4 years. Last year he bought 12 properties and paid about $90K. Collectively this individual owns about 30 properties in Grand Rapids. He currently collectively owes Grand Rapids over $20K in fines and fees for nuisances on his properties. I had a rep at the last Distressed Auction to scope things out. He was sitting in front of 4 guys each with a breif case. My guy told these men that it was his first auction and asked if they had a strategy. They shared it with them. These guys told us that they have been going to this second auction for years. They usually quadruple their money and sometimes get a ten fold return. They study the properties available and only bid on homes that have families living in them and paying rent. They usually pay between $800 to $1500 per property. What they are buying is VERY blighted properties that are rented to folks that have no other place to live. They win their properties, go to the treasurers office and pay. They go to the Register of Deeds and file their deeds. Then they go to the home and sign a new lease with the renter. In each case these 4 guys do no improvements to the properties, and more important do not pay the taxes...allowing them to revert back to the County in three years. You do the math. They pay an average of $1,000. They collect $500 a month for 36 months or $18,000. Right now according to my calculations about 15% of the properties in the tax auction are repeat offenders like this. Sending tax foreclosed properties to the auction for cash to the highest bidder is not good for our neighborhoods, it is not good for the County, and it is not good for our real estate market. We need to find a way to get as many properties as possible into the hands of responsible investors that will do the right thing with the properties they purchase. Right now it is a free for all and the wrong buyers are dictating the terms.

[jas49503]

maybe the reason that the properties sell for so cheap and to such crappy owners is that nobody knows when these auctions occur. I never have seen a ad or announcement or flyer or any other form of marketing that would tell me when to go to bid on a distressed property. by limiting the attendance, you will naturally decrease the bids for the properties at auction. with regards to nusaince fees, I don't' know why the city doesn't do more to enforce these. not just for properties that sell at auctions but for all types of crappily maintained properties. I don't know what can be done but maybe it should be some sort of crime not to pay taxes with a jail term involved. maybe that would get some of the repeat offenders to pay their taxes.

[wingbert]

Thanks for clarifying the situation, lighthousedave. I always try to take the sensationalism with a grain of salt and assumed there was more to this story than what I was initially hearing.

[joeDowntown]

Thanks for the insight Dave! It's great to bring this to light. Let's pool our resources and buy some of these properties.

Joe

[x99]

Dave,

Thanks for your comments, which I really do appreciate (particularly those about the MLive cesspool). I'm well familiar with the tax foreclosure process, and agree that it is not particularly well designed. However, there are a lot of good investors--I know a few of them--that would like to buy the houses, fix them up, put good tenants in them, and sell the properties in a few years. I am aware of dozens of properties they have purchased which they have done very right by. While there are also bad apples out there--such as those you cite--there are a lot of good guys that the Land Bank cuts off.

I looked over your Polices and Procedures of January 26, 2011 (based on my rather cursory review of that document). The procedures appear to give priority to unoccupied properties which "are available for immediate occupancy without the need for substantial rehabilitation, and will generate operating resources for the functions of the Land Bank." Such premium properties would command a good price at auction, and likely bring more than the taxes due. To me, this strongly suggests that the very governing procedures of the KCLBA themselves promote so-called "cherry picking" in order to fund the other "missions" of the Land Bank.

Per your above comment, the "bad guys" are typically buying absolute trash with existing tenants, and playing a very clever numbers game (which, incidentally, does apparently put a roof over the head of someone who otherwise could not afford one). Taking your governing Policies at face value, "... the Treasurer shall give consideration to the following factors ... 3. Properties must not be occupied" [emphasis added]. As drafted, occupancy status is an absolute factor. You simply cannot acquire an occupied property and act within your guidelines. If you abide by these rules, and only buy unoccupied properties, how can you even hope to break the cycle of guys with briefcases and calculators? It simply cannot be done without inviting comments that the Land Bank operates outside of its designated bounds.

