Land bank board considers policy changes for selling 'side lot' properties

Members of the Highland County Land Reutilization Corporation (land bank) board continued to debate their current side lot policy during their Thursday, May 16 meeting.

As previously reported, during the board’s April 19 meeting, legal counsel Todd Book asked the board if they wanted to revisit their current policy of selling side lots for $100 and another policy that the HCLRC can “never sell a piece of property for less than $300 except for the side lot.” Board president Terry Britton asked Book to put together “some recommendations” to review.

Book told the board Thursday that he looked into the “history” of the regulations of the land bank, which were drafted in 2016. 

“The policies and procedures were patterned on the policies and procedures of Lucas County,” Book said. “I like their stuff, but they have a side lot program — an extensive side lot program — there simply because they have a lot of very small lots in subdivisions. You look here in Highland County, and outside of maybe Hillsboro, and maybe not even Hillsboro, I don't know how extensive our side lot program would ever be, just simply because we don't have those types of properties.” 

Prior to their current administration, the land bank made what they referred to as “side lot” sales to neighbors of parcels owned by the HCLRC, sometimes when they received no other offers. The Highland County Press has reported on the HCLRC making offers to neighbors at half the price of the valuation of the properties in the past. 

As explained by Book, to qualify as a side lot, the parcel must be ”something that is ineligible for new development.

“An easy fix would be to adjust the amount of money that it takes to buy a property out of the side lot program from $100 to the $500 range, which would also mean we would need to increase the minimum bid for any property,” Book said. “The other thought would be to maybe take a look at how we have structured or how we've adopted this program from Lucas County on side lots altogether and maybe look at modifying that to restrict even the ability to have side lots to maybe certain parts of the county where they would fit those parameters of very small lots. 

“That would be another approach, to look at those and see if we even really need a side lot program.”

Britton asked the board for their thoughts. Board member David Daniels pointed out that in acquiring parcels, the land bank is “wiping out” thousands of dollars’ “worth of debt” from back taxes owed.

“We're not selling those for $100,” he said. “We shouldn't sell them for $100. We have to try to recoup some costs out of this. You just simply cannot take over a piece of property put $12,000 in tearing it down, wipe $10,000 off the property [tax] rolls and expect to get $100 out of it and be satisfied. We can't do that. We’ll go broke. 

“If that's the case, we'll just allow the delinquency to continue because it's costing us less to have the delinquent tax.”

Board member Lauren Walker asked if it was possible to “foreclose on more properties through the year” in order to “capture some of this money coming back.”

“There is the ability of land banks to become the owners of tax liens, and pursue foreclosures through that process,” Book said. “That's something that we could investigate more, to see if that's something that we want to try to pursue.”

Walker said she agreed that the side lot price “needs to be increased” regardless.

Another issue to consider, Britton said, was that “the value of a lot in a certain place versus the value of a lot in a different place” can vary greatly in the county. “My feeling is, do we need to not put a dollar amount and just put a generic value, property value, in that area?” he asked.

Book said that with the exception of the side lot program, the policies allow for “tremendous discretion” on how to price properties.

“You're the owner, so you have the ability just like any property owner to sell it however you see fit as the smartest, and for most value, or whatever your goal is at the time,” Book said. “By doing a side lot program, that's the only area where it kind of takes away some of your discretion. Once you say it's a side lot, the price is set in the policy. 

“So the question is, do we want to get rid of the side lot program altogether and focus on the board having discretion, which they have already, to sell the property?”

Britton said he liked that option “better than restricting us” with the side lot regulations.

“If we have a property owner that's interested in a side lot, and we don't have a side lot program, we can still determine that at that time, what the property is worth to that owner,” Walker added.

Land Bank Coordinator Jason Johansen pointed out that they could then fall back on the current policy that has a minimum accepted price of $300. He said “we could raise that” as well if the board wanted, or as Book added, they could also “take that out altogether.” Book and Walker both said they liked the idea of having a “minimum number” defined.

"I think on a case-by-case basis, you can come across properties where we can determine [value] based off the acreage and where it's at,” Johansen said. “Hillsboro has zoning, so there's certain things where there may be a lot that might be buildable anywhere else in the county, but in Hillsboro, it may not be. We can make that determination, and the side lot program kind of holds us down.”

Daniels asked if they could limit the policy to not selling “a property for two-thirds less than the value of a vacant lot as determined by the county auditor's recent valuation of vacant property in that area.” Book said that would be similar to a “regular foreclosure process.

