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How land banks work

(THE REAL DEAL TRISTATE) September 9, 2019

Over the years, businessman and developer Vincent Trapani often had occasion to drive past an abandoned power generation plant at 1600 Fifth Avenue in Bay Shore on Long Island. Closed in 1995, the property was an eyesore, all the while sitting on the county tax rolls, accumulating $6.5 million in delinquent taxes over 23 years.

That is, until 2018, when Trapani bought the 1.8-acre site for $343,000, courtesy of the Suffolk County Land Bank, a nonprofit entity created expressly to acquire and facilitate the rehabilitation of derelict properties, transfer them to responsible owners and, in the process, restore them to the tax rolls and productive use in the community. Today, Trapani is in the process of cleaning up the site, which contains metals and other contaminants. He plans to build a parking and storage facility for nearby businesses.

It will help 60 to 70 small businesses, giving them storage and a place to park close by,” said Trapani. “It helps the area and the community.”

The Suffolk County Land Bank is one of the many land banks that are cropping up in the tri-state area to deal with thousands of derelict homes and abandoned, contaminated industrial and manufacturing sites.

Authorized in New York in 2011 and more recently in New Jerseyand Connecticut, land banks are increasingly taking over abandoned and often tax-delinquent properties that deter development, invite crime and vandalism and depress the value of homes and businesses nearby. Many of them — especially residential parcels — are the detritus of the mortgage crisis of 2008 and the Great Recession that followed. Land banks provide expertise and serve as a flexible tool for local governments to deal with the blighted properties.

There was no demand at all for these properties to be developed liability-free without incentives or some sort of funding from the state or municipalities,” said Ann Catino, an attorney and co-chair of Connecticut’s Brownfield Working Group, a group of experts tasked with making recommendations for remediating and developing contaminated sites. “They were languishing, destroying the centers of a lot of communities, including places that are ripe for infrastructure,” she said.

Still, the process takes money and can be long and complicated as land banks navigate the necessary legal byways and try to come up with solutions that deliver the greatest benefit to communities. It’s not always easy to establish priorities in cities and neighborhoods that have large swaths of problem properties, said experts.

Source: The Real Deal Tristate