Reclaiming the Land
The herculean effort was led by the Lorain County Land Reutilization Corp. and fed by state funds and local matching dollars earmarked to level dangerous, vacant structures and stabilize neighborhoods hit hard by questionable lending practices, economic downturn and urban sprawl.
The county’s Land Reutilization Corp. — most refer to it as the land bank — was incorporated in May 2012 as a way to deal with structures in need of demolition, identify tax-delinquent properties and redevelop those properties to restore them to their “tax-paying, useful life,” says Patrick Metzger, assistant director of the land bank and director of the Lorain County Port Authority, which is its administrative agent.
“The formation of the land bank is a big step for the county as a whole because now there is a mechanism in place to address these issues that are overwhelming certain communities,” Metzger says.
“The land bank now gives us an opportunity to clean up our neighborhood and restore a better quality of life to our residents,” says Lorain County Commissioner Ted Kalo.
“The benefit to residents is amazing,” adds Kalo, who grew up in Lorain. “When you clean up the blighted property, you clean up the crime and these neighborhoods have an opportunity to restore or rebuild into what they once were. As we go through these neighborhoods and start taking down these houses, the residents come out and thank us because it cleans up the crime element. You’ve got squatters and drug deals going on in these homes. These homes have been stripped of all their copper piping and wire. They are in disarray, and the yards are in bad shape. It’s a haven for vagrancy. When we clean these areas up, it just makes a world of difference in these communities.”
As its first order of business, the county applied for and was awarded about $2 million from the state Attorney General Mike DeWine’s Moving Ohio Forward Demolition Grant program, which allocated $75 million to municipalities from the national mortgage settlement. The county contributed its required $1.5 million and went to work tackling the backlog of homes in need of immediate demolition.
The lion’s share of demolitions occurred in the urban centers of Elyria and Lorain. The land bank has agreements in place to demolish properties in 15 municipalities throughout the county, including townships such as Penfield and more affluent cities such as Avon Lake.
“If you have five vacant houses on your street and they are falling apart and they are condemned by cities and nothing ever happens to them, that takes a toll across the board,” says Kalo. Not only does it decrease the value of nearby homes, there is also a cost to the city and taxpayers.
“We did $1.3 million of demolitions in the city of Lorain and nearly that many in Elyria. Those cities don’t have that kind of money sitting around, and surely our townships don’t have tens of thousands of dollars of loose money to deal with abandoned and dangerous houses,” says Metzger. “It’s a real burden to these communities.”
The land bank is led by a board of directors that include the three county commissioners — Kalo, Lori Kokoski and Tom Williams — county treasurer Dan Talarek, Lorain Mayor Chase Ritenauer, Sheffield Township fiscal officer Patricia Echko, director James Cordes, who is also county administrator, and Metzger.
Lorain County was the first land bank in the state of Ohio to “burn through almost its full allocation of the attorney general’s money,” says Kalo. A second phase amount of $104,000 was awarded this year and will allow the county to bring its demolition total to more than 200 structures.
Metzger says the massive demolition effort shows people that government entities or agencies are aware of the problems these vacant and abandoned homes cause and are willing to doing something about it.
“The transformation comes because it really exposes what is going on and offers a solution. It may not be the best solution, but it is a solution that can have a positive effect,” he adds.
Level the Field
In February, the land bank requested its largest grant to date — $6.7 million from the Ohio Housing Finance Agency, which has $60 million of its total $270 million remaining foreclosure prevention funds, to take down another 260 homes around the county, says Kalo. In early March the Ohio Housing Finance Agency awarded the land bank $3,005,000.
“They are reallocating the dollars that were supposed to be helping people with their foreclosures for demolitions that can be used by land banks,” he says. “Our major issue right now is trying to get the federal government to crack down on what we call ‘zombie mortgages,’ where people have been out of the house for multiple years, and through the nuisance laws, we have been able to demolish the house. But the land bank can’t take title of the property because the banks haven’t gone through with the sheriff’s sale or the total foreclosure process. It’s sitting in limbo.”
Until the government addresses this problem, these residential tracts will remain grassy lots because municipalities can’t seize the land and encourage development. This lack of development can have a negative effect on neighborhoods that need revitalization, Metzger says.
