COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES
URBAN AFFAIRS COMMITTEE
PROGRESS REPORT ON PENNSYLVANIA LAND BANKS
HARRISBURG, PENNSYLVANIA ROOM 205, RYAN OFFICE BUILDING
TUESDAY, NOVEMBER 14, 2017
BEFORE: HONORABLE MARK K. KELLER, MAJORITY CHAIRMAN HONORABLE ALEXANDER T. CHARLTON HONORABLE BECKY CORBIN HONORABLE BARRY J. JOZWIAK HONORABLE HARRY LEWIS, JR. HONORABLE CHRISTOPHER B. QUINN HONORABLE ERIC M. ROE HONORABLE GREG ROTHMAN HONORABLE JAMES R. SANTORA HONORABLE MARTINA WHITE HONORABLE VANESSA BROWN HONORABLE CAROLYN COMITTA HONORABLE MADELEINE DEAN HONORABLE ISABELLA FITZGERALD HONORABLE CAROL HILL-EVANS HONORABLE BRIAN KIRKLAND HONORABLE CHRISTOPHER RABB
Pennsylvania House of Representatives Commonwealth of Pennsylvania 2
1 COMMITTEE STAFF PRESENT:
2 CHRISTINE GOLDBECK MAJORITY EXECUTIVE DIRECTOR 3 ASHLEY SHEAFFER RESEARCH ANALYST 4 KORI WEIKLE LEGISLATIVE ADMINISTRATIVE ASSISTANT 5 JON CASTELLI 6 MINORITY EXECUTIVE DIRECTOR
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24 Ti ffany L . Ma st • Ma st Re porting 25 ma streporting@gmail . com ( 717) 348- 1275 3
1 I N D E X
2 TESTIFIERS
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4 NAME PAGE 5 FRANK S. ALEXANDER 6 CO-FOUNDER AND SENIOR ADVISOR SAM NUNN PROFESSOR OF LAW...... 8 7 HERBERT WETZEL 8 EXECUTIVE DIRECTOR...... 15
9 ANDREW FRENCH EXECUTIVE DIRECTOR...... 41 10 GEORGE KELLY 11 DIRECTOR...... 52
12 AN LEWIS EXECUTIVE DIRECTOR...... 70 13 PAT MACK 14 DEPUTY DIRECTOR...... 79
15 WINNIE BRANTON PROGRAM MANAGER...... 90 16 RYAN KUCK 17 EXECUTIVE DIRECTOR...... 107
18 AARON SUKENIK EXECUTIVE DIRECTOR...... 115 19
20 SUBMITTED WRITTEN TESTIMONY 21 * * * 22 (See submitted written testimony and handouts online.) 23
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1 P R O C E E D I N G S
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3 MAJORITY CHAIRMAN M. KELLER: Well, good
4 morning, folks. Thank you so much for being
5 here.
6 I'm kind of a stickler for starting on
7 time. I'm four minutes behind already. But
8 anyhow, I want to say welcome to the members and
9 testifiers and those of you that have come out
10 today to the House Urban Affairs Committee
11 Progress Report on Land Banks.
12 I would like to take this time to also
13 let the members introduce themselves, and we'll
14 start to my far left.
15 REPRESENTATIVE ROTHMAN: I'm
16 Representative Greg Rothman, the 87 District,
17 Cumberland County.
18 REPRESENTATIVE LEWIS: Representative
19 Harry Lewis, Chester County, 74th District.
20 REPRESENTATIVE C. HILL-EVANS:
21 Representative Carol Hill-Evans, 95th District.
22 REPRESENTATIVE FITZGERALD: Good
23 morning. Representative Isabella Fitzgerald,
24 203rd District.
25 EXECUTIVE DIRECTOR CASTELLI: Jon 5
1 Castelli, Executive Director of the Democratic
2 staff.
3 MAJORITY CHAIRMAN M. KELLER: Of course,
4 I'm Representative Mark Keller.
5 EXECUTIVE DIRECTOR GOLDBECK: I'm
6 Christine Goldbeck, and I'm the Executive
7 Director for the Committee on the Republican
8 side.
9 MS. SHEAFFER: I'm Ashley Sheaffer. I'm
10 the Research Analyst for the Committee on the
11 Republican side.
12 REPRESENTATIVE QUINN: Representative
13 Chris Quinn, 168th Legislative District.
14 REPRESENTATIVE CHARLTON: Representative
15 Alex Charlton, 165th Legislative District,
16 arrived at 8:55, Mr. Chairman.
17 REPRESENTATIVE SANTORA: Jamie Santora,
18 163rd District, Delaware County.
19 REPRESENTATIVE CORBIN: Becky Corbin,
20 155th District, Chester County.
21 MAJORITY CHAIRMAN M. KELLER: Martina
22 White.
23 REPRESENTATIVE WHITE: Yes, Martina
24 White, here.
25 MAJORITY CHAIRMAN M. KELLER: Very good. 6
1 Vanessa.
2 Vanessa, do you want to just introduce
3 yourself please.
4 (UNIDENTIFIED PERSON NOT SPEAKING INTO
5 MICROPHONE.)
6 MAJORITY CHAIRMAN M. KELLER: All right.
7 Well, thank you all for being here again. I
8 appreciate it.
9 If Chairman O'Brien is watching, he had
10 a procedure done yesterday and was unable to
11 make it with us today. Our thoughts are with
12 you, Mike. And hopefully you have a quick
13 recovery. Unfortunately, he couldn't be here
14 with us, but he sends his regards.
15 Also, I want to mention, in the audience
16 with us is a past chairman of this Committee. I
17 thank him for being here, former member
18 Chris Ross.
19 Chris, thanks so much for being here.
20 Also, just coming in the room is
21 Chris Rabb. Chris, thanks for coming.
22 You know, just to throw this out here,
23 being a non-session day, to have this many
24 members come to a hearing is kind of unusual. I
25 will say it that way. And I'm very pleased that 7
1 the interest is there for the members to come
2 out and listen to what we have.
3 You know, the Land Bank Law, Act 153 of
4 2012, is five years old and has been around the
5 State in counties and communities large and
6 small. It provides to be a successful way to
7 fight blight and to restore properties and get
8 them back into productive use and on the tax
9 rolls.
10 Today, we're going to hear from the
11 experts, Professor Alexander, who helped
12 Pennsylvania tailor its law and who spent a lot
13 of time in our Commonwealth helping to educate
14 this Committee and people around the State about
15 how to start and operate land banks.
16 We are honored, Professor, to have you
17 here with us today.
18 We also are going to hear from folks in
19 the field who are putting the law to good use in
20 their communities. Thanks to each of you for
21 taking time out of your busy day to share your
22 stories with us.
23 And finally, because I'm a farmer,
24 despite chairing the Urban Affairs Committee, I
25 have a sincere interest in urban green space and 8
1 production use of such space in our cities for
2 local food production, gardening and
3 farm-to-table and other potentials that may be
4 out there.
5 So we are joined by Ryan Kuck of
6 Greensgrow in Philadelphia and Aaron Sukenik of
7 Hilltop Alliance in Pittsburgh, who are not
8 operating land banks, but are able to shed light
9 on how their organizations work, so that we
10 might focus on the operations that theirs, in
11 our large cities and communities, are doing.
12 We want to thank you gentlemen for
13 joining us.
14 So let's get started. I see we have
15 other members joining us right now. If you want
16 to introduce yourselves, appreciate it.
