Posted: 7:00 a.m. Tuesday, May 26, 2015

Land bank may commission cost/benefit analysis

By Denise G. Callahan

Staff Writer

BUTLER COUNTY — 

The Butler County land bank is considering commissioning a cost/benefit analysis, perhaps to be performed by students at Miami University.

There was a brief discussion at the land bank meeting last month and now recently named Executive Director Mike McNamara is taking the thought to the next level. The land bank in Cuyahoga County has released a study that showed in moderate to high functioning markets the benefit to banishing blight ranged from $4.27 to $13.45 per dollar invested in demolishing bad buildings.

“Just over 6,000 demolitions were completed over the study period costing roughly $56.3 million. Findings estimate total demolition benefits at $78.9 million. Suggesting a $22.6 million benefit attributed to demolition activity,” the study reads. “Benefits from demolition activity were shown to accrue primarily in high to moderately functioning markets. Conversely, findings suggest that little real estate equity return is available from demolition activity in weak real estate markets.”

McNamara said he plans to reach out to Hamilton’s Economic Development Director Jody Gunderson — who launched the idea — to see if they can put a proposal together. However he said the land bank doesn’t have a very big budget so alternate funding, possibly from the Local Government Innovation Fund, will also have to be unearthed.

With $2.7 million it received in Moving Ohio Forward grants from the state, Butler County formed a land bank two years ago to deal with blighted buildings. The cities of Hamilton and Middletown each gave $1.1 million to the land bank fund as well. Approximately 500 blighted buildings have been torn down through the land bank program.

Butler County commissioners agreed last summer to siphon 1 percent of delinquent tax and assessment collection funds (DTAC) to bolster the land bank and open up services for the entire county. DTAC funds are late payment penalties on real estate taxes. Nix originally estimated the 1 percent would garner about $155,000, but the commissioners approved a $175,000 transfer to the land bank a few weeks ago.

The cities are now in the process acquiring blighted buildings to qualify for $2 million from the Hardest Hit federal program. The new program will allow the cities to down about 100 additional homes. McNamara said in Hamilton 215 properties were demolished with Moving Ohio Forward monies and 45 have been re-purposed. Middletown up until point has not assumed ownership of any properties because officials said the city shouldn’t be in the real estate business, but McNamara said that is about to change.

“Middletown doesn’t have that ownership interest to where they can re-purpose the properties right now. But under our other funding programs Middletown is starting to take ownership of the properties they are acquiring now, so they are going to have more of an interest in building those relationships and re-purposing the properties,” he said. “I have met with Middletown and they do want to get their neighborhoods looking good.”

Back in Hamilton, the city has demolished a blighted property on Hanover Street adjacent to St. Joseph Catholic Church so the church can add more parking, they banished a brothel/drug house that was next to a playground and a Habitat for Humanity house is rising up in the 300 block of 10th Street.

John “Doc” Saurber, field operations manager Habitat, was at the two-story, three bedroom house under construction last week and he said the land bank’s work has really benefited the charity.

“We get some properties from other communities as well,” he said. “But Hamilton and Butler County have been really good to work with.”

Middletown has a direct benefit project in the works right now also. Foreclosure proceedings have begun on a wreck of a property in the 3400 block of Tytus Avenue next to a veterinarian business All About Pet Care, owned by Dr. Matthew Heller. Middletown officials have said Heller wants the mustard yellow home razed — he has offered to pay for the demolition — so he can remove the eyesore and expand. All the land bank has to do is clean the title on this project.

Heller wrote a lengthy letter to the city asking for help. He noted multiple code violations and safety hazards and said his clients and others are constantly asking about the “scary” residence next door. He said he has tried to work with the owner to no avail.

“I am sure that you can understand how frustrating this situation can be for me and my business,” the doctor wrote. “I want nothing more than to have a business which myself, my employees and my clients can be proud of and are not distracted by dilapidated buildings surrounding us. Most importantly, I feel that this property is not only a poor representation of our community , but also unsafe for it.”

Heller also noted the National Association of Realtor maintains “an eyesore can shave 10 percent off the value of a nearby listing.” The Cuyahoga study showed ridding functioning markets of blight has the biggest return on investment, a Butler County study might not show as much bang for the buck because they have been concentrating mainly on bad areas.

“The whole concept is we don’t want to get involved in areas where the market will take care of itself. That’s always been the board’s attitude as well as the commissioners,” he said. “The directive is we go after the stuff nobody else wants and try to make it marketable again by cleaning the title and even demolishing the structures, so there is nothing standing in the way of somebody getting back into it.”

As for the cost/benefit study McNamara said he would love to work with the university if they are willing.

“I haven’t used Miami for anything in the past,” he said. “But this is a new open chapter. I’m willing to write it however it’s willing to be written.”

Utilizing Miami students for projects isn’t new either. The vet board just received it’s marketing study from a group of students in the Pi Sigma Epsilon marketing and sales fraternity. Middletown has contacted the university in Oxford to see if they want to help market the county’s airports. And County Administrator Charlie Young said the county had students help them do research on their tax increment financing districts.

“Miami is an incredibly valuable resource. Not only do these kind of interactions pay dividends for the government agency that Miami is servicing, but it gives these students valuable experience,” he said.

Madison Weber, who headed the team from Pi Sigma Epsilon, said the real life experience was awesome.

“This is a great way to apply things that we learn, both theory based and in the classroom, to real actual experience,” she said. “It’s a better way to understand how those principles apply to real life.”