I can certainly understand your mission--and I agree with most of what you're trying to do here. Unfortunately, I think the way things have been set up (which is probably no fault of yours) leaves you open to very creditable allegations of cherry picking, favoritism, and backroom deals (which is why, as a general premise, quasi-governmental agencies performing traditional non-governmental functions tends be a hot potato/recipe for disaster/insert your favorite cliche here). Why is Rylee's willing to pay significantly more than this property is ostensibly worth? And why would they not snap it up at the auction for much less money? Why wouldn't you snap it up for less? Why not put the property on the market for $66k to anyone that will buy it, with a preference to anyone that wants to develop it, live in it, or rehab it? HUD, Fannie, and Freddie all have similar programs, which generally leave far less of a bad taste in the public's collective mouth. The beauty of an auction or an advertised sale for FMV is that it is at least transparent, which the government should be. The way that land bank authorities have been established and operated ensures that they are anything but, which is why people generally seem not to trust what you do one iota. If you can address that issue (and finally admit that you do not operate at no cost to the taxpayer), I think you'll enjoy much broader support.

X99, after reading your comments one more time, I feel the need to say just a bit more about the Land Bank. I am the Executive Director. One of the arguments I most often hear is that the Land Bank has no right to "Cherry Pick" properties and that all should go to the auction. Those that make this argument often say, "let the market take care of these tax foreclosed properties." The general public has no idea what happens at the tax auction. If they did, there would be a loud cry to change the law and shut it down. There are two auctions. All that want to participate in the auction must pre-register and it is cash only. At the first auction the minimum bid is the price of taxes owed and then it goes up from there. Whatever does not sell at the first auction goes to the second auction which is called the "Distressed Auction" where the minimum bid is $1. Typically about 1/3rd to 1/2 of the properties sell at the first auction the rest go to the second auction. I am currently working on a report that correlates the properties purchased at the past 4 years' distressed auction in Grand Rapids and nuisance/code violations with the City. For example there is an investor that happens to live in Caledonia that has purchased properties at the distressed auction every year for the past 4 years. Last year he bought 12 properties and paid about $90K. Collectively this individual owns about 30 properties in Grand Rapids. He currently collectively owes Grand Rapids over $20K in fines and fees for nuisances on his properties. I had a rep at the last Distressed Auction to scope things out. He was sitting in front of 4 guys each with a breif case. My guy told these men that it was his first auction and asked if they had a strategy. They shared it with them. These guys told us that they have been going to this second auction for years. They usually quadruple their money and sometimes get a ten fold return. They study the properties available and only bid on homes that have families living in them and paying rent. They usually pay between $800 to $1500 per property. What they are buying is VERY blighted properties that are rented to folks that have no other place to live. They win their properties, go to the treasurers office and pay. They go to the Register of Deeds and file their deeds. Then they go to the home and sign a new lease with the renter. In each case these 4 guys do no improvements to the properties, and more important do not pay the taxes...allowing them to revert back to the County in three years. You do the math. They pay an average of $1,000. They collect $500 a month for 36 months or $18,000. Right now according to my calculations about 15% of the properties in the tax auction are repeat offenders like this. Sending tax foreclosed properties to the auction for cash to the highest bidder is not good for our neighborhoods, it is not good for the County, and it is not good for our real estate market. We need to find a way to get as many properties as possible into the hands of responsible investors that will do the right thing with the properties they purchase. Right now it is a free for all and the wrong buyers are dictating the terms.

[ModSquad]

X99-A couple of quick comments to your post. You are correct the Policies and Procedures were developed a long time before I came on board. I am currently working on a MAJOR overhaul of these P&P, first and foremost is to change the policy that a property must not be occupied.

In regard to the auction there are 340 parcels that were foreclosed for taxes this past March 31. The Land Bank is requesting 19 SFH parcels in a development in Greenville that went under. We are doing this in cooperation with Oakfield Township, the City of Greenville, and a member of the Home Builder's Association in order to make sure these parcels get developed. Other than that we have also requested an additional 25 properties (I am going from memory on that number but it is close). It is true that we chose come properties which can be sold to generate income for the Land Bank so we do not require an allocation from the County's General Fund. That being said, I believe there are PLENTY of other properties left for investors to purchase.

I have a concept for a way the KCLBA could operate to ensure that well intentioned, financed, and informed investors will be assured of having tax foreclosed properties to purchase. It is too premature to delineate on this forum and needless to say I am not able to get it up and running having only taken over the KCLBA last October.

In regard to Rylees, there was a window of opportunity open for them to access the Brownfield clean up funds to remediate this site. In order to access the funds Rylees had to put a lot of pre-development money on the street in drawings, plans, assessments, etc. My guess is between $25,000 to as much as $40,000. I have done projects like this myself and know what pre-development costs run. It made no sense for them to do this without having some security that they would be able to purchase the property. Only by the Land Bank requesting that the property be pulled from the auction could they be assured of this. This is why the Land Bank agreed to participate with the City's Economic Development Department on this project. Remember this is a highly contaminated site and due to the bankruptcy of the previous owners there was no way to enforce clean up of the site on anyone that purchased it. Clean up is entirely voluntary.