17 Barry.
18 REPRESENTATIVE JOZWIAK: Barry Jozwiak,
19 Berks County, 5th District.
20 MAJORITY CHAIRMAN M. KELLER: All right.
21 Let's get started.
22 Mr. Alexander, if you would come to the
23 table with your testimony, I certainly would
24 appreciate it. The floor is yours.
25 Thank you. 9
1 MR. ALEXANDER: Chairman Keller, members
2 of the Committee, my name is Frank Alexander.
3 I'm from Atlanta, Georgia. My day job is as a
4 law professor in Atlanta.
5 I'm honored to be here today. I'm
6 honored to have the chance to come back to
7 Harrisburg, to Pennsylvania. It was six or
8 seven years ago that I was first invited here by
9 Chairman Ross at that time and the House Urban
10 Affairs Committee to begin working on what
11 became the Pennsylvania Land Bank Bill.
12 We spent about two and a half years in
13 '08, '09, '10 working on that bill. The purpose
14 of the Land Bank Bill for the State of
15 Pennsylvania is as the Chair has suggested, to
16 be able to focus on the vacant and abandoned
17 properties that plague our neighborhoods and
18 create strategies to take those properties and
19 put them back into productive use.
20 I'm here with you today to celebrate
21 what you all have accomplished over the past
22 five years. When you enacted this legislation
23 in 2012, you were part of a wave of States that
24 did land banking legislation that year.
25 New York, my own State of Georgia, Tennessee, 10
1 New York, Nebraska all enacted land bank
2 legislation.
3 You all now have 17 local land banks up
4 and operating and doing incredible things in
5 their neighborhoods. My role today is really
6 not so much to talk about what your land banks
7 have done thus far, but instead, it's to point
8 out the differences between a land bank and a
9 redevelopment authority.
10 SB 667, which is before you, really
11 pushes that question. What is the difference
12 between a land bank and an RDA or a
13 redevelopment authority?
14 Quite simply, these are different tools.
15 A socket wrench is different than a table saw.
16 Both are incredibly powerful tools and necessary
17 tools, but you've got to know when to use a
18 socket wrench and when to use the table saw.
19 Land banks focus on the vacant and abandoned
20 properties, the burnt structures, the ones that
21 are imposing harms.
22 Redevelopment authorities focus on
23 brand-new projects. Land banks focus on
24 properties which have no owners or at least no
25 owners who are willing to step up to the table. 11
1 Redevelopment authorities tend to focus on the
2 new owner and shifting from a current owner to a
3 new owner.
4 Land banks acquire the properties that
5 no one else wants. Redevelopment authorities
6 assemble properties for new projects. Land
7 banks acquire the properties that have been
8 abandoned. Redevelopment authorities go acquire
9 by purchase or eminent domain properties for new
10 projects.
11 Land banks never have the power of
12 eminent domain. No land bank in the United
13 States has eminent domain power. Redevelopment
14 authorities always have eminent domain power.
15 My concern with 667 is that you're
16 beginning to blend -- if it's enacted -- blend
17 and confuse the mission and function of land
18 banks and redevelopment authorities. You run
19 the risk of confusing the role of a land bank
20 and the role of a redevelopment authority. I'm
21 concerned that you're going to run the risk of
22 undercutting the integrity of land banks and
23 undercutting the integrity of redevelopment
24 authorities as they seek to do their missions.
25 You're going to put at risk public confidence in 12
1 both entities if you blend the two entities.
2 You don't grab a socket wrench when you
3 need a table saw. And that's basically what
4 this legislation is doing. But let me suggest
5 there are simpler solutions. I am not speaking
6 against redevelopment authorities or land bank
7 authorities. I'm simply trying to praise the
8 proper role of each institution.
9 It is entirely possible for any
10 jurisdiction that has a redevelopment authority
11 under your URL in Pennsylvania, anyone of those
12 jurisdictions can create a land bank authority.
13 It is possible, and we do this in many States
14 across the country, we will have both a
15 redevelopment authority and a land bank
16 authority as separate legal entities with
17 separate boards of directors, sometimes with
18 interlocking directors, sometimes with shared
19 staff, to accomplish the different missions of
20 the two organizations.
21 You can use both tools here in
22 Pennsylvania, a land bank authority and a
23 redevelopment authority when appropriate. My
24 concern is you start blending them together,
25 you're going to weaken each one. Right now, you 13
1 have complete powers to do both. When we were
2 working on the land bank legislation in '09, '10
3 and '11, the goal was to create and empower
4 local governments to have one more tool in the
5 toolbox.
6 Land banks are heavily grounded in the
7 conception of neighborhood issues, full
8 transparency, open meetings, open records, full
9 accountability, as the motivation behind the
10 mission of a land bank. Don't begin to water
11 that down by blending the two. I'm afraid if
12 you blend land banks into, legally,
13 redevelopment authorities, you're going to
14 really confuse the question of when to exercise
15 eminent domain and when to go after property
16 that nobody wants through tax foreclosure or
17 code enforcement strategies.
18 To push my analogy of socket wrenches
19 and carpentry one step further, yes, there are
20 times when you need to be able to use both the
21 table saw, when you're framing in rough
22 carpentry, framing the house. You're going to
23 need that table saw, and you're going to need
24 that socket wrench when you bolt it to the
25 joists. But be clear as to the function of each 14
1 tool. Use them both when it's appropriate,
2 rather than grafting one onto the other in the
3 form of blending the powers in legislation.
4 Mr. Chairman, I'm happy to take any
5 questions from any member of the Committee about
6 what was going on at the time we did the land
7 bank legislation or questions about how we've
8 implemented parallel land bank legislation
9 throughout the country. I have shared or
10 provided to Ms. Goldbeck and Mr. Castelli copies
11 of the most recent edition of my book which
12 describes your legislation, as well as the
13 legislation of 10 other States in the past eight
14 years. So I'm happy to take any questions about
15 that, as well.
16 MAJORITY CHAIRMAN M. KELLER: Thank you
17 very much for your testimony.
18 I apologize, Senator. I didn't catch
19 you when you first came in here. I want to
20 recognize Senator Stefano, who actually is the
21 author of SB 667. I'm very pleased that you
22 took time to come over and actually listen to
23 our meeting today and maybe, you know, craft the
24 legislation that you're working with even
25 better. 15
1 So thank you so much for being here.
2 Appreciate it.
3 Also, who joined us while we were here,
4 while we had started, Representative Comitta is
5 with us, and also Representative Kirkland.
6 Thank you so much for joining us.
7 Questions?
8 Are there any questions from any of the
9 members?
10 Seeing none. Okay.
11 Thank you very much, Mr. Alexander.
12 MR. ALEXANDER: Thank you.
13 MAJORITY CHAIRMAN M. KELLER: Thank you
14 so much for coming. Appreciate it.
15 MR. ALEXANDER: Thank you again.
16 MAJORITY CHAIRMAN M. KELLER: Our next
17 testifier is Herbert Wetzel. He's the Executive
18 Director of Housing and Community Development in
19 Philadelphia Council, Office of the President.
20 Herbert, the floor is yours.
21 MR. WETZEL: It's a pleasure to follow a
22 superstar today. I want to thank him for his
23 work, both in Pennsylvania and in the nation.
