Landbank Authority To Face Council Committee After KyCIR Report

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A vacant Vermont Avenue house that was sold through the Landbank Authority.

A Metro Council committee wants answers about the Landbank Authority’s process for selling vacant and abandoned properties and why many of these properties stay that way — even after being sold to buyers who promise renovations and maintenance.

The agency’s director will appear before the council’s Community Affairs and Housing Committee on Wednesday, three weeks after a report from the Kentucky Center for Investigating Reporting found nearly a third of the properties sold by the land bank since 2010 were vacant and in violation of the city’s property maintenance code.

“I don’t think it’s done the best job,” said Barbara Shanklin, a Democrat and chair of the committee.

Since 2010, the land bank sold 316 properties — many to developers or property managers who promised to rehabilitate derelict houses and maintain lots, according to an analysis of city data by KyCIR.

Some buyers failed to make good on those promises and have racked up thousands in property maintenance fines for uncut grass, unsafe buildings, and trash. And now, city crews are tasked with maintaining some of these properties, which costs taxpayers.

It’s unclear just how many former Landbank Authority properties are under city care, however. City officials did not fulfill an Open Records Request seeking detail about properties that are mowed, cleaned or boarded by city crews.

Shanklin said the KyCIR report’s findings are reason for concern. She said the land bank should sell properties to people who live in the neighborhoods most beset by blight rather than to investors seeking profits. Additionally, she said the agency should ensure buyers’ promises are kept.

“Nobody wants a lot of rental property that is not maintained in their community,” she said. “We want home ownership.”

She questions why the land bank would sell properties to investors “when there is an opportunity to sell them to people who would take pride in them, fix them up, and get the neighborhoods back together.”

Laura Grabowski, the director of the city’s Vacant and Public Property Administration, which oversees the Landbank Authority, offered little response to KyCIR’s initial findings.

“I guess my response is, we need to look into what these properties are, what the circumstances are,” Grabowski said in an interview last month. “The thing about vacant properties is that there is a different story for each case.”

A spokesman for her office did not respond to a request for comment on this week’s council committee meeting.

Councilman Scott Reed, a Republican from northeastern Jefferson County, said council members need to “ask a lot of questions” about the land bank program.

“This is not a good deal to the taxpayer when we have to pay Public Works to mow lawns and board up homes,” he said.

Reed said he’ll request Landbank Authority staff to appear before the council’s Government Oversight, Audit and Ethics Committee, of which he is vice chair, in the coming weeks.

“We need to get to the bottom of what’s going on,” he said. “I don’t think it’s fair to the neighbors.”

Still vacant after sale

The Landbank Authority is comprised of a three-member board representing the three taxing entities within Jefferson County: the city, the state and the Jefferson County Public School district. It was created in 1988 and oversees the acquisition and disposition of vacant and abandoned properties.

The agency acquires many properties through foreclosure. Last fiscal year the agency initiated 162 foreclosures on properties Grabowski called “dead property” — meaning owners have died or gone missing and no one seems to be maintaining the lots or houses.

During that same period, the land bank sold 125 properties, which was praised by Louisville Mayor Greg Fischer as a “record-breaking year.”

“Each sale is a win for neighbors and for public safety,” he said in a press release in July.

The biggest purchaser of land bank properties since 2010 is Mirage Properties LLC, which is owned and operated by James M. Burkhead III. Burkhead has purchased 31 properties from the land bank, many of them vacant and abandoned houses. He’s promised to renovate the structures and add them to his rental portfolio. Burkhead said he manages some 800 rental units in western Louisville.

But many of the properties Burkhead purchased were still vacant earlier this month and few showed any signs of renovation work.

And now council members are questioning the success of the program that’s designed to remove blight from neighborhoods.

There are some 5,120 vacant or abandoned properties in Louisville, according to a March report from Grabowski’s office.

Council president David James represents District 6, where more than 6 percent of parcels are considered vacant and abandoned. He questioned what city officials plan to do with properties sold through the land bank that continue to sit vacant and unused.

“It’s a matter of whether or not we’re going to hold people accountable,” he said. “This affects our quality of life.”