"Land Reutilization" Legislation

By Steve Brinker

Pending House Bill 302 would permit county treasurer to create non-profit land reutilization program for Hamilton County.

The proposed legislation is modeled after a very successful program in Genessee County, Michigan. Under the Ohio proposal Chapter 1724 of the Ohio Revised Code would be amended to give additional authority to Land Reutilization Corporations ("LRC"). Under the new legislation the LRC would have the power to receive foreclosed properties from tax foreclosure, banks, government sponsored enterprises, or by purchase. The LRC would oversee the properties and keep them in the condition acquired pending rehabilitation and ultimate sale. The LRC could also assemble properties for development and demolish properties which are beyond redemption or have no residual equity. The LRC could buy, sell or hold properties throughout the county. By being able to retain properties, the LRC would eliminate land speculation and "flipping" of foreclosed properties as well as slowing the negative impact on communities most affected by the current foreclosure environment.

The program will have to be self-sufficient since government funding is not assured. Potential sources of funding would include:

Penalties and Interest From Tax Anticipation

As proposed, county treasurers would be permitted to borrow internally from daily balances so as to pay off county taxing districts for late and delinquent real estate taxes, thus creating financial stability for those jurisdictions. Then all penalties and interest accruing from those delinquencies would go to the LRC. The difference between the cost of borrowing on the daily collections (3-4%) and the rate on penalties and interest (10-12%) would provide one source of annual revenue. This revenue will then be recapitalized by tax anticipation notes secured by the ongoing annual revenue stream.

Tax Collection Cost Fund

An additional source of revenue could come from the Treasurer's portion of the 5% which the state permits to be collected on taxes following certification of delinquency. Currently these fees are divided between the Treasurer and Prosecutor and the anticipated surplus of the Treasurer could be diverted to the LRC.

Direct Transfers to LRC

The new legislation would permit the Treasurer to transfer unredeemed tax foreclosed properties directly to be LRC if not redeemed by their owners within the 45 day statutory period. This would prevent speculators from purchasing the good properties and leaving negative equity properties to the government. This way the positive equity properties can be sold and used to help fund the operations of the LRC.

Partnering With the Private Sector

By having properties vested in one place with the LRC, properties can be disposed of in an orderly fashion consistent with existing land use plans, or packaged and sold to private developers willing to work in conjunction with desired planning models. Finally as the program grows it will be able to help in other areas with nuisance abatement and code enforcement where those areas are unable to help themselves.

In addition to the city and county, the Community Development Fund of Greater Cincinnati, The Greater Cincinnati Redevelopment Partnership Inc., and the Camp Washington Community Board have all endorsed this program.

As candidate for County Treasurer I am committed to instituting the Land Reutilization program as soon as the legislation is passed and I am elected to the office of Treasurer.