24 Frank, you really have a tremendous
25 legacy. 16
1 Chairman Keller -- and if you're
2 watching, Democratic Chairman O'Brien -- and
3 members of the House Urban Affairs Committee, my
4 name is Herbert Wetzel, and I currently serve as
5 the Director of Housing and Community
6 Development for Philadelphia City Council.
7 Prior to holding this position, I was
8 Executive Director of the Philadelphia
9 Redevelopment Authority. I'm one of the
10 original members of the Philadelphia Land Bank.
11 I currently serve on the Philadelphia Housing
12 Trust Fund Advisory Board, and I'm vice chairman
13 of the Philadelphia Housing Authority's Board of
14 Commissioners.
15 Before I get into my testimony, though,
16 I want to acknowledge and publicly thank
17 Representative John Taylor.
18 Is Representative John Taylor here
19 today? No.
20 Well, I want to go personally thank him,
21 and we're going to miss him in Philadelphia. He
22 has really shepherded a package of
23 blight-fighting tools that have served us well,
24 housing trust funds, conservatorship and of
25 course land banks. These are all effective 17
1 tools for local governments and neighborhood
2 groups that can use them to fight blight,
3 provide affordable housing and rebuild their
4 communities.
5 I want to take you back in time. My
6 experience acquiring properties from various
7 public entities in Philadelphia goes back to the
8 mid-1970s, which explains all the gray in my
9 beard and the lack of hair on my the
10 Philadelphia Germantown section formed a
11 community development corporation to acquire
12 vacant abandoned houses and to rehabilitate and
13 sell them in the first few years of operation,
14 in 1976, we acquired and rehabilitated 16
15 vacant, abandoned homes.
16 Over the years, our skills and abilities
17 grew to the point that we began to undertake
18 larger and more complex and sophisticated
19 projects. It is then that we began to
20 experience firsthand the immensely frustrating
21 problem of assembling sites for larger scale
22 projects.
23 I'm going to give you an example. There
24 was a large assemblage of land at the
25 corner of Germantown Avenue and Wister Street in 18
1 the Germantown section of Philadelphia, but
2 unfortunately, they were owned by no less
3 than three different public entities. Part was
4 owned by the City of Philadelphia, the
5 Department of Public Property. Part was owned
6 by a Philadelphia Housing Development
7 Corporation, a quasi-government agency, and
8 another part by the City's Redevelopment
9 Authority.
10 The site was large enough to accommodate
11 a small strip shopping center, which would bring
12 needed goods and services and jobs to our
13 community. We received preliminary approval
14 from all three public entities to proceed and
15 develop plans and financing for the project with
16 a commitment from each that they would transfer
17 the land once the project was financially
18 feasible.
19 We proceeded and were able to design the
20 center, secure Rite Aid as an anchor tenant and
21 put all our financing together. But we had a
22 drop-dead date for construction start, both from
23 our financing entities and from Rite Aid.
24 That's when our nightmare began.
25 We had to deal with three separate 19
1 public entities, each with its own set of
2 requirements and bureaucratic processes to
3 dispose of the properties. There was no
4 coordination among these entities and no sense
5 of urgency. With only a few days remaining to
6 take title to the land -- and this you'll find
7 interesting -- we actually had to call our
8 State Representative at the time,
9 David P. Richardson, to intervene with
10 the Mayor of the City of Philadelphia.
11 And finally, with the Mayor's
12 intervention, we were able to secure title and
13 close and build the project, but it was a world
14 full of frustration, costly delays and countless
15 lost opportunities, a world in which there was
16 public ownership and private vacant tax
17 delinquent lots, not in any single entity that
18 could offer them to communities or developers.
19 So today I want to start with the good
20 news. We are working diligently to transfer to
21 the land bank all surplus properties owned by
22 the City of Philadelphia, all properties owned
23 by the Philadelphia Housing Development
24 Corporation, and thanks to an amendment that we
25 requested and that was included in the land bank 20
1 legislation, all surplus property owned by the
2 Redevelopment Authority that was acquired prior
3 to the effective date of the land bank
4 legislation.
5 The goal is to consolidate all surplus
6 publicly owned land into the land bank, which
7 will then serve as the city's land disposition
8 agency with a single set of policies and
9 procedures, a one-stop shop, so important.
10 Now to the not so good. To date, the
11 city has transferred 1,230 parcels, 775 from
12 PHDC, 297 parcels from the Redevelopment
13 Authority. So the land bank inventory now is an
14 2,302 parcels. Now, this may sound like a
15 straightforward task, but it is not.
16 In fact, it has been an arduous task to
17 clear title to these properties. And you would
18 think, if they were in public ownership, there
19 wouldn't be title problems, but some of those
20 were acquired 40 and 50 years ago. And during
21 the intervening years, things have been recorded
22 against them. It might be accidental or on
23 purpose, but we had to go through every one of
24 those properties and clear title to each one of
25 them. 21
1 So we've got about 3,000 more to go.
2 And those will all go to the land bank.
3 Now, the not so good news is, next month
4 will be our fourth anniversary. And to date,
5 using the special powers granted under the
6 General Assembly's land bank legislation, the
7 land bank has acquired, other than by transfer,
8 58 properties. We have over 10,700 vacant tax
9 delinquent parcels in Philadelphia. And this
10 represents a little over one property per month.
11 In the infamous words of the former
12 Eagles head coach Andy Reid, we've gotta do a
13 better job.
14 How can we do a better job?
15 Moving forward requires the adoption of
16 a policy framework that maximizes the benefit of
17 creating the land bank as a tool for rebuilding
18 neighborhoods as the primary emphasis and
19 acknowledges the collection of past taxes as a
20 secondary. Absent such a framework, we will
21 miss many opportunities to assemble larger
22 parcels for redevelopment, to develop small
23 parcels for workforce housing and establish
24 shared revenue opportunities shared by the City
25 and the land bank for those properties that the 22
1 land bank can sell at fair market value.
2 Right now, short term revenue
3 collections reign supreme over long term
4 benefits of putting properties into the land
5 bank. And that's a mistake in my view. As you
6 know, the lack of sufficient workforce housing,
7 at least in Philadelphia, is a growing crisis.
8 The land bank could and should be part of the
9 solution.
10 But by prioritizing the short-term
11 revenue collection over land bank acquisitions,
12 we're missing opportunities to assemble larger
13 parcels consisting of vacant tax delinquent
14 properties, publicly owned properties and
15 smaller properties in gentrifying neighborhoods,
16 parcels that could be used to develop workforce
17 housing in neighborhoods where houses now are
18 selling for $300,000 and $400,000.
19 I'll give you an example. The
20 Francisville neighborhood, which is north of
21 City Hall, in the year 2000, the median sale
22 price was $30,000. In 2015, the median sale
23 price is $340,000. That's how dramatic a shift
24 is happening in many of the neighborhoods in the
25 City of Philadelphia. One of the things that we 23
1 want to do with the vacant land in those
2 neighborhoods, and we have done, is we've
3 provided them for nominal consideration to
4 developers and capped the sale price at $210,000
5 and capped the income to 120 percent of the area
6 median income.
7 So we're using high value parcels in
8 those neighborhoods that are in the public
9 inventory to create housing opportunities for
10 people like police and fire and teachers and
11 others.
12 I'm going to skip something here. I've
13 given you an example of an assemblage.
14 Christine, was that shared with people
15 or not?
16 EXECUTIVE DIRECTOR GOLDBECK: The map is
17 in the packet, but the question I have is, is
18 the link that you sent me now live that it could
19 be shared with members?