I am surmising from your comments that you think that a government or quasi-governmental agency (which is a fitting description of the Land Bank) has no business interferring with the "Free Market." I do not think that any amount of argument on my part will convince someone that holds that premise to change his/her mind. I respect that but believe that the government or quasi-government messes with the free market all the time. My favorite example is the M6 corridor. When the government decided to put hundreds of millions of dollars into the development of this project it had a HUGE effect on the free market. There is no way all of the large box stores which have cropped up along M6 and Kalamazoo or the Medical Mile South along M6 and Byron Center would happened without M6. The new development along M6 has had a huge ripple affect causing even further decline along 28th street etc.

Dave,

Thanks for your comments, which I really do appreciate (particularly those about the MLive cesspool). I'm well familiar with the tax foreclosure process, and agree that it is not particularly well designed. However, there are a lot of good investors--I know a few of them--that would like to buy the houses, fix them up, put good tenants in them, and sell the properties in a few years. I am aware of dozens of properties they have purchased which they have done very right by. While there are also bad apples out there--such as those you cite--there are a lot of good guys that the Land Bank cuts off.

I looked over your Polices and Procedures of January 26, 2011 (based on my rather cursory review of that document). The procedures appear to give priority to unoccupied properties which "are available for immediate occupancy without the need for substantial rehabilitation, and will generate operating resources for the functions of the Land Bank." Such premium properties would command a good price at auction, and likely bring more than the taxes due. To me, this strongly suggests that the very governing procedures of the KCLBA themselves promote so-called "cherry picking" in order to fund the other "missions" of the Land Bank.

Per your above comment, the "bad guys" are typically buying absolute trash with existing tenants, and playing a very clever numbers game (which, incidentally, does apparently put a roof over the head of someone who otherwise could not afford one). Taking your governing Policies at face value, "... the Treasurer shall give consideration to the following factors ... 3. Properties must not be occupied" [emphasis added]. As drafted, occupancy status is an absolute factor. You simply cannot acquire an occupied property and act within your guidelines. If you abide by these rules, and only buy unoccupied properties, how can you even hope to break the cycle of guys with briefcases and calculators? It simply cannot be done without inviting comments that the Land Bank operates outside of its designated bounds.

I can certainly understand your mission--and I agree with most of what you're trying to do here. Unfortunately, I think the way things have been set up (which is probably no fault of yours) leaves you open to very creditable allegations of cherry picking, favoritism, and backroom deals (which is why, as a general premise, quasi-governmental agencies performing traditional non-governmental functions tends be a hot potato/recipe for disaster/insert your favorite cliche here). Why is Rylee's willing to pay significantly more than this property is ostensibly worth? And why would they not snap it up at the auction for much less money? Why wouldn't you snap it up for less? Why not put the property on the market for $66k to anyone that will buy it, with a preference to anyone that wants to develop it, live in it, or rehab it? HUD, Fannie, and Freddie all have similar programs, which generally leave far less of a bad taste in the public's collective mouth. The beauty of an auction or an advertised sale for FMV is that it is at least transparent, which the government should be. The way that land bank authorities have been established and operated ensures that they are anything but, which is why people generally seem not to trust what you do one iota. If you can address that issue (and finally admit that you do not operate at no cost to the taxpayer), I think you'll enjoy much broader support.

[x99]

Dave,

If you can put together a scheme where investors or other persons can come to the Land Bank and say, "We'd like to buy this" and then the Land Bank strikes a deal, but puts it up on the market (via the MLS or otherwise) for a period of at least two weeks under the same terms and conditions as the proposal, then I think you'll have a more transparent system going, with a lot less griping. That would be a vast improvement (or at least a good supplement) to the current auction system.

Dealing with allegations of "cherry picking" is going to be much more difficult because that's exactly what your Policies say you do--and it is what you do in practice. There was a good MLive article about the house on Fuller you plan to snag. I won't rehash the whole thing, which was already well played-out in the comments there, but here's my insight: You said rents would be $750/mo in current condition. Let's do some quick and dirty calculations: Assume a high end operating cost of 55%. That leaves $4050 as NOI. At even a 14 cap, it's still worth $29,000.00. You're buying it for much, much less. You're going to buy it for $6,200.00. No offense, but the taxpayer gets screwed to the tune of well over $20,000.00 (since, theoretically, you're not the government), and the investors lose out on the future returns from the property. No one wins but the KCLBA. That area is already littered with rentals, so the idea of "single family" somehow stabilizing the neighborhood is nonsense. In terms of a "noble end" or greater "mission" there isn't any here, other than that the cash might allow you to engage in other more noble activities than cherry picking.

