Marion city council establishes local land bank

The Marion City Council, approved at Nov. 6 meeting the establishment of a land bank, a mechanism municipalities can use in returning abandoned, tax-delinquent properties back into productive use.

Mayor Todd Heitschmidt and the council agreed to serve as the initial board with City Administrator Roger Holter as a non-voting city staff member.

“Eventually, we would like to see the public seated on this board, but because it’s new and (the council’s) idea, we will hold it closer (at this time),” Heitschmidt said.

Councilor Jerry Kline and Heitschmidt have shorter terms, Holter said, which will allow the council to start putting in members from the community on the board.

Holter said: “The way municipal government was created, it wasn’t about being property managers. But by design a land bank is a public-held entity that manages property.”

He cited two concerns, making sure the city is compliant with all state statutes, and that the council is able to deliver on the promises of why it initially created the land bank.

“The City of Marion Land Bank gives Marion County an organized process for the sheriff’s sale,” Holter said. “In the past, there wasn’t a substantial minimum bid—one equal to back taxes on a property—because if it didn’t sell at the tax sale they had no path of resolution.”

By statute and structure, he said, the land bank is a viable way to move parcels off the county books to an organization that is dedicated to the redevelopment of that property to restore it to productive property tax.

Heitschmidt said land banks are newer to cities that are similar in size to Marion.

“Bigger cities, like Kansas City or Wichita, grabbed right on to this,” he said. “The (Kansas) Legisla­ture put this together, and it makes sense for larger muni­cipalities to get these properties.”

The reason smaller communities weren’t much involved in land banks was because it wasn’t a big issue, Heitschmidt said, but now with higher delinquent tax rates, people aren’t taking care of properties.

In recent years, though, the number of properties vacant, abandoned or owing taxes is about 84 properties, Heitschmidt said.

One of the more recent properties deeded to the city was 714 Sherman St.

Once the board and structure are set up, Holter said, someone can deed property to the city or land bank.

“Down the road, this redevelopment company will control inventory, assets and capital to invest so we get more things moving,” he said. “The land bank will be a budgeted entity, financial accountable and transparent.”

Marion City Council will still have the overall vision and comprehensive plan of our community causing the two to work together, he added.

Holter said in theory there isn’t money in the land bank until it finds the first developer. Citing a vacated house as an example, he said a developer could agree to pay $300, but would need to accomplish a predetermined plan by the end of a year.

“During that year, (the developer) won’t have to pay property taxes because property taxes are exempted while the project is going on,” he said.

“For a lot of developers, spec houses are always a little sketchy because of land costs and property taxes upfront, so the land bank will be able to facilitate getting that off the table.”

With the addition of the land bank, the developer will only have to come up with capital to buy the materials to build a particular project, labor costs depending on how internal structure is, and those can also can be buffered, Holter added.

“A developer literally could get a house built and stood up in our community, or bring in a module that fits our requirements, sell it before he has all the other stuff due, and that’s what we are trying to facilitate and accommodate,” he said.

Another advantage of the land bank is it will make for easier communication, Holter said.

“Instead of going to the mayor, city hall, the building inspector, and getting a banker, the land board would say, ‘Here’s how the process works, here’s our expectations and we can help you do this and that.’”

Other business

In other business, the council:

• approved a slightly higher premium on the Marion Municipal Airport liability insurance, but the amount of liability went from $500,000 to $1 million and it’s with a different insurance company.

Alex Case, the city’s insurance agent, suggested the city add a terrorism rider and war policy rider.

• reviewed an ordinance with some changes in policy. One change included setting the council meeting agenda. One of the proposed changes involves the city administrator and authorizes him to add items to the agenda brought to him directly by any elected officials or citizens.

The procedure would simplify agenda requests, which is more liberal than state law would allow, but the city and council want to operate local government with more transparency.

“We put packets out there, the consent agenda and everything is in the public domain prior to council meetings,” Holter said. “This would give us a process and the ability to open up meetings for additional participation if constituents desire.”

The general consensus by the council was that notifying in advance regarding the agenda would not be a requirement for a public forum. For items not already on the agenda, individuals can come in and talk about what’s on their mind.

The ordinance regarding procedures will be prepared for the Nov. 20 meeting and ready for adopting.

• discussed adopting a city code regarding public use in a right-of-way involving franchisees such as utility workers and other service providers working in those areas.

Currently the city has nothing to address this situation. For example, Holter said if a utility crew needed to get under an asphalt street and decide it’s better if the do an open cut across the asphalt, there’s nothing in the codes to prevent that.

While researching this problem, some communities adopted codes that involved expensive guidelines, but other communities with 50,000 or above population use the same utility operators that are in local marketplace .

“Some communities summed up their code requirement by stating that if a utility tears something up, they fix it,” Holter said.