20 MR. WETZEL: Yes.
21 EXECUTIVE DIRECTOR GOLDBECK: Okay.
22 Because I will share that so they can see how
23 you assemble from the public/private as long as
24 it's live now. But the map is in there, Herb.
25 MR. WETZEL: I will just take a minute 24
1 to -- if you have this map, what we've done is
2 we've used GIS technology to map the entire
3 public inventory and all vacant tax delinquent
4 lots. And as you can see, this is at 39th and
5 Folsom. There's already a significant amount of
6 public ownership between the Housing Authority
7 and the City of Philadelphia or the
8 Redevelopment Authority or PHDC and the land
9 bank.
10 If you turn it over on the other side,
11 if all of these properties were put in the land
12 bank, if you flip it over, you'll see the size
13 of the assemblage that would be possible. What
14 we don't want to do is miss the opportunity of
15 acquiring properties that are already -- that
16 are adjacent to already existing public
17 ownership.
18 And in that particular arena, we have
19 3,258 vacant tax delinquent parcels that are
20 adjacent to existing publicly owned parcels. It
21 just makes good common sense to put them in the
22 land bank and offer those parcels combined
23 parcels to developers, which would be more
24 attractive. And in the case as the Chairman
25 mentioned, there may be opportunities for urban 25
1 agriculture on this land.
2 I want to touch on two other things.
3 One is that the reason that land banks are
4 superior to tax foreclosure and why they yield
5 more benefits to local government in the long
6 term. I want to quote from an article in the
7 Detroit Free Press. When Grand Rapids area land
8 bank sells a piece of property, the new owners
9 take out building permits 73 percent more often
10 than those who buy properties at a traditional
11 tax foreclosure auction.
12 That suggests parcels handled by the
13 land bank are more often being put to some sort
14 of productive use than those sold at auction.
15 Also, the rate of blighted properties cropping
16 up on -- blighted buildings cropping up on
17 properties handled by the land bank has
18 decreased by 70 percent compared to those sold
19 at tax auction.
20 In 2016, the Center for Community
21 Progress issued a report Catch and Release. It
22 was a long term study of tax foreclosure
23 conveyance in Flint, Michigan between 2008 and
24 2015. The study found that 57 percent of the
25 properties that were foreclosed on by the 26
1 Genesee County Treasurer and sold at public
2 auction were foreclosed again by the Genesee
3 County Treasurer in no more than seven years.
4 I have attached a short list of
5 properties from the City of Philadelphia's tax
6 delinquency list. These are vacant lots that
7 were acquired by these entities, including one
8 that's got an interesting name, LOL LLC.
9 There's also a Philly Cheese steak LLC that's
10 not on this list.
11 But as an example here, this was just a
12 cursory review of our tax delinquent list.
13 These were all bought by these entities at
14 sheriff's sale between 2012 and 2016. And
15 they're all tax delinquent again. If these had
16 been put in the land bank, they would only be
17 conveyed to persons or entities with the means
18 to develop them but also the requirement that
19 they develop them.
20 So I want to conclude by saying that
21 there's tremendous research on land banks around
22 the country, and I think that research in the
23 data proves that land bank dispositions are the
24 only way that we can have some guarantee that
25 ownership is transferred to a responsible buyer 27
1 with the means to develop the property. And
2 land banks have proven to be superior to tax
3 lien auctions in putting properties back on the
4 tax rolls and keeping them there.
5 I want to thank you for the opportunity
6 to testify about the Philadelphia Land Bank
7 story. Most of all, I thank you for giving us
8 this law, this crucial tool, to fight blight
9 created by vacant tax delinquent properties
10 throughout our Commonwealth.
11 Thank you.
12 MAJORITY CHAIRMAN M. KELLER: Well,
13 thank you, Mr. Wetzel.
14 Are there members with questions?
15 Jamie.
16 REPRESENTATIVE SANTORA: Thanks for
17 testifying here today.
18 When you get to the final point where
19 you're going to choose either a new developer or
20 a new landowner, how is that done?
21 I'm assuming it's a competitive process.
22 Is it more than just financials? What goes into
23 that, and who is involved?
24 MR. WETZEL: Yeah, the land bank is --
25 and I'll go back to the Workforce Housing 28
1 Program that I mentioned. The land bank issues
2 an RFP and developers submit their proposals.
3 And what they're looking for is the quality of
4 the units that are going to be developed, the
5 number of bedrooms. I mean, a lot of developers
6 want to build just all one bedrooms right now.
7 We want this to be family housing, for
8 example. And we make it clear, but that doesn't
9 mean that all developers follow that. But then
10 what we do is review their past history. You
11 know, we want to make sure that they're tax
12 compliant in the City of Philadelphia, that
13 there are not any outstanding obligations that
14 they have to the city. And then we're going to
15 review their financial and their past history of
16 development. You know, if they built 25 homes
17 in the last year, that gives us some sense, you
18 know, of their ability.
19 And then, the last piece of it is, what
20 is going to be the sales price?
21 Now, we put a cap, but some people have
22 been able to do design work and things and
23 actually come in and say, I can sell for
24 $190,000. And if it's a good quality unit, that
25 makes it even more affordable to folks in the 29
1 workforce.
2 So, yes, it is a competitive RFP with a
3 set of criteria.
4 REPRESENTATIVE SANTORA: Okay. Do you
5 find yourself with the same developers coming in
6 over and over, is it a variety, or is it
7 depending on the neighborhood, et cetera?
8 MR. WETZEL: I think it depends on the
9 neighborhood. What's really interesting is
10 sometimes we'll do six or eight lots, so we have
11 seen a lot of smaller developers. And it's
12 getting, you know, if we had 100 lots all the
13 time, the smaller developers would shy away from
14 competing.
15 So we decided to do these in smaller
16 lots, six or eight lots, 10 at the most. So
17 we've opened up the door to a lot of smaller
18 developers coming in. And yes, some of them
19 want to work in south Philadelphia, some of them
20 want to work in west Philadelphia and they won't
21 bid on things in other parts of the city, but
22 it's really opened up an opportunity for smaller
23 developers.
24 REPRESENTATIVE SANTORA: Great. My last
25 question, you've seen the buy-in to the program. 30
1 You talk about the success.
2 What are the hurdles that you've had to
3 overcome?
4 What are the issues?
5 MR. WETZEL: There are two separate
6 issues for us. One is the old public inventory
7 and transferring that to the land bank and
8 getting clear title. We thought, like, we would
9 snap our fingers and it would happen, but it's
10 amazing what can creep into the record of a
11 property, you know, if the last time you
12 acquired it was 50, 55 or 60 years ago. So we
13 had to spend a lot of time going through because
14 we want the land bank to have clear title to the
15 properties.
16 The other part is, using the new power
17 to acquire properties. There's a tug of war
18 between our revenue department and our community
19 development folks. And revenue looks at some of
20 these neighborhoods and says, well, that was --
21 I can give you an example. There's a
22 Point Breeze neighborhood in Philadelphia.
23 When I was running the Redevelopment
24 Authority, we acquired vacant lots in that
25 neighborhood for $2,000 each in around 31
1 2003-2004. Those same lots would sell for
2 $100,000 to $120,000 today. So our revenue
3 department looks at it and says, oh, this is
4 simple; we'll just auction it off.
5 The other side, our community
6 development arm, looks at that and says, if we
7 put this in the land bank and offer it for
8 workforce housing, we'll create some economic or
9 perhaps some level of economic diversity in a
10 neighborhood now where houses are going for
11 $400,000-plus.
