Officials study how to use land-bank law

April 9, 2010 at 12:00a.m.

Associated Press

COLUMBUS

Officials in some of Ohio’s larger counties slowly have begun sizing up the new state law that gives them authority to take over and rehabilitate foreclosed and abandoned properties before returning them to private ownership.

The legislation expands the use of so-called land banks outside of Cuyahoga County, which won the state’s blessing to launch a pilot program last year to deal with huge foreclosure problems in Cleveland and its near suburbs.

The county’s program, funded through interest and penalties on delinquent taxes, so far has banked scores of vacant properties.

The new law, taking effect in early July, allows nearly half the state’s counties — those with populations of at least 60,000 — to create nonprofit organizations with the ability to acquire abandoned properties and maintain, renovate, demolish or resell them.

“Vacant properties can eat away at the fabric of neighborhoods,” Gov. Ted Strickland said before signing the law this week.

He said the law would help counties combat the decay that can result from absentee speculators buying up foreclosed properties and flipping them to new buyers without making improvements.

“We believe that communities will be benefited, that blighted neighborhoods will be improved,” the governor said.

Local officials reacting cautiously to the new law include Franklin County Treasurer Ed Leonard in Columbus, who said he wanted to explore whether it was something the county could afford to do.

“It entails borrowing significant sums of money,” Leonard said, adding that relying on interest and penalties from unpaid real estate taxes, as Cleveland has done, may not provide enough revenue to pay off any land bank debt, interest and program costs.

In Dayton, Montgomery County Treasurer Carolyn Rice said she sees a land bank as merely one tool for tackling the problem of foreclosed properties that have been left behind.

“My preference is to start off small and get it right rather than start off by biting off too much to chew,” she said.