Opinions divided on proposal to create Pittsburgh Land Bank

Some fear residents would have no say on vacant properties


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Looking at the facade of the A-frame home on Tioga Street, nothing seems amiss except for the plywood across the door spray-painted in red: "NO TRESPASSING BY ORDER OF POLICE."

But take a peek around the side, and evidence of deterioration is dramatic. The beige vinyl siding covers a wood facade where the elements have worn away generations of paint. The edges of the roof have deteriorated, and the backyard is a tumble of dead foliage that reaches shoulder-high. A cluster of leaves crowds one window.

The Homewood house is owned by what has been described as the city's worst slumlord: the city itself.

When you count all of the city's holdings, it owns 11,500 parcels in all -- including actively used facilities such as firehouses, office buildings and parks plus vacant lots that the city acquired when the owners fell into delinquency on their taxes. The city Planning Department estimates about 7,300 of the parcels are vacant -- some with crumbling structures, some just empty lots.

Many are nothing but a drain on city finances and -- when they go unused and unmaintained -- a blight on the community. They represent a double whammy on the city's coffers: They generate no property tax revenue for the city, and the city shoulders the financial burden for maintaining them. They become illegal dumps and fertile grounds for weeds. Empty houses become refuges for raccoons and rats, criminals and contraband.

The city owns far more of these parcels than it would like, but the process of turning them over to responsible buyers or for productive use is mind-numbingly slow and rife with inconsistencies. That's where Councilwoman Deborah Gross believes a land bank -- a quasi-governmental body dedicated to turning over the city's land for productive use -- could help.

Earlier this year, she sponsored legislation to create the Pittsburgh Land Bank, which would be independent of the city with its own staff, its own funding and a governing board appointed by the mayor and city council members.

Land banks have existed for decades elsewhere, lauded as effective tools to ameliorate blight and lure developers with the promise of a smoother, more efficient process. But they only became possible in Pennsylvania in 2012, when the state passed a land banking law. Since then, Philadelphia has become the largest city in the country to start a land bank, but its nascent efforts are too early to judge.

Ms. Gross said the goal of the land bank is "to do a better job of getting land back in community control."

But despite land banks' reputation as a useful tool to battle blight, Ms. Gross' legislation has been met with vocal opposition in the very corners of the communities with high levels of vacancy and abandonment. Councilman Ricky Burgess has described the legislation to his constituents as a "land grab." Two public meetings held on the topic saw community members packing council chambers, many of them speaking in favor of land banking but against Ms. Gross' version of it. One public hearing was so packed that those who wanted to speak were forced to line up outside the door.

The opponents' principal concern is that the land bank would sell the land without their say. Some also were frustrated that Ms. Gross -- who has emphasized the bill is a work in progress -- wrote the legislation without first consulting the communities most affected by vacancy and blight.

On Wednesday, Mr. Burgess and Councilman R. Daniel Lavelle, who represent the city's two districts with the most vacant land, announced an effort to overhaul the bill. They want to rename the land bank, expand the board who controls it to include appointees by council members with the most vacant land and -- the most controversial provision -- allow council members to veto transactions by the land bank.

Mr. Lavelle, who originally was recruited to be a co-sponsor of Ms. Gross' bill, said he won't vote for land bank legislation that doesn't include a provision for council approval. But the land bank bill was created in large part to take politicians out of the process, both for efficiency and to create a system with more stability and consistency.

"The worst proposal is letting politicians call the shots," said Mayor Bill Peduto, who calls land banking "one of the most significant tools to help improve blighted communities."

The split, then, is a philosophical one: If everyone agrees the community should drive development, who should speak for the residents?

A slow process

In Pittsburgh, proponents of the land bank say it could serve as a solution to the city's current process to turn its tax-delinquent and blighted properties over to useful hands. The process now is rife with paperwork, mandatory wait periods and trips to court. It takes a year on average to process a parcel, said city treasurer Margaret Lanier, who supervises the city's real estate division.

Last year, the city completed 208 sales, barely making a dent in the thousands of parcels the city has acquired over the years through treasurer's sales. Some of the parcels in the inventory are being held for the Urban Redevelopment Authority or community development corporations, but much of it is land the city is unable to sell. The process is also set up so that council members can effectively veto a transaction but only after an individual has gone through a months-long process of purchasing property.

