Posted: 12:00 a.m. Tuesday, Jan. 20, 2015

Deadline looms for $2 million land bank grant

By Denise G. Callahan

Staff Writer

BUTLER COUNTY — 

With $2 million on the line, officials in Hamilton and Middletown are working feverishly to acquire 40 blighted and abandoned buildings to meet a March 31 federal grant deadline.

The Butler County land bank and the county’s two biggest cities must get control of 40 blighted buildings by the end of March and another 40 by September so they can hang onto a $2 million federal grant they were awarded in August. It seemed like an impossible task in such short time frame until the county commissioners sanctioned an expedited foreclosure process, just for this grant.

Middletown City Manager Doug Adkins said they don’t have any properties in the pipeline yet, but they are striving to meet the grant quota.

“It is a difficult timeline to meet,” he said. “Now that we have a chance at success with the change in policy on abbreviating the foreclosure process, every Middletown city resource will be working on finding donations, purchases, and foreclosures far enough along in the process and in the target areas to meet the initial March 31 deadline.”

Comments at a land bank meeting a couple weeks ago caused some confusion, when people were under the impression two sheriff’s sales would still be required. County Treasurer Nancy Nix informed the land bank members this week that is not the case.

“There is a narrow definition of abandoned properties that meet strict criteria to qualify for the alternative redemption method…,” she said. “The commissioners have affirmed their support for the alternative redemption method for the small number of affected properties that qualify for the Hardest Hit Funds grant.”

Hamilton’s Assistant Law Director Kathy Dudley said her city has already been acquiring properties to meet the grant deadline and she believes they can cull between 20 and 30, which would make up the difference if Middletown has a shortfall.

Using the expedited alternative redemption tool isn’t the only way Dudley said they are going to meet the Hardest Hit Fund quota.

“We have also developed relationships with various banks and others to donate property, and then there are some properties, I think we bought one for a $2,000, where the people just don’t want them anymore,” Dudley said. “The properties we’re talking about are ones that are just pretty much the orphans, vacant, abandoned properties out there that the banks aren’t doing anything with and the people have walked away from.”

County Administrator Charlie Young said the commissioners have been loathe to sidestep the sheriff sale, but they also don’t want the county to lose out on $2 million to get rid of blight.

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

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

Adkins said Middletown has been hesitant about acquiring properties up until now, because they didn’t want to be left owning a pack of properties. The expedited process has allayed some concerns.

“The city has been cautious in taking title to all property as City Council has stated on multiple occasions that the city should not be in the real estate business,” Adkins said. “City Council has amended that policy to allow us to acquire property for this grant.”

He said he has been told the county will not be granted more time by the Ohio Housing Finance Agency (OHFA). Dudley said the processes attached to this grant are very complicated, and it is unclear what the consequences will be if they can’t meet the quota in time. She said the OHEA estimated it takes $25,000 per property to banish blight and maybe they will just subtract dollars from the award as a sanction for not meeting the deadline.

“What that sanction would be depends on where they think you are, do you have this many under title, then we’ll give you money up to this amount and take the rest away,” she said. “They could terminate it totally; but if what you have is 38 instead of 40, I don’t think there’s going to be a sanction.”

Prosecutor Mike Gmoser said he is “cautiously optimistic” the county will be able to make the deadline.

With $2.7 million it received in Moving Ohio Forward grants from the state, Butler County formed its land bank two years ago to deal with blighted buildings. The cities of Hamilton and Middletown each gave $1.1 million to the land bank fund as well. Approximately 500 blighted buildings have been torn down through the land bank program.