Butler County land bank halfway to $2 million grant quota

$75M in grant money used to demolish more than 14,000 Ohio properties.

By Laura A. Bischoff and Denise G. Callahan

Staff Writer

BUTLER COUNTY — 

    More than 14,600 dilapidated, abandoned properties were demolished over the past two years using $75 million in one-time grant money from Ohio Attorney General Mike DeWine, which helped local communities accelerate efforts to clear blighted buildings from neighborhoods.

    DeWine said in many cases, the abandoned houses and buildings had become magnets for crime, drugs, vermin and arson.

    “By tearing down blighted properties through our program, we helped Ohio communities restore property values, re-generate economic development potential and ensure that citizens and families have a safe place to live,” DeWine said on Friday when he issued a close-out report on how the money was spent.

    After the buildings were knocked down, the vacant lots were turned over to local land banks, sold to adjacent neighbors, converted into parks, sold for redevelopment or remain under the previous owners, who now face liens for the demolition expenses.

    In some cases, such as in Franklin in Warren County, fire departments used the soon-to-be demolished properties for training sites.

    Under the grant, Butler County spent $4.6 million razing 511 ailing structures. In Warren County, 47 buildings came down at a cost of $495,009.

    The high number of banished blighted buildings, about 300 in Middletown, is part of the reason that city is having trouble trying to come up with their quota for a new federal grant.

    “A lot of it has to do with the fact we were so successful in the last trip through, that there weren’t a lot of properties right at the front of the door in the pipeline to move through the pipeline,” Middletown Law Director Les Landen said. “I do not expect we are going to make it to the original target number of 20.”

    Hamilton and Middletown must acquire 40 blighted properties collectively by March 31 and another 40 by September, in order to keep a $2 million Hardest Hit Fund federal grant.

    Tim Carlson, the attorney for the Butler County land bank, said Hamilton, with the next two closings, will have 19 properties in hand and Middletown has culled three. He said he believes Hamilton will end up acquiring about 30 buildings and he is more optimistic than Landen.

    “I think what’s going to happen is Hamilton may find some additional properties and then Middletown will continue working on them, so we can meet our goal of the 40 properties,” he said and then addressed the likelihood of reaching the quota. “I certainly hope so, we’re all working very hard to get it done.”

    A number of factors have contributed to what has now become a race against time. Hamilton Assistant Law Director Kathy Dudley said the county is three to six months behind other land banks because they were not awarded a grant in the first go-around. After the county commissioners agreed to siphon 1 percent of delinquent tax and assessment collection funds (DTAC) to bolster the land bank, giving it a source of income, they were successful in their second application for federal funds.

    It wasn’t until after the county commissioners said they would allow expedited foreclosures last month, for this specific grant, that Middletown began picking up properties. County Administrator Charlie Young said the commissioners have been loathe to sidestep the sheriff sale process, but they also don’t want the county to lose out on $2 million to get rid of blight.

    “We have been conservative in approaching this because of the concern for property rights,” he said. “There is kind of a tension between the desire to be able to move very quickly, and the desire to protect property rights for individual property owners.”

    Officials said the county will not be granted more time by the Ohio Housing Finance Agency (OHFA) to acquire properties. The OHFA estimated it takes $25,000 per property to banish blight and Landen said they will likely just subtract dollars from the award as a sanction for not meeting the deadline.

    “My understanding is there will still be money available for Butler County,” Landen said. “The amount that comes to Middletown may be a bit less simply because we don’t have as many properties as we originally suspected.”

    Butler County formed its land bank two years ago to deal with blighted buildings, after DeWine provided the $2.6 million in Moving Ohio Forward funds. The cities of Hamilton and Middletown each gave $1.1 million to the land bank fund as well.

    In February 2012, 49 state attorneys general settled with five of the nation’s biggest mortgage service organizations over foreclosure abuses and fraud. Ohio received $526 million — $306 million for loan modifications, $50 million in cash payments to foreclosed borrowers and $93 million to DeWine’s office to address foreclosure issues.

    DeWine took the unusual step of devoting $75 million of the money to demolition. (Four other states earmarked a combined total of $20.5 million of the settlement money for demolition efforts.) Counties, which provided matching money for any grant beyond the first $500,000, chipped in $44 million.

Statewide, $119 million was spent in settlement and local money to raze 14,608 units at an average cost of $8,149 per unit.