Butler Countyland bank halfway to $2 million grant quota

$75M in grant money used to demolish more than14,000 Ohioproperties.

By Laura A. Bischoff and Denise G. Callahan

Staff Writer

BUTLER COUNTY — 

    More than 14,600 dilapidated, abandonedproperties were demolished over the past two years using $75 million inone-time grant money from Ohio Attorney General Mike DeWine, which helped localcommunities accelerate efforts to clear blighted buildings from neighborhoods.

    DeWine said in many cases, the abandonedhouses and buildings had become magnets for crime, drugs, vermin and arson.

    “By tearing down blighted propertiesthrough our program, we helped Ohio communities restore property values, re-generateeconomic development potential and ensure that citizens and families have asafe place to live,” DeWine said on Friday when he issued a close-out report onhow the money was spent.

    After the buildings were knocked down, thevacant lots were turned over to local land banks, sold to adjacent neighbors,converted into parks, sold for redevelopment or remain under the previousowners, who now face liens for the demolition expenses.

    In some cases, such as in Franklinin Warren County, fire departments used thesoon-to-be demolished properties for training sites.

    Under the grant, Butler Countyspent $4.6 million razing 511 ailing structures. In Warren County,47 buildings came down at a cost of $495,009.

    The high number of banished blightedbuildings, about 300 in Middletown,is part of the reason that city is having trouble trying to come up with theirquota for a new federal grant.

    “A lot of it has to do with the fact wewere so successful in the last trip through, that there weren’t a lot ofproperties right at the front of the door in the pipeline to move through thepipeline,” Middletown Law Director Les Landen said. “I do not expect we aregoing to make it to the original target number of 20.”

    Hamilton andMiddletown mustacquire 40 blighted properties collectively by March 31 and another 40 bySeptember, in order to keep a $2 million Hardest Hit Fund federal grant.

    Tim Carlson, the attorney for the Butler Countyland bank, said Hamilton, with the next twoclosings, will have 19 properties in hand and Middletown has culled three. He said hebelieves Hamiltonwill end up acquiring about 30 buildings and he is more optimistic than Landen.

    “I think what’s going to happen is Hamilton may find some additional properties and then Middletown will continueworking on them, so we can meet our goal of the 40 properties,” he said andthen addressed the likelihood of reaching the quota. “I certainly hope so,we’re all working very hard to get it done.”

    A number of factors have contributed towhat has now become a race against time. Hamilton Assistant Law Director KathyDudley said the county is three to six months behind other land banks becausethey were not awarded a grant in the first go-around. After the countycommissioners agreed to siphon 1 percent of delinquent tax and assessmentcollection funds (DTAC) to bolster the land bank, giving it a source of income,they were successful in their second application for federal funds.

    It wasn’t until after the countycommissioners said they would allow expedited foreclosures last month, for thisspecific grant, that Middletownbegan picking up properties. County Administrator Charlie Young said thecommissioners have been loathe to sidestep the sheriff sale process, but theyalso don’t want the county to lose out on $2 million to get rid of blight.

    “We have been conservative in approachingthis because of the concern for property rights,” he said. “There is kind of atension between the desire to be able to move very quickly, and the desire toprotect property rights for individual property owners.”

    Officials said the county will not begranted more time by the Ohio Housing Finance Agency (OHFA) to acquireproperties. The OHFA estimated it takes $25,000 per property to banish blightand Landen said they will likely just subtract dollars from the award as asanction for not meeting the deadline.

    “My understanding is there will still bemoney available for Butler County,” Landen said.“The amount that comes to Middletownmay be a bit less simply because we don’t have as many properties as weoriginally suspected.”

    Butler County formed its landbank two years ago to deal with blighted buildings, after DeWine provided the$2.6 million in Moving Ohio Forward funds. The cities of Hamiltonand Middletowneach gave $1.1 million to the land bank fund as well.

    In February 2012, 49 state attorneysgeneral settled with five of the nation’s biggest mortgage serviceorganizations over foreclosure abuses and fraud. Ohio received $526 million —$306 million for loan modifications, $50 million in cash payments to foreclosedborrowers and $93 million to DeWine’s office to address foreclosure issues.

    DeWine took the unusual step of devoting$75 million of the money to demolition. (Four other states earmarked a combinedtotal of $20.5 million of the settlement money for demolition efforts.)Counties, which provided matching money for any grant beyond the first $500,000,chipped in $44 million.

Statewide,$119 million was spent in settlement and local money to raze 14,608 units at anaverage cost of $8,149 per unit.