Land bank debated

Dixon's plan for agency to sell city-owned lots faces opposition from council president and comptroller

March 04, 2009|By Annie Linskey | Annie Linskey,

Baltimore Mayor Sheila Dixon's plan to create a quasi-government agency to sell city-owned vacant land is facing opposition from elected leaders worried that the organization could conduct its business outside public scrutiny and wouldn't be financially viable.

Dixon envisions a nonprofit Land Bank Authority, partially modeled on a successful program in Michigan, that would take the titles to many of the 10,000 city-owned vacant lots and houses and sell them to responsible buyers. Handling the sales process outside the immediate scope of city government would cut the red tape associated with purchasing land, she says.

"It is trying to streamline some of the deals," Dixon said in an interview. Reducing blight in the city is one of the mayor's priorities, and she has pushed the land bank in each of her three State of the City addresses. She introduced city legislation for it in January, and she will hold a news conference today to rally support for the bill. Tomorrow, she will take the unusual step of testifying in support of her legislation before a City Council panel. But as the details about her proposal have emerged, City Council President Stephanie Rawlings-Blake and Comptroller Joan M. Pratt have said the mayor should fix problems within that Housing Department that prevent land from getting on the market instead of creating a new bureaucracy.

"Will this actually work?" Rawlings-Blake said. "We have to do something about the vacant housing problem in the city. My concern is, I don't want to, in efforts to fix a problem, create a different problem."

Under the mayor's plan, property originally purchased with city tax dollars would be sold to small developers and nonprofits outside the purview of the Board of Estimates, a spending panel that meets weekly to approve all transactions of more than $5,000.

"We already have a process [for selling land]," Rawlings-Blake said. "It is a process that has credibility. It has the transparency built in."

Dixon notes that the City Council president and the comptroller would sit on the land bank's board and would each have two votes. The mayor would have seven votes. Pratt controls the city's real estate office, which allows her to hold up some land deals. The land bank would operate outside that authority.

Pratt said she worries that the land bank could be a bad financial move for the city.

"During these strange, difficult economic times, I just don't think we should be experimenting with a project," Pratt said. "If we are going to give away the real estate and transfer it to an experimental group ... during these economic times, it is risky."

The mayor says the plan would be budget neutral, but Pratt says she believes it would cost money. The city would still pay for upkeep on the land bank properties but would not receive the revenue when they're sold. Instead, that money would go to fund the land bank.

City Housing Director Paul T. Graziano said Baltimore's land-sale process needs an overhaul. It was not set up to handle selling thousands of properties and is "fraught with internal complexities," he said.

In addition to cutting red tape, the land bank would buy up vacant land and then sell it to groups that would improve it, even if those groups didn't offer the highest price. Proponents argue that, for example, a community could reap greater benefits by selling a vacant lot for $5,000 to a neighborhood organization interested in building a park than selling it for $10,000 to an absentee landlord.

But, for such a concept to work, the public must have confidence in the process, said Dan Kildee, who founded a land bank in Genesee County, Mich., and consulted on the Baltimore plan.

"All of the decisions made by a land bank have to be made in the sunshine," he said.

As proposed, the new land bank would have to comply with the state's open-meetings laws and open-records laws.

But those rules do not always guarantee public scrutiny. For example, as Graziano briefed the City Council on the land bank proposal at an open meeting last month, two Dixon aides tossed television and print photographers from the room, saying that there was not enough space for them. The photographers were allowed back in 40 minutes later.

Other details of the proposal must still be settled. Large redevelopment projects would still pass through the Board of Estimates and City Council, but there is no definition for "large." Graziano said: "It is not a bright line. You know it when you see it."

Real estate agents and others who participate in city land sales say bottlenecks hinder Baltimore's current efforts to sell property. Some land is sold by city real estate agents, but Baltimore is not providing them enough land to meet demand. Another system - known as the rolling bid process - is difficult to navigate. "If you are a man on the street, you cannot do it," said Stanley Zerden, who helps developers purchase city land via that process.

He said it remains to be seen whether a land bank could solve the problems. "It all depends how it is set up," he said. "Is it going to look like a cat in the front and a dog in the rear?"

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