12 So that's a tug of war that's going on.
13 As I testified, I'm in favor of putting it in
14 the land bank. Our revenue department is in
15 favor of collecting the cash as quickly as
16 possible. And I understand and respect that.
17 REPRESENTATIVE SANTORA: Again, thank
18 you. And I have some of those same concerns
19 because what I see is areas that are developing
20 and they're pushing people out.
21 MR. WETZEL: Yeah.
22 REPRESENTATIVE SANTORA: They can't
23 afford to live there anymore. And they're
24 having trouble finding places they can go within
25 the area that they know best. And it is 32
1 concerning.
2 MR. WETZEL: And I think that's where
3 it's a unique tool because Frank testified that
4 this is land nobody wants. Some of this land
5 every developer that works in that neighborhood
6 wants. The problem is, though, then that will
7 be another $400,000 home. That's one less
8 opportunity for someone who is police and fire
9 and others to own a home in that neighborhood.
10 MAJORITY CHAIRMAN M. KELLER:
11 Representative Comitta.
12 REPRESENTATIVE COMITTA: Thank you.
13 Thanks for your testimony, Mr. Wetzel.
14 You ask the question, how can we do a
15 better job; and you answer it by saying, moving
16 forward requires the adoption of a policy
17 framework that maximizes the benefit of creating
18 the land bank as a tool for rebuilding
19 neighborhoods, as the primary emphasis, and
20 acknowledges that the collection of past taxes
21 is secondary to this mission.
22 And so my question is, does that policy
23 framework come from the City of Philadelphia in
24 this case?
25 Does it come from the legislature 33
1 amending the land bank legislation?
2 How does that work?
3 MR. WETZEL: Yeah, it could be a
4 combination. We're working with the -- I'm
5 working with the Mayor's chief policy person.
6 And I will give you an example of how you can
7 actually do both, collect taxes and build the
8 land bank.
9 I know two lots in a section of north
10 Philadelphia that is rapidly redeveloping, south
11 of Temple University, that were tax delinquent
12 30 some years. They were adjacent to each
13 other. The back taxes were $36,000 collectively
14 on both of them.
15 We had wanted to put them in the land
16 bank and then market them at fair market value.
17 And revenue said, no, we need the money now.
18 And so they sold for $135,000. Revenue got its
19 $36,000, but $99,000 now will sit with our
20 sheriff because the last time one lot sold was
21 1953; and the last time the other lot sold was
22 1961. The houses were demolished 30 years ago.
23 There's no owner coming forward to collect that
24 money.
25 So if the land bank had sold it for 34
1 $135,000, they could have given Revenue $36,000
2 and put $99,000 in the land bank to help offset
3 the operating costs because we have to budget
4 for the operating costs of the land bank.
5 So it makes sense that the wealth in
6 that kind of property, where there's no owner
7 ever coming forward -- and in the end, the
8 sheriff has to actually transfer it to the
9 Commonwealth and it will sit here for I don't
10 know how many years, but that's a way to satisfy
11 both goals. And that's what we're trying to
12 push for.
13 I don't know if I answered your
14 question.
15 REPRESENTATIVE COMITTA: But would you
16 say it's primarily a local governing issue?
17 MR. WETZEL: It is local -- it's a local
18 governance issue.
19 REPRESENTATIVE COMITTA: Not an issue of
20 the General Assembly?
21 MR. WETZEL: That is correct. The law
22 provides us with the power we need. We just
23 have to figure out how to exercise it right.
24 Thank you.
25 REPRESENTATIVE COMITTA: Thank you. 35
1 EXECUTIVE DIRECTOR GOLDBECK: (Microphone
2 not turned on.)
3 Do you want to explain that a little
4 bit? It just came before -- it just got
5 referred to the Committee last week or the week
6 before.
7 MR. WETZEL: Yeah HB 1900 will authorize
8 Philadelphia City Council to transfer liens to
9 the land bank for a period of two years to
10 accelerate putting properties in the land bank.
11 And there's a two-year window there because it's
12 believed that once we get it operational, that
13 we wouldn't need that power anymore. So HB 1900
14 would help us.
15 But the answer to your question is, it
16 is a local problem.
17 MAJORITY CHAIRMAN M. KELLER:
18 Representative Rabb.
19 REPRESENTATIVE RABB: Thank you,
20 Mr. Chairman. And it's Rabb --
21 MAJORITY CHAIRMAN M. KELLER: Rabb,
22 okay.
23 REPRESENTATIVE RABB: -- like rabbit.
24 MAJORITY CHAIRMAN M. KELLER: Okay.
25 REPRESENTATIVE RABB: I get that a lot. 36
1 Thank you, Mr. Chairman. And thank you,
2 Mr. Wetzel.
3 The property that you referred to on
4 Germantown and Wister is right down the street
5 from my district. I know the area.
6 You mentioned at least twice in your
7 testimony about using these reclaimed properties
8 through a land bank for select communities,
9 folks who don't make a lot of money, but whose
10 value in society and neighborhoods, in
11 particular, are high, our firefighters --
12 MR. WETZEL: Yes.
13 REPRESENTATIVE RABB: -- our police
14 officers, our teachers, et cetera. And I see
15 the value in that.
16 Are there any other communities or
17 stakeholders that properties from land banks can
18 benefit in ways that you've seen?
19 MR. WETZEL: Yeah. I think one of the
20 fascinating phenomenons that happened in our
21 city as under Mayor Street's Neighborhood
22 Transformation Initiative, thousands of derelict
23 buildings were demolished in creating lots of
24 open land in the City of Philadelphia. And even
25 though they remained in private ownership, 37
1 neighborhoods created gardens on them, for
2 example. And there are some beautiful
3 neighborhood gardens that are currently on
4 private land. Sometimes that has been auctioned
5 off at sheriff's sale and the developer comes in
6 and tells the gardeners, I'm the owner now;
7 you're going to have to leave.
8 So one of the things that we're doing is
9 looking at all of the neighborhood gardens that
10 are on privately owned tax delinquent land and
11 putting a priority on getting them into the land
12 bank. The other thing we're using the land bank
13 for, along with our other public inventory, is
14 for affordable housing below the workforce
15 level, using low income housing tax credits to
16 build affordable housing to folks at 60 percent
17 or 50 percent of area median income.
18 The workforce housing is generally --
19 it's pretty amazing, but even at today's
20 interest rate, a $200,000 mortgage is about $895
21 a month. That's less than the rent of a lot of
22 two bedroom properties in the City of
23 Philadelphia. So by using the land -- and
24 understand, there is a subsidy. We're giving
25 the land to developer in exchange for capping 38
1 the sale price. If they had to pay us $100,000
2 or $120,000, they wouldn't be able to sell for
3 $200,000 or $220,000.
4 REPRESENTATIVE RABB: Right.
5 MR. WETZEL: So we're trying to look at
6 a broad spectrum, open space, community gardens
7 and affordable housing and workforce housing.
8 REPRESENTATIVE RABB: And have you had
9 any examples of community land trusts coming in?
10 MR. WETZEL: There is an effort in the
11 eastern part of north Philadelphia to try to
12 develop a community land trust. They've
13 received a foundation grant, but I think it's at
14 the very early stages.
15 REPRESENTATIVE RABB: Thank you.
16 MR. WETZEL: You're welcome.
17 MAJORITY CHAIRMAN M. KELLER:
18 Representative Brown.
19 REPRESENTATIVE BROWN: Thank you. And
20 it's great to see you here in Harrisburg.