Now, let's take the example of Rylee's. With respect to Rylee's I suspected there were some brownfield timing issues involved, but that was never publicly reported. Still, I don't see why you couldn't have marketed the thing for a week to avoid the hostilities. It was pretty clear to me this wasn't a "cherry picking" issue here, but there were definite favoritism concerns. That issue notwithstanding, this is a situation where everyone wins, and the land bank does something good. The same thing is arguably the case with the sidelot program where the lots are not otherwise buildable, and not worth much.

Your issue is one of funding: You do some good things, granted. However, you also fund yourself by robbing from Peter to pay Paul (Paul, of course, being the KCLBA and its employees) in a very, very conspicuous manner that is not at all even handed. You get the cream for a spoiled milk price, and everyone else gets screwed, comparatively speaking. Granted, it was perhaps a legislative choice to allow land banks to fund themselves in this fashion, and it isn't your fault, but none of that makes it a wise or fair funding mechanism. Now, if the local municipalities got to skim off the cream and toss the excess in the general fund, would I have such a problem with it? Probably not. The issue, again, is one of a quasi-governmental agency skimming the cream in order to pay its salaries and fund its mission, and then publicly tout itself as being "no cost" to the taxpayer. Like it or not, it looks like taxpayers are getting taken to the cleaners by your entity because, in a very real sense, they are--or at least have the potential to be.

I really hope the land bank does make a positive difference, but it would also behoove you to find a way to fund yourself that is not so thoroughly distasteful, if you can. I realize you didn't create the problem, but hopefully you can take steps to fix it.

I have a concept for a way the KCLBA could operate to ensure that well intentioned, financed, and informed investors will be assured of having tax foreclosed properties to purchase. It is too premature to delineate on this forum and needless to say I am not able to get it up and running having only taken over the KCLBA last October.

In regard to Rylees, there was a window of opportunity open for them to access the Brownfield clean up funds to remediate this site. In order to access the funds Rylees had to put a lot of pre-development money on the street in drawings, plans, assessments, etc. My guess is between $25,000 to as much as $40,000. I have done projects like this myself and know what pre-development costs run. It made no sense for them to do this without having some security that they would be able to purchase the property. Only by the Land Bank requesting that the property be pulled from the auction could they be assured of this. This is why the Land Bank agreed to participate with the City's Economic Development Department on this project. Remember this is a highly contaminated site and due to the bankruptcy of the previous owners there was no way to enforce clean up of the site on anyone that purchased it. Clean up is entirely voluntary.

I am surmising from your comments that you think that a government or quasi-governmental agency (which is a fitting description of the Land Bank) has no business interferring with the "Free Market." I do not think that any amount of argument on my part will convince someone that holds that premise to change his/her mind. I respect that but believe that the government or quasi-government messes with the free market all the time. My favorite example is the M6 corridor. When the government decided to put hundreds of millions of dollars into the development of this project it had a HUGE effect on the free market. There is no way all of the large box stores which have cropped up along M6 and Kalamazoo or the Medical Mile South along M6 and Byron Center would happened without M6. The new development along M6 has had a huge ripple affect causing even further decline along 28th street etc.

[x99]

I started to think I was perhaps being a big too harsh at first, so I looked up what the KCLBA is actually acquiring. Here's the article with the list:

http://www.mlive.com...k_lists_co.html

I looked up a few of the houses they're acquiring in Grand Rapids for whatever the back taxes are, and they're fine homes, that they will pick up for an absolute pittance compared to their auction prices in order to "fund their mission". If I could pick these things up for just the back taxes, I could make an absolute killing.

https://is.bsasoftwa...tion=FRONT&tp=i

https://is.bsasoftwa...tion=AMVSI&tp=i

https://is.bsasoftwa...tion=AMVSI&tp=i

https://is.bsasoftwa...tion=AMVSI&tp=i

https://is.bsasoftwa...n=01 FRONT&tp=i

And here's my favorite one, with the staff comment:

5076 MONTAUK DRIVE NE: Staff comments: Nice Home-Big mistake by City Financial. Revenue from this project will go a long way to help fund the Land Bank.