That's what happened to Bhoop Sehrawat, an Upper St. Clair businessman who owns properties throughout the county and was interested in buying up much of a block on Webster Avenue in the Hill District. Mr. Lavelle voted in 2011 for a resolution to sell 17 parcels that were bound for Mr. Sehrawat's company, Rattan Real Estate Trust. But when Mr. Sehrawat went through the process to buy two more parcels on the same block -- one of which was in between his other purchases -- Mr. Lavelle deleted the properties from a resolution to approve the sales.

When Mr. Sehrawat inquired with the real estate department, he was told to call Mr. Lavelle, who then directed him to meet with Marimba Milliones, executive director of the Hill District Community Development Corp. Ms. Milliones said Mr. Sehrawat refused to divulge his plans for the property so that she could determine whether it fell in line with the neighborhood's community plan.

"For a community, how frustrating is it for us to have a building [constructed] when we have no idea what it's going to be?" she said.

Mr. Sehrawat insists he could not develop plans for a gap-toothed collection of parcels. Both sides were left in a stalemate.

"I cannot go to an architect with fragmented lots and say, 'Give me a plan,' " he said. "They want to twist the arm of the investor and that's what I concluded and that's why I gave up."

Mr. Lavelle said he relies on community development corporations to vet potential buyers. But it's entirely up to council members to decide who gets to buy property in their district, and they're not required to provide a reason when they say no. This undoubtedly leads to inconsistencies across districts, one of the reasons why proponents of Ms. Gross' bill want politicians out of the process.

And while the city holds onto land, vacant structures fall into disrepair and empty lots become more untenable. While the city Public Works Department performs some maintenance, the city also contracts with nonprofit City Source Associates, which cleaned up about 1,600 city properties in 2013. Executive director Bill Harlak called the task of maintaining vacant city property "insurmountable," so the city instead cleans up lots largely in response to complaints.

Ms. Gross believes a land bank would be a better steward of its holdings because it would be the bank's "full-time job to manage these properties." And it could relieve the city of the financial burden and the liability of owning so many properties. The state's land bank law would give the city some tools it doesn't have to catalyze the sales process. It can, for example, process "quiet titles" for properties in bulk.

Ms. Gross is counting on funding from nonprofits and foundations to get the land bank started and emphasized that it will largely be up to the board to decide how to get financing. But state law also allows the land bank to take a portion of penalties and interest owed on a piece of tax-delinquent land.

A land bank divided

Soon after Ms. Gross introduced her bill, Mr. Burgess sent out letters to 10,000 constituents describing the bill as a "land grab." At a packed public meeting, he told them "the land bank could take your house."

"They could absolutely gentrify a third of Homewood without anybody having any input," he said. "I think it's dangerous."

The land bank would be no more empowered to evict someone from their home than the city is now. The land bank legislation also contained extensive protections for owner-occupied properties, requiring land banks to design payment plans if it attempted to take property through a treasurer's sale.

It also required the governing board -- four of whom would be appointed by the mayor and three by city council -- to abide by community plans when looking at prospective buyers. Ms. Gross, too, said she believed the land bank would not acquire any new property until it was done with the city's massive inventory, but that was not spelled out in the legislation.

In conjunction with Councilman Corey O'Connor, she is now working on another set of amendments to increase the size of the board and offer more protections to owner-occupied homes. She also plans to add a provision that would require council to sign off on whatever policies the interim land-banking board develops.

But Mr. Lavelle said the legislation gives too much power to an unelected board. How could he be sure that the board would represent the community's interests? What if the land bank spurred development that priced out his district's residents? In his view, there were too few protections for the people the land bank purported to help.

"The bill essentially said, 'Pass it and then trust us,' " he said. "We've seen what happens when we trust, when we don't put checks and balances into the system."

For the Hill District, still reeling from the construction of the Civic Arena, which wiped out whole neighborhoods and severed the community from Downtown, trust is still hard to come by.

"The Lower Hill is what happens when we trust," Mr. Lavelle said.


Moriah Balingit: mbalingit@post-gazette.com, 412-263-2533 or on Twitter @MoriahBee.

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