21 MR. WETZEL: Good to see you.
22 REPRESENTATIVE BROWN: Yes. So,
23 actually, you kind of answered my question,
24 talking about community gardens because near and
25 dear to my heart was the garden that was 39
1 tendered by Winnie Harris, and she's one of our
2 community leaders who lost her life to a tragic
3 incident.
4 The community is thriving to save the
5 garden. I would like to know if you are
6 involved in that process at all, if that garden
7 has been entered into the land bank and if
8 there's any way to preserve that space for
9 Winnie.
10 MR. WETZEL: I'm not directly involved,
11 but if I can get the address from you, I'm
12 willing to follow up when I get back and report
13 back to you.
14 REPRESENTATIVE BROWN: Okay. It's on
15 Holly Street, but I will send it to you
16 directly.
17 MR. WETZEL: Is it -- I think it's two
18 -- I remember Holly Street.
19 Is it two lots together?
20 REPRESENTATIVE BROWN: Yes, it's two
21 beautiful lots --
22 MR. WETZEL: Yeah.
23 REPRESENTATIVE BROWN: -- that are
24 sitting there. And if anyone doesn't know,
25 Winnie Harris was a beautiful community leader 40
1 and stakeholder, who worked for our tree tenders
2 non-profit who went throughout the City of
3 Philadelphia planting trees and making spaces
4 beautiful. And she was, unfortunately, the
5 wrong victim and slain by gun violence in her
6 home.
7 So we would really like to preserve that
8 lot, those two lots, for her.
9 MR. WETZEL: And I think that's the
10 classic example of neighbors looking at this and
11 figuring there's nobody who has ownership, let's
12 put it to good use for the community. And the
13 last thing you want to do is not complete that
14 process, you know, let it become what it is, a
15 valuable asset to the neighbors.
16 And unfortunately, if you auction them
17 off, that's the end of it.
18 REPRESENTATIVE BROWN: Yes. Thank you.
19 MAJORITY CHAIRMAN M. KELLER: Okay.
20 Again, thank you very much for your testimony,
21 Mr. Wetzel. Appreciate it.
22 Thank you.
23 MR. WETZEL: You're very welcome.
24 Thank you.
25 MAJORITY CHAIRMAN M. KELLER: Our next 41
1 testifier is Andrew French.
2 Andrew is the Executive Director for
3 Fayette County Redevelopment Authority, correct?
4 MR. FRENCH: Correct.
5 MAJORITY CHAIRMAN M. KELLER: Okay. The
6 floor is yours.
7 MR. FRENCH: Yep. Thank you,
8 Representative Keller and other members of the
9 Committee. I'm glad to be here.
10 As indicated, I'm the Executive Director
11 of the Fayette County Redevelopment Authority
12 located in southwestern Pennsylvania in the
13 beautiful Laurel Highlands. Fayette County has
14 a lot of tremendous assets to offer, including
15 the Ohiopyle State Park, the Great Allegheny
16 Passage, home to two Frank Lloyd Wright homes,
17 Falling Water and Kentuck Knob.
18 That said, Fayette County, like many of
19 the counties across the Commonwealth, also has a
20 number of different challenges, which I would
21 like to talk about today.
22 While I recognize this hearing has been
23 established to provide a five-year progress
24 report on Pennsylvania land banks, I cannot
25 speak to that issue specifically since 42
1 Fayette County has not formed a land bank and
2 has instead decided to dedicate our efforts
3 towards using local resources to compliment
4 existing agencies that are already engaged in
5 dealing with blight. I will provide more
6 insight on this point later in my testimony.
7 What I would like to focus on today in
8 my brief comments is what we have accomplished
9 in Fayette County in our effort to deal with
10 blighted properties. Since our inception in
11 1949, the Redevelopment Authority has dealt
12 with literally thousands of blighted structures.
13 In fact, that is what redevelopment authorities
14 were created by the Commonwealth to do.
15 Looking back over the years since the
16 land bank legislation was contemplated and
17 passed, the Fayette County Redevelopment
18 Authority has accomplished much, including the
19 following:
20 1. We've acquired and rehabilitated nine
21 properties and resold those properties to
22 low-income homebuyers.
23 2. We've rehabilitated 33 owner-occupied
24 residential properties.
25 3. We've demolished over 40 residential 43
1 blighted properties.
2 4. We've demolished seven major
3 commercial blighted properties.
4 5. We've aided in the construction of
5 over 40 new homes for sale to first-time
6 low-income home buyers.
7 In total, the Redevelopment Authority
8 has invested over $7.1 million in these efforts,
9 using a variety of local, State and Federal
10 resources and private resources, as well. While
11 these numbers may seem low to those in more
12 urban areas of the Commonwealth, please
13 understand that in Fayette County, these
14 projects have had a tremendous, a tremendous,
15 impact on stabilizing our most fragile
16 communities and have had a significant secondary
17 impact of creating additional revenue for the
18 impacted municipalities.
19 In order to provide additional examples
20 of our success in dealing with blight and
21 repurposing property, I will quickly highlight
22 the following projects:
23 1. Three Oaks Development in Redstone
24 Township. This project involved the acquisition
25 of a former obsolete public housing site. 44
1 Following demolition, funding from CDBG, HOME,
2 PHFA-PHARE, USDA and private financing were
3 utilized to construct 35 new single-family
4 units. Seven hundred thousand dollars in public
5 investment was utilized to leverage over
6 $3 million in private investment. And the
7 Original property value, which was valued at
8 zero since it was a public housing site,
9 increased to over $5 million.
10 2. A little borough called Masontown
11 Borough. This involved the acquisition and
12 demolition of a long vacant commercial
13 structure. The project will result -- it's
14 currently under construction -- but it will
15 result in the new construction of three
16 single-family residential structures for sale to
17 low-to-moderate income homebuyers.
18 3. Brownsville Borough, there we
19 instituted a major redevelopment initiative,
20 which involved the acquisition of 26
21 vacant, dilapidated and condemned properties and
22 demolition of seven properties thus far. This
23 has resulted in the completion of a new town
24 square, utilizing approximately $350,000 through
25 Greenways, Trails and Recreation Program, the 45
1 Redevelopment Authority, Fayette County Tourism
2 Fund, Heinz Foundation and other private
3 donations.
4 6. And we also have the successful
5 24-unit Brownsville Senior Apartments, which is
6 being developed by Trek Development, being made
7 possible through $300,000 in demolition funding
8 through Redevelopment Authority, and $1.4
9 million through PHFA, the low-income housing tax
10 credit, and PennHOMES. That will result in the
11 total investment of $7 to $9 million.
12 To transition and re-focus on the
13 specific purpose of this hearing, I believe that
14 the land bank legislation enacted five years ago
15 is extremely beneficial in the fact that it
16 reengages many communities in looking at the
17 issue of blight and how to redevelop properties.
18 Obviously, there are many challenges to
19 developing, operating and maintaining a land
20 bank, which is why Fayette County has opted not
21 to form one, especially given the fact
22 that their Redevelopment Authority is already,
23 in essence, acting as a land bank. While the
24 Fayette County Redevelopment Authority and many
25 other redevelopment authorities across the 46
1 Commonwealth are acting in the same capacity as
2 land banks, we are not afforded the same key
3 powers given to land banks.