I think that says it all, right there. Where are the thoroughly distressed, crappy, blighted properties that the Bank can pick up and save from these horrible investors? Other than one bulldozer house and a few partnerships with charities that requested it, I ain't seein' it. The stories about the guys with briefcases are nice, but you aren't getting in their way with your primo property pick list. So much for acting in the public good. Cynical, I know, but this isn't a confidence inspiring list. Actions, as they say, speak louder than words. Hopefully the actions are better next year. Your goal is clearly to make money which the market already does a fine job of.

[ModSquad]

You are certainly entitled to your opinion. I make no bones about the few properties the KCLBA has requested that were chosen because they create revenue for the Land Bank. This is our main source of operating revenue. It is either this method or a county allocation from the operating budget and we know that would never happen. I imagine then you would argue that there is no need for a Land Bank.

To that I would point out that without a Land Bank the Sparta Foundry would not have been taken down and the site cleaned up. Without the Land Bank the 100+ jobs that will be created on this site with the new factory would not have come to fruition. Without the Land Bank several of the homes on the list would not have be given the level of renovation that they will because of the fact that we are able to buy them for the price of taxes. Actually, while hugely controversial, without the Land Bank the Clark Station mentioned in this post would not be cleaned up. The Land Bank is currenty in conversations with Bank of America, Freddie Mac, and Fannie Mae about some tangible plans to deal with the foreclosure crisis crippling our county. Why are they talking to us, because we are a county wide agency that is focused on preserving property values and creating economic development opportunitis. We cannot do any of this if we do not have operating revenue.

You mention Montauk. What you do not see is the proforma on this project and the renovations we plan to do to this property before we sell it. If we did not care about anything but the cash, most of these properties would be broom cleaned and sold as is for a hefty profit. In fact, sadly that is what too many Land Banks are doing now. The KCLBA is putting substantial rehab dollars into every single property. Montauk was built in early 2000 and is very tired inside. We are installing all new kitchen cabinets, solid surface counter, hardwood floors, all new landscaping, new paint, and updating the bathrooms. When it is listed it will be one of the nicest homes on the block listed on the MLS and sold to a homeowner. Broom clean it and sell it at the bottom of the market thus keeping down comps in this neighborhood, or do over the top renovations and sell it at the top of the market hopefull helping maintian or drive up comps. I would hope the neighbors would chose the later. The Land Bank would make a lot more money on the former, but the later is good for the neighborhood and for the property.

I know you will not agree with any of this logic, but I felt the need to explain.

I started to think I was perhaps being a big too harsh at first, so I looked up what the KCLBA is actually acquiring. I wasn't nearly nasty enough. No offense, Dave, but I've got to say that this is not an outfit whose continued existence is warranted. Who are you to say that you're so much better than all the other investors out there, and should get to screw them all? You're not the government, right? You're working for "free" and at no cost to the taxpayer, right? Bulls----. If anyone really needs more proof that the KCLBA cherry picks the living daylights out of properties to fund its existence and pay its salaries, this article says it all:

http://www.mlive.com...k_lists_co.html

I looked up a few of the houses they're acquiring in Grand Rapids for whatever the back taxes are, and they're find homes, that they will pick up for an absolute pittance compared to their auction prices in order to "fund their mission". If I could pick these things up for just the back taxes, I could make an absolute killing.

https://is.bsasoftwa...tion=FRONT&tp=i

https://is.bsasoftwa...tion=AMVSI&tp=i

https://is.bsasoftwa...tion=AMVSI&tp=i

https://is.bsasoftwa...tion=AMVSI&tp=i

https://is.bsasoftwa...n=01 FRONT&tp=i

And here's my favorite one, with the staff comment:

5076 MONTAUK DRIVE NE: Staff comments: Nice Home-Big mistake by City Financial. Revenue from this project will go a long way to help fund the Land Bank.