“I like that,” Book said. “We could get a situation where a piece of property may have lost value in something, like the auditor has it valued at $28,000 because there's a structure on it, but then we took the structure away, so now it really shouldn't be 28, it should be more like 11 or 12 [thousand dollars]. We'd have to wait for the auditor to do the reevaluation, although we can request that they do it on an expedited basis, on a case-by-case basis. 

“I just want to point out that that would maybe slow us down a little bit, but it's not a giant burden.” 

Daniels asked if an “exception” could be made in which they could “reduce it for a lesser amount” if the property does not sell within a certain window. 

“We probably should get rid of the side lot program,” Daniels added. “Every piece of property has some value.”

Walker agreed, pointing out that, for example, they have 41 structures they are looking to demolish with state funding that will change valuations.

Daniels asked Book “to draft an amendment to our bylaws that reflects” the feedback from the board.

“Maybe you can circulate that between the members, and we can think about it and make adjustments and have it before our next meeting, so that we can then act on it and move from there,” Daniels said.

As previously reported, at the board’s April meeting, another side lot issue was brought up when discussing the 6747/6749 Heather Moor Trail parcels in Paint Township, which are owned by the land bank and currently being cleaned up using state funding. A neighboring landowner who was in attendance at the April meeting said he was under the impression he would get “first choice” of the parcels. After a discussion, the board agreed that the Heather Moor parcels are developable land and to sell them as such.

At their May meeting, another neighbor was in attendance saying she was “the one who brought attention to these two properties.” Like the property owners in April, she said she had “put up with” issues at the parcels “for years,” and she alleged that “the ball kept getting dropped” in acquiring the parcels. (As previously reported, the land bank acquired the parcels through tax foreclosure.)

After she spoke for close to six minutes regarding the land bank’s policies and the slowness of property acquisition, as well as expressing concerns about various lots in the Rocky Fork Lake region, Britton responded that “there is a process” that the county has to go through. 

“We understand that there's a lot of issues in Highland County, and that's why we have the land bank,” Britton said. “We started it to try to help get some of this stuff done, but we're not going to do 200 or 300 [foreclosures] a year. We’re going to do as many as we can possibly do with the funding that we have.”

Daniels added that there are “other opportunities” for property owners at the lake with concerns about lots, such as working with their homeowners’ associations. 

“Those opportunities have been neglected for a long time,” Daniels said. “We have been looking into the possibility of how we, perhaps, as a land bank, as property owners down there, can end up with standing to help work and start working through some of those. Those things are just in the very beginning discussions between the treasurer, the land bank, the other people that are involved in this and how we can be involved. But I think we all recognize that there's problems that we need to be working on, and I think that we are.”

Regarding the land bank now having “standing” as a property owner at the lake, Daniels said, “It isn't going to happen today, and it isn't going to happen tomorrow, but hopefully, we get to a place where we can exercise some of the authority that we've got now that we have standing.”

In other discussion:

• Weather permitting, Johansen said that work on the final two properties on the replacement list for the Building Demolition and Site Revitalization Program (using $77,895 in remaining funding from the last state budget cycle) should be completed in the coming days.

“They will be seeding and strawing in the last two here in the City of Hillsboro tomorrow,” Johansen said. “It's just a little too wet today to do it. It'll be complete tomorrow. 

“We have until June to get our reimbursements drawn down and all the reporting in, so we're looking good there.”

One of the parcels that was cleaned up with this round of funding was 9955 U.S. 62 in Samantha (Penn Township), a property that is owned by the land bank. Johansen told the board that he has determined that the property does not have septic hookup.

“I've been talking with the Health Department,” he said. “We would have to acquire the two lots next to it, or at least the lot right next to it, that has the septic tank. The [previous] family owned all three, and tied in, we believe, all into the same septic tank.

“We don't have access to that, and we don't believe the lot is going to be big enough to get a septic tank on there and have enough for leach fields.”

Johansen added that if they don’t “have enough room to really do much there, we might have to start looking at maybe a side lot [deal] for that.”

As of Thursday, Johansen said they still have not received word from the state on their application for the 2024-25 Building Demolition and Site Revitalization Program grant. The HCLRC submitted 41 properties (18 properties in Liberty Township; six in Dodson Township; three each in Fairfield, Madison and Paint Townships; two each in Brushcreek Salem and Union Townships; and one each in New Market and Clay Townships) and is seeking both the $500,000 set-aside and an additional $150,000 from the state, committing a $50,000 match for a total of $700,000.