4 Based on my conversations with my
5 colleagues throughout the Commonwealth, mainly
6 through the Pennsylvania Association of Housing
7 and Redevelopment Agencies, or PAHRA, this is an
8 issue of great concern. Our hope is that SB
9 667, which was introduced by the great Senator
10 Pat Stefano from Fayette County, will correct
11 this matter. I believe our ultimate goal should
12 be to provide as many resources and tools
13 possible to those agencies on the ground which
14 are dealing with blight. Therefore, I hope this
15 Committee and the House will approve SB 667 to
16 provide those key additional powers to
17 redevelopment authorities to help us aid our
18 local communities in dealing with blight.
19 I once again want to extend my
20 appreciation to you, Representative Keller, and
21 members of this Committee for giving me the
22 honor to testify before you today. I would also
23 like to extend my appreciation to Christine
24 Goldbeck for all of your advice and guidance
25 over the past several months. 47
1 MAJORITY CHAIRMAN M. KELLER: Do any
2 members have questions?
3 My Executive Director has a question, so
4 look out.
5 MR. FRENCH: Sure.
6 EXECUTIVE DIRECTOR GOLDBECK: Okay. Let
7 me -- well, let me back up just a minute,
8 Andrew, because I was going to grab
9 Representative Santora on the side, based on his
10 question earlier, but just to -- I'm going to
11 take a quick trip down memory lane to seven,
12 eight, nine years ago when we were working on
13 all of the land banks.
14 Regarding the question you had about
15 developers, I think it's important to point out
16 that the realtors were very much involved in
17 helping us put it together into a viable, for
18 developers, making sure that they would have
19 every possible opportunity from the private
20 aspect of things to be involved. So I wanted to
21 make that very clear.
22 And essentially, it all has worked out
23 very well in terms of working with the, as you
24 will hear the land banks around the State say,
25 working with the private developers. So you can 48
1 question me on that later, if you want.
2 Now, Andrew, SB 667, if you recall many
3 months ago when we were in dialogue, I said, the
4 key problem -- and again, going back down memory
5 lane, and I think I said this to you -- was that
6 redevelopment authorities have the power of
7 eminent domain. And my caucus beat me upside
8 and down several times to make sure when land
9 banks were being passed that eminent domain
10 would not ever be associated with land banks
11 because they cannot support it.
12 I'm not sure that the bill, as it reads
13 right now, takes care of that little issue,
14 which is a huge issue for the Republican Caucus,
15 but there are also Democratic members who have
16 similar concerns.
17 So statement, question, you can take
18 that as a question and answer it for right now.
19 MR. FRENCH: Sure. And I will say I
20 recognize that and, obviously, in more rural
21 areas of the Commonwealth, the power of eminent
22 domain is used extremely sparingly by
23 redevelopment authorities, just because we don't
24 have the resources to actually use that power
25 anymore. 49
1 I guess I understand when the land bank
2 legislation was contemplated and drafted that
3 the Commonwealth didn't want to create a number
4 of different agencies out there that had that
5 power of eminent domain. I think at the same
6 time that the land bank legislation was going
7 through, there were, in response to the
8 Kelo versus New London case, there were changes
9 that were made to the Commonwealth's eminent
10 domain bill, as well as the Urban Redevelopment
11 Law to kind of tighten the, you know, our
12 ability to use those powers on what properties.
13 I will say that SB 667 in no way expands
14 our power of eminent domain. It doesn't enable
15 us to use it any more than what we're allowed to
16 use it presently. It just simply gives us as an
17 authority the same tools, or the intent is to
18 give us the same tools that land banks have to
19 acquire and repurpose properties.
20 EXECUTIVE DIRECTOR GOLDBECK: Okay. And
21 one more question.
22 May I, Mr. Chairman?
23 You say in your testimony that you, as
24 well as some of the other smaller, I believe,
25 rural counties just don't have the resources or 50
1 just don't want to start a land bank.
2 Is it a possibility that that might be
3 more deeply explored among, say, a larger group
4 of counties or a county and municipality for you
5 guys to form a land bank?
6 MR. FRENCH: We examined it. In Fayette
7 County, we're the countywide redevelopment
8 authority, so there are 42 municipalities in the
9 county. There actually are two smaller
10 redevelopment authorities in our two cities
11 within the county, but we obviously collaborate
12 with those parties and we work throughout the
13 county. So when we contemplated forming a land
14 bank, it would have been a countywide land bank,
15 similar to what a lot of other agencies have
16 done.
17 Again, our challenge was -- and I think
18 we've seen this across the Commonwealth when
19 I've talked to a lot of my colleagues, and I'm
20 sure some of the other folks that are testifying
21 today can talk more in depth about this, but I
22 think what I have witnessed is that in most
23 cases, if you have a strong redevelopment
24 authority that's operating in a county and they
25 form a land bank, almost always, it seems as 51
1 though the redevelopment authority is staffing
2 the land bank. So operationally, they're the
3 same. The staff of the redevelopment authority
4 is the staff of the land bank.
5 I know that's not across the board.
6 There are some exceptions to that, but in a lot
7 of different communities, that's what's
8 happening.
9 As I said in my testimony, we've got a
10 lot of things going on in terms of trying to
11 address blight throughout Fayette County and a
12 limited staff and limited resources. And so in
13 my mind, our efforts were best placed by trying
14 to identify additional resources and trying to
15 implement the actual projects and activities to
16 deal with the blight that we have in Fayette
17 County.
18 MAJORITY CHAIRMAN M. KELLER: All right.
19 Thank you very much. Appreciate it.
20 Let the record indicate that
21 Representative Eric Roe has also joined us. And
22 I see Representative Dean just coming in also.
23 Our next testifier, George Kelly,
24 Director of Planning and Economic Development,
25 Lackawanna County. 52
1 George, the floor will be yours when you
2 get here.
3 MR. KELLY: Good morning. And thank you
4 for the opportunity to share Lackawanna County's
5 experience with the Lackawanna County Land Bank.
6 My name is George Kelly. I'm the
7 Director of Planning and Economic Development.
8 I'm the Executive Director of the Redevelopment
9 Authority, the Regional Planning Commission of
10 Lackawanna County. I also have the pleasure of
11 being the managing member of the land bank, as
12 well as one of its founders.
13 Heavy consideration was given to using
14 the redevelopment authority as the basis for the
15 land bank with the additional members added as
16 required by the Land Bank Act. With much
17 deliberation and negotiations with the City of
18 Scranton, who is our largest city as well as the
19 largest holder of tax repository properties, it
20 was decided to provide a clear focus and mission
21 and that we would have to form a new entity,
22 being the Land Bank.
23 Scranton has more than 50 percent of our
24 1,000 properties in the tax repository. The
25 Mayor of Scranton was provided with two 53
1 appointments directly to the Land Bank Board to
2 ensure that their priorities were considered.
3 In addition, we did an advisory committee with
4 representation from the city, the head of OECD,
5 the Treasurer, Licensing and Inspections. We
6 also included two community development
7 organizations.
8 In addition, we also gave the school
9 board two appointments because they had concerns
10 about meeting their needs. So we wanted to be
11 quite inclusive in what we're doing.