You've got to be kidding me. If anyone believes even for a minute this sort of behavior is justifiable, I've got a bridge to sell you. This is just wrong, wrong, wrong, wrong, wrong, and more wrong. Dave, I'm sure you're a fine guy, but after looking at the list of properties that you're scarfing up, and that thoroughly cynical comment on the Montauk house, I stand by my initial comments. The KCLBA might do an isolated bit of good here and there, but by and large, the KCLBA is just another needless layer of government with staff and personnel to fund. Whatever your budget is, I as a taxpayer am funding it, period, and I'm not at all happy about it, particularly the disingenuous way you have gone about claiming you operate "free of charge." In reality, you receive your funding from mistakes that banks or homeowners make by either being too poor or forgetting to pay the taxes on otherwise very decent and desirable properties. By and large, you're not buying trash and fixing it up. You're just sending a staff around to find people mistakes, paying yourselves for the trouble, and pocketing a salary for doing a job that didn't need to be done in the first place. There might be the rare exception like the Rylee's deal, but those a few and far between judging from your property hit list.

I don't begrudge you for doing your job, but I certainly wouldn't want it. Then again, getting paid to wander around and cherry pick good houses to buy for next to nothing might not be that bad at all... Sorry, but, ahh ... you almost had me on board until I read that article. Not cool at all.

[x99]

You're fast... You manage to quote me before I toned it down a bit. The Montauk "staff comment" got me really steamed--as I think it would any taxpayer. Like it or not, many of the staff comments have the distinct ring of a bunch of privileged guys laughing their tails off at the misfortune of another from which they can now profit.

I would actually argue that the Land Bank was a much more noble and worthy institution if it received its funding from the County, and restricted its activities to things like the brownfield, sidelot program, distressed properties, and properties that fail to sell at the first round auction. If you read the authorizing statute and legislative history, that, I believe, is what the original vision was. All of the residential properties I posted would have been handled more than adequately by the tax auction process.

The purpose and intent behind the land bank authorizing statute was not to allow land banks to pick the cream, but to create a better system for clearing titles and dealing with properties that no one truly wanted, or which created blight. The way you're running things by calling "first dibs" and really not taking title any quicker than an investor would have, 90% of the time you're just acting as a "super investor" boxing out the little guy. The private funding and self-promotion as a benevolent non-governmental organization certainly doesn't help the image problem you have, either. Part of the issue is indeed that there is relatively little need for a land bank in Kent County, comparatively speaking: This is not Flint, Detroit, or Saginaw where tax foreclosed properties have created a giant mess.

With your clarification, I understand the Rylee's deal, and some of the others were brownfield or other hurdles were involved that land bank's have statutory authority to deal with. I can stand behind that, and say that land banks have a valid function in those instances. Its everything else that leaves a bitter taste. In any event, I appreciate your dialogue, and hope this discussion was useful to you as well.

You are certainly entitled to your opinion. I make no bones about the few properties the KCLBA has requested that were chosen because they create revenue for the Land Bank. This is our main source of operating revenue. It is either this method or a county allocation from the operating budget and we know that would never happen. I imagine then you would argue that there is no need for a Land Bank.

I know you will not agree with any of this logic, but I felt the need to explain.

[ModSquad]

X99-Dialogue like this is very helpful and I believe important.

I am working hard to make what we do as transparent as possible but that is hard.

You do bring up a VERY interesting point. You mention there is relatively little need for a Land Bank in Kent County comparatively speaking. In light of the way Ingham, Genesee, Wayne County, and Detroit are running their LB's and the huge amount of tax foreclosed properties they have to deal with I could not agree more.

I would point out, however, that there has been a 48% increase in tax foreclosures every single year for the past 6 years. From 35 parcels in 2007 to 340 in 2012. This year there were an additional 175 properties that were given extentions on thier tax bill and we will see how this plays out. I do tink it is important that we do what we can to not end up like Detroit and Flint.

One of the big reasons for the increase in tax foreclosures is that the large lenders have gotten smarter and instead of foreclosing on low value properties they simply stop paying the taxes and it becomes a county problem. Of the 340 properties in this years list over half had mortgages attached to them. The lenders merely walked away.

The KCLBA has been intervening in these situations and convinced the lenders to not let the property rot for three years but to simply donate the property to the Land Bank upon making this financial decision.

Overall, however, I think the KCLBA will be as you mentioned more involved in brownfield clean up and economic development type projects like the Sparta Foundry.

Good discussion.

You're fast... You manage to quote me before I toned it down a bit. The Montauk "staff comment" got me really steamed--as I think it would any taxpayer. Like it or not, many of the staff comments have the distinct ring of a bunch of privileged guys laughing their tails off at the misfortune of another from which they can now profit.

