A lawsuit has been filed against the Kent County Land Bank, claiming that it violated state law. At issue is the recent move by Kent County officials to block vacant properties from sale, and instead transfer them directly to the land bank.
The Kent County Land Bank requested that more than 40 vacant properties be blocked from sale for reasons such as "...[keeping] undesirable business out of neighborhoods," and "[funding] the Land Bank."
Some of those properties are in good condition and would have brought in hundreds of thousands of dollars in sales revenue.
The state law in question requires that vacant, tax-delinquent properties be put up for tax auction (where private individuals and businesses can bid on them) before being transferred to a land bank. However, state and local governments (excluding land banks) have the right to acquire any of these properties before they go to tax auction.
Using this power, Kent County government officials acquired more than 40 properties before tax auction in order to immediately transfer those properties to the land bank. This allowed county and land bank officials to circumvent state law.
This move is only necessary if private individuals and businesses wanted to buy those properties. Kent County officials blocked the sale of vacant property to people who might have done something productive with it.
The Kent County Taxpayers Alliance, which has been a vocal critic of the land bank, announced the lawsuit today. "Taxpayers are getting the short end of the stick when the county is supporting a new bureaucracy that engages in property speculation, cronyism, and questionable legal practices,” said Jeff Steinport, a project manager with KCTA.
Steinport is referring to the appalling fact that the land bank's adventure in property speculation is paid for by Kent County taxpayers. The land bank paid nearly $500,000 to block those properties from sale, and taxpayers will likely be on the hook for upkeep and renovation of those properties.
The alternative in Kent County is clear: Let private individuals and businesses take on the risk of purchasing vacant properties. The end goal is to get vacant, tax-delinquent property back into private use. Kent County's real estate market has a track record of success; land banking in Michigan (and elsewhere) does not.