“At the Ohio land bank association conference at the end of April, they could just tell us that it'll be soon and they were actively working on it, so hopefully any day now, they should be coming out with that,” Johansen said. 

For those 41 parcels, Johansen said that asbestos surveys have been completed, and he shared a breakdown of which parcels had no asbestos, which needed abatement and which are “hot demos,” which are “too dangerous to abate” and will require an asbestos contractor to work alongside the demolition contractor.

Sixteen of the 41 parcels (eight in Liberty, three in Dodson, two in Fairfield and one each in Clay, Madison and Paint townships) need abatement, and six (two in Liberty Township and one each in Union, Salem, New Market and Paint Townships) are classified as hot demos, Johansen said. The list of hot demos was modified slightly from his April report, as he said a property on U.S. 62 was taken off and repealed with one on U.S. 50.

In addition to the asbestos issues with multiple parcels, Johansen called attention to two of the parcels on Main Street in Lynchburg as ones that are more involved and will likely come with a higher price tag. He said they “have adjacent buildings on each side” with all three buildings believed to “share an attic.” In response to a question from Walker, Johansen said they will also have to work with tenants and/or owners of adjacent buildings.

“When you tear down the building, the walls are going to be exposed,” Johansen said. “I’ve been in the building. It's not repairable, and if it was, the costs would be high associated with that. Both have asbestos, and I'm not a mold expert, but I believe there probably was some mold in there, too.

“I think getting those down would be great, but I am curious to see what the costs will be associated with tearing that one down.”

Johansen said he has added two parcels to the HCLRC’s running list of other possible properties to clean up if they have leftover funds again. The new additions are located on S.R. 753 in Madison Township and Blue Ribbon Road in Marshall Township, joining other previously identified properties on East Main Street in Hillsboro, North Shore Road in Paint Township and Orebaugh Road in Salem Township. Johansen said the S.R. 753 parcel was submitted by its new owners, who also own nearby property and said this building “doesn’t look salvageable.” 

For the other state grant program — the Brownfield Remediation Program, for which the county has a $1 million set-aside — Johansen said they also have not received official word yet from the state on the status of their application.

“Matt, Lauren and I went to the annual Brownfields Conference in Dublin, and it was pretty informative,” Johansen said. “They mentioned that we might be getting brownfields into the state budget, which would be very, very beneficial, and we won't have to worry too much about whether we can get other projects done that we've been wanting to get done for some time.”

Wagner explained that there has been a House bill drafted proposing to “make the brownfield funding a permanent” part of the state budget.

“That's supposed to be derived from the old Clean Ohio program that was so successful several years past,” Wagner said. “The funding source is the liquor tax.

“They've got support from both Republicans and Democrats, so it's bipartisan, and there's a lot of excitement for that. I know it certainly would help Highland County as well with projects in the future, so there'll be more to come on that in terms of the opportunity for us to provide letters of support to the House and the Senate.”

Also discussed at the Ohio Brownfields Conference, according to Wagner, was a “big push to help land banks get the funding source,” through other legislation, to clean up existing properties and “create some affordable living for a lot of residents.

“It's pretty exciting times,” Wagner said. “They really recognize that we are 224,000 [housing] units short right now in Ohio.” 

• The board voted 4-0 to move forward with potentially accepting a donated parcel on Elmhurst Trail in Paint Township. The land is valued at $12,600, and over $17,000 in back taxes are owed on the property. Johansen said the parcel also includes a “single-wide mobile home” that he does not think “would be salvageable. 

“When the grinder was put in back in the ’90s, I believe, it was $4,140.84 to do that,” he said. “There were upgrades to the sewer system in 2014, which was $227.12, so if we do acquire this property, we would be responsible to pay for those two expenses, which is $4,367.96. The rest as a land bank can be cleared for us.”

Johansen said he believed the property could “be a good opportunity for the land bank,” as the land has value and it is in a subdivision near the lake.

“All in, I think we wouldn't spend more than $8,000, $9,000,” he said.

• The board approved the finance report for April as presented by Johansen. He reported a beginning balance of $408,558.46 and ending balance of $428,856.08 for the month, with the account receiving three deposits and 12 debits for the month. They still have five pending reimbursements from the Department of Development as well, Johansen said.

“We had our independent financial review for 2023 completed by Millhuff-Stang,” Johansen added. “They also did our Hinkle filing to the Auditor of State for us.” 

• The board authorized Johansen to pay a list of unpaid bills, which included legal and accounting fees; utility bills; reimbursements to Johansen for travel expenses, as well as his salary; and contractor invoices.

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