“Maybe we’re all to go in and demolish all these houses on the street but then you’ve left all these open holes on the street where something used to be,” he says. “That can have the effect of sliding in the other direction and have people wonder what is wrong with that particular street. The ‘improvement’ can have a diminishing effect because a lot of it is perception.”
The Neighborhood Initiative Program funds from OHFA are designed to stem the decline in home values and prevent future foreclosures on existing homeowners in communities affected negatively by vacant and abandoned properties. The program requires that the land banks own the properties where structures are to be demolished, says Metzger.
“Just because we demolish a home doesn’t mean it becomes a part of the land bank — it just means the land bank was contracted to do the work and because it’s been declared a nuisance by the community,” Kalo says.
That was the case in almost all of the county’s first 200 demolitions. The land, unless it is severely tax-delinquent and ultimately referred to sheriff’s sale, is retained by its owners, be it a bank, person or other entity.
By the end of 2015, NIP is expected to fund the demolition of nearly 5,000 vacant and abandoned homes throughout the state with an average amount of assistance of $12,000 and a maximum of $25,000 per property. Metzger says it costs his land bank an average of $21,000 to demolish a home.
“When we demolish these houses, we have a really strict set of specifications of how we leave the property in a condition,” he says. “So if it’s never redeveloped again, at least it looks as though it’s always been there. We remove all foundations, all utilities, all driveways and aprons, and replace all sidewalks and replant all grass.”
Each house to be demolished must be referred to the land bank and signed off on by the law director of the corresponding city, asserting that the legal process has been followed and demolition has been ordered.
Then the land bank conducts a title search to ensure no one got missed in the notification process. It also is required to do an asbestos survey, solicit bids from contractors and select the lowest and best cost, have a contractor walk through the site before starting demolition.
“It might take three weeks per house to get through all the processes,” says Metzger, who did a walk-through on each of 170-plus houses before they were demolished. The structures hadn’t been homes to anything other than junk, debris, human waste, animal skeletons, leaky pipes, bugs and mold for quite some time.
“People ask us if these homes can be saved, but there is nothing left there to restore,” he says. “We had hoarder houses and homes that had been exposed to the elements. They are so far over the edge. It’s beyond a financial decision; it’s a safety decision. They are just dangerous.”
This is the first step in improving blighted neighborhoods. These properties, even though ready for a builder or developer, could sit in the land bank for a long time depending on their location. An Avon Lake property will be more attractive than a pocket in downtown Lorain or Elyria. “These communities have other issues other than the blighted house so it becomes one spoke in the wheel of improving the neighborhoods, and that could take some time,” says Metzger.
A Pathway for
The land bank is concerned with far more than demolitions — they were the most glaring and immediate need. “Our goal is to return as many properties to functionality as we can,” Metzger says.
That can mean identifying tax-delinquent properties and encouraging people to pay those taxes. If the owner of a property is severely tax delinquent — and financially absent from the structure’s maintenance — the land bank can refer the property to the county treasurer, who can send it along to the prosecutor to place in the sheriff’s sale process. If the land bank has an interest or redevelopment plan in mind for a specific property, it can take possession of it at the end of the sheriff’s sale process, Metzger says.
“A lot of these properties that go into the process of foreclosure and sheriff’s sale have so much burden attached to them in terms of debt and taxes,” he adds. “The point of bringing it to the land bank is that it clears those liabilities off of it and starts from square one. It makes it more appealing to be redeveloped because you don’t have to start underwater.”
So far, the land bank had acquired five properties. One is a commercial site in downtown Elyria that was tax-delinquent for eight years and assumed by the land bank after a state auditor’s forfeiture sale. Another property is located on Abbe Road — a 2-acre site that was home to an old trailer park. The 45 stripped-out trailers were demolitions as part of the attorney general’s demolition program.
“We are looking at redevelopment options for that land, and we want to work closely with Elyria so we can do something productive,” says Metzger, adding that the demolition took months to complete.
The downtown Elyria location is an about 15,000-square-foot space in an old building situated on the next block east from the FirstMerit Bank building. The land bank acquired it last summer, and the county commissioners tentatively plan to put adult probation and a crime lab there.
“The Lorain County land bank, like all land banks, has a lot of power that the state legislature has given it to do improvements in commercial and residential areas,” says Kalo. “We hope to expand to our downtowns to help them with some of the older buildings that are distressed and hopefully rehab those down the road.”