I would actually argue that the Land Bank was a much more noble and worthy institution if it received its funding from the County, and restricted its activities to things like the brownfield, sidelot program, distressed properties, and properties that fail to sell at the first round auction. If you read the authorizing statute and legislative history, that, I believe, is what the original vision was. All of the residential properties I posted would have been handled more than adequately by the tax auction process.

The purpose and intent behind the land bank authorizing statute was not to allow land banks to pick the cream, but to create a better system for clearing titles and dealing with properties that no one truly wanted, or which created blight. The way you're running things by calling "first dibs" and really not taking title any quicker than an investor would have, 90% of the time you're just acting as a "super investor" boxing out the little guy. The private funding and self-promotion as a benevolent non-governmental organization certainly doesn't help the image problem you have, either. Part of the issue is indeed that there is relatively little need for a land bank in Kent County, comparatively speaking: This is not Flint, Detroit, or Saginaw where tax foreclosed properties have created a giant mess.

With your clarification, I understand the Rylee's deal, and some of the others were brownfield or other hurdles were involved that land bank's have statutory authority to deal with. I can stand behind that, and say that land banks have a valid function in those instances. Its everything else that leaves a bitter taste. In any event, I appreciate your dialogue, and hope this discussion was useful to you as well.

[joeDowntown]

Definitely a good discussion. Thanks for enlightening us. Interesting information.

Joe

[Veloise]

The Ingham county land bank routing slip sends this piece on their operation.

http://www.capitalgainsmedia.com/features/landbank0621.aspx

[Gorath]

Parking is now an issue?

http://www.mlive.com/business/west-michigan/index.ssf/2012/06/why_2_parking_spots_might_push.html#incart_river_default

Hardware store could get nixed because Rylee's wants 27 parking spaces. And the city will only allow 25. (And throw in that ACE hardware wants 40.)

[Veloise]

Immediately adjacent is Ball Park Floral, with a lot more spaces available that they would need for the drop & dash floral purchaser and their own delivery vehicles. (Shared parking agreements are coin of the realm in Detroit and other mixed-use urban areas.)

Key:

yellow: Ball Park Floral

turquoise: gas station

orange: residential use

(thanks, REGIS!)

[Gorath]

http://www.mlive.com/business/west-michigan/index.ssf/2012/07/rylees_ace_hardware_success_on.html#incart_river_default

They plan to have the store open by late February 2013. That has to be one aggressive construction schedule. Especially when you consider that they have to also do site cleanup / remediation.

[Veloise]

Been pedaling (surprise!) to Jazz at the Zoo on Monday nights, and a couple weeks back I noticed that the former grocery store now sports brand new Family Dollar signage. And lots of tagging on the east-facing wall.

[x99]

Impressive. Good to see something happening with the site, now that it appears to have been publicly aired out. It's good see a responsible local company like Rylee's moving this forward, instead of even more Family Dollars. I am so sick of those stores I could scream.

To reiterate, what (I believe) Rylee's is doing here is using the landbank to have the property designated as Brownfield in order to expedite the clean up credits. It is very likely that without the landbank's statutory powers to do this, the deal may not have happened. Thus, here some economic waste is probably prevented. So hats off to everyone for finally giving the other interested parties a chance to speak up, and hats off to Rylee's for taking the risk.

In other fun landbank news, though, there's this: http://www.mlive.com/news/grand-rapids/index.ssf/2012/06/kent_countys_first_large_land.html ... The controversy does not seem to be subsiding. I wish I could say I made some of the very astute comments to the article, but I didn't. UgottaBcrazy's comments there are fairly in depth, and dead on: The landbank is a county entity that requires tax dollars for funding, one way or another. Its cost is not "free" as Dave Allen tried (tries?) to claim. Here, I would argue that its cost may have been worth it. Hopefully lighthousedave is going to take some of this to heart, and revise the way he runs and markets the land bank (or ask the County to properly fund it), which was itself the source of a huge amount of the controversy.

[egrguy]

I think the land bank a victory with this project. I think the scrutiny on the land bank is great as it hopefully pushes the entity to develop and grow into a strong community asset.

Second, I would like to see a SE side store... South Division maybe?

[fotoman311]

http://www.mlive.com...t_river_default

They plan to have the store open by late February 2013. That has to be one aggressive construction schedule. Especially when you consider that they have to also do site cleanup / remediation.

Not wasting any time. With what's already done, I can see them meeting their goal. Doesn't seem to take that long to throw up a building when you're using large cinder blocks.