Even before federal indictments shut down the Indy Land Bank, the city of Indianapolis risked running out of money to maintain roughly 1,200 properties in its inventory.
The problem hasn’t disappeared, Department of Metropolitan Development Director Adam Thies said, and he’s plowing ahead with plans to dispose of the properties with help from the private, not-for-profit Land Bank of Indianapolis.
“We were going to run out of mowing and boarding money,” Thies told the Metropolitan Development Commission June 5.
The city relies on its unsafe building fund, which collects fines for code violations, to maintain the land bank properties, each one costing $400 a year. That adds up to $480,000—a significant drain on the fund, which stands at $900,000, according to the Department of Metropolitan Development.
Katy Brett, the not-for-profit’s recently hired executive director, said she anticipates working with the city to issue a request for qualifications aimed at charitable and for-profit entities interested in acquiring properties. Brett said teams responding to the RFQ would have to provide details about their construction partners, investors and intended buyers.
State law gave the Indy Land Bank the unique ability to acquire tax-delinquent property from Marion County, but the law also limits the city in its options for disposal, Brett said. When it comes to land, the city must issue a request for proposals, which requires a market appraisal for each parcel and would make bid price a deciding factor, she said.
Community development corporations want to know who is going to own or manage property in their neighborhoods, Brett said, and the RFQ process will create that level of transparency. She hopes the request will go out this fall.
Thies said he’s counting on the Land Bank of Indianapolis to turn around a large number of properties. The board is stacked with redevelopment experts, he noted, and it includes a bipartisan selection of city-county councilors—Democrat Vop Osili and Republican Jeff Miller.
The department granted the not-for-profit $111,000 in federal Neighborhood Stabilization Program funds late last year.
The Land Bank of Indianapolis’ chairwoman is Tara Seeley, a senior grants officer at Central Indiana Community Foundation who works closely with neighborhood-based organizations. The vice chairman is Bill Taft, executive director at Local Initiatives Support Corp. in Indianapolis. Jeff Roeder, a former aide to Mayor Greg Ballard who was recently appointed as deputy director of metropolitan development, also is on the board.
Long before U.S. Attorney Joe Hogsett last month unveiled allegations of kickbacks and bribery at the Indy Land Bank, the city’s operation had gained a reputation as opaque and ineffective at neighborhood redevelopment.
“That’s part of the reason the nonprofit was formed,” Brett said of the Land Bank of Indianapolis, which she said is likely to rename itself. “There was frustration.”
The Indy Land Bank deeded one property that was supposed to go to the Englewood Community Development Corp. on the near-east side to Homeless and Re-Entry Helpers, a shaky not-for-profit that served as a straw buyer for real estate investors, said Joe Bowling, executive director of the CDC.
The situation was straightened out, but he said, “You could certainly tell there were some problems.”
Other CDCs have successfully rehabbed land bank properties. “Literally, blocks are different now because we were able to connect with partners to rebuild an affordable community,” said Leigh Riley Evans, executive director of the Mapleton-Fall Creek Community Development Corp.
Mapleton-Fall Creek bought 20 houses in 2011 and is close to selling the last one, Evans said.
The Indy Land Bank took on most of its inventory in 2010, and hundreds of properties were placed on hold for CDCs to acquire, Thies said. He met with the directors in late April to let them know the city didn’t have enough money to hold those properties indefinitely. (The city has a list of 277 parcels reserved for CDCs, but the most up-to-date information may have been seized by the FBI, along with the rest of former director Reggie Walton’s records, spokesman John Bartholomew said.)
Thies, who became DMD director last fall, said he figured the Indy Land Bank could continue to sell property in small batches while he partnered with the Land Bank of Indianapolis on a large-scale solution.
Part of that solution was to push for legislation, which failed, that would give municipalities explicit powers to form land banks, and presumably make it easier for an organization like Land Bank of Indianapolis to acquire property. The current Indy Land Bank was created in 2007 under a state law that allows counties to form land banks.
Thies said he’s not sure what’s next for the Indy Land Bank.
“We don’t have a perfect, wonderfully baked answer to it,” he said.•