12 Our Board consists of the past president
13 of the Greater Scranton Board of Realtors, which
14 is a countywide organization, a licensed realtor
15 and appraiser from the city of Carbondale. We
16 included a planning board member from Dunmore,
17 the manager of the County's Regional Planning
18 Commission, the head of OECD of Scranton, the
19 Chairman of the Lackawanna Board of
20 Commissioners and myself.
21 An important and integral part of our
22 land bank is we have our Deputy Director of Tax
23 Claim as an advisor to the land bank. The bank
24 is staffed with members of the Regional Planning
25 Commission and the Department of Economic 54
1 Development. The same team also staffs our
2 Redevelopment Authority.
3 Having Patrick O'Malley, the Chairman of
4 the Board of Commissioners, also chair the Land
5 Bank has ensured that we all work together with
6 a common vision driving the progress. The
7 mix of board members has empowered the land bank
8 to fast track the acquisition and disposition of
9 properties. We're doing it as fast as 45 days
10 right now.
11 To address some of the challenges by
12 having this inclusionary mix, by including
13 license and inspection, demolitions can be
14 expedited. They also can be delayed, based upon
15 the intended use of the properties. Initially,
16 the Land Bank acquired 100 properties in bulk,
17 and then we picked up an additional 32
18 properties.
19 There have been 36 properties returned
20 to the tax roll and productive use. Another 14
21 are in que and are targeted to be transferred by
22 year end. The majority of lots that have been
23 provided so far have been side lot programs,
24 nonconforming lots that have been in the
25 repository for several years. 55
1 The clearing of municipal liens and
2 claims, including CDBG demolition liens, have
3 really cleared the way for residents to
4 affordably take back our neighborhoods. A
5 demolition lien could be as high as $17,000,
6 back taxes, six or seven. By taking them to a
7 land bank, we're able to offer these properties
8 for $100 apiece.
9 We also work in conjunction with the
10 County Prisoner Maintenance Team, the work gang,
11 where they'll go out and maintain lots and fight
12 blight and take care of some of the real problem
13 properties that have been that way for a number
14 of years.
15 To fund the land bank, a $50,000 loan
16 was provided by the Lackawanna County Economic
17 Development Fund. And we were fortunate enough
18 to get a Monroe County LSA grant for an
19 additional $160,000. Without this seed funding,
20 we would not have had the Land Bank.
21 The County wasn't willing to commit the
22 funds to actually seed it and start it, so by
23 using the gambling grant, it definitely helped
24 us to get started. In addition to the seed
25 funding, we paired a half a million dollar EPA 56
1 Brownfield Inventory and Assessment Grant that
2 we did as a coalition with our Redevelopment
3 Authority, the City of Scranton and Lackawanna
4 County, so that we could actually go after the
5 properties that intimidate most land banks.
6 The availability of funding for
7 environmental studies has been a valuable tool
8 in the disposition of commercial property. A
9 large tract of brownfield land in Taylor Borough
10 will be acquired once we get our
11 intergovernmental cooperation agreement
12 together. It's about a 110-acre parcel of land
13 that has some issues that we'll be addressing.
14 CBDG home funds of $290,000 were
15 contributed to a United Neighborhood Services
16 project in conjunction with Life Geisinger.
17 They were building a four-unit senior
18 residential project to allow people to age in
19 place and not have to go into a home.
20 We're working very closely with the
21 Recorder of Deeds to implement the new
22 demolition recording fee. That would provide an
23 additional $150,000 in fees in addition to what
24 we already have, $160,000 in affordable housing
25 from Act 137. We are looking to pair $150,000 57
1 of our CBDG nonentitlement funds to match that
2 demolition fee. We also applied for another LSA
3 grant. We're asking for three hundred. We're
4 hoping to get anything to really start the
5 blight program countywide. We would use the
6 land bank for that, but you don't have to be a
7 member of the land bank to actually participate
8 in the demolition and clearing of blight.
9 Regarding SB 667, granting land bank
10 powers to redevelopment authorities, the primary
11 concern from a practitioner's standpoint is
12 that we need the involvement of local tax
13 bodies, local taxing bodies, as intended by the
14 original act. This was really a deal breaker
15 with the City of Scranton, that if we didn't
16 give them the board positions, if we didn't
17 include them, they were unwilling to join our
18 land bank. They also didn't have the capacity
19 or the resources to do it themselves.
20 At a minimum, the redevelopment
21 authorities should be required to hammer out an
22 Intergovernmental Cooperation Agreement, an ICA,
23 that clearly identifies priorities and addresses
24 the needs of the communities. The combination
25 of eminent domain and trump bidding - really 58
1 huge - at a judicial sale is a very powerful and
2 far reaching ability that should be used with
3 the expressed consent of the three taxing
4 bodies. An ICA should outline if a land bank
5 and a redevelopment authority can operate in the
6 same field.
7 The ICA should dictate who has the trump
8 bid if both entities bid on the same property as
9 part of a judicial sale. The Advisory committee
10 should be required to provide direction and to
11 help expedite all parties working together to
12 fight blight at every level.
13 In terms of moving forward, if a funding
14 source, such as Keystone Community Grants, could
15 be added, such as an Elm Street or Main Street
16 type of program or a recording fee could be
17 provided for the creation and initial funding of
18 land bank activities, it would built upon the
19 progress that we have made to date.
20 If it wasn't for Senator Blake and our
21 State Representative's commitment to advocate
22 for an LSA grant, I wouldn't be here today
23 thanking the Committee for allowing me to
24 provide this update and to have the land bank be
25 a valuable and effective tool in fighting blight 59
1 in our communities.
2 Thank you.
3 MAJORITY CHAIRMAN M. KELLER: Thank you.
4 Thank you very much. I just have, more or less,
5 a statement rather than a question. I want to
6 commend you on the fact of the 45-day
7 turnaround. That's pretty much unheard of.
8 Second of all, I think that you've used
9 every tool in your toolbox and thought outside
10 of the box to bring this to fruition. And I
11 think we can say that we can see that it works
12 very well if all entities are a part of it.
13 That being in itself, I think others should
14 pattern off of what you've accomplished in your
15 area.
16 MR. KELLY: Yes.
17 MAJORITY CHAIRMAN M. KELLER: So thank
18 you for that.
19 MR. KELLEY: Thank you.
20 MAJORITY CHAIRMAN M. KELLER:
21 Representative Santora.
22 REPRESENTATIVE SANTORA: My question
23 isn't necessarily geared to you, but in
24 general -- and it's more of a concern -- I think
25 there are a lot of great things happening with 60
1 these land banks, but the eminent domain piece
2 of it is very, very concerning.
3 I understand that redevelopment
4 authorities have that right. That concerns me,
5 as well. And every once in a while you allow
6 it -- and it was prior to myself coming here; I
7 know that -- but we need to really consider
8 expanding the right of eminent domain by this,
9 I'll call it merger, of these groups because we
10 are talking about people's property rights. And
11 people's property rights are protected.
12 And by giving eminent domain, we are
13 risking some of that protection. I'm going to
14 tell you that this is going to be a big hurdle
15 for many people in this caucus and probably even
16 on this Committee. It's extremely concerning.
17 It's something that I don't know if the next
18 speakers can address it or one of the prior
19 speakers wants to address some of those
20 concerns, but it is a very, very serious issue
21 for many people.
22 MAJORITY CHAIRMAN M. KELLER: Professor
23 Alexander, would you come back up here?
24 I think some of those concerns can be
25 addressed. 61
1 MR. ALEXANDER: Thank you, Mr. Chair.
2 Your question is entirely appropriate,
3 and it was very much at the heart of the
4 discussions and negotiation on the Pennsylvania
5 Land Bank Act in '08, '09, '10, '11 and '12.
6 As we've done this throughout the
7 country with now 15 States having land bank
8 legislation and 170 land banks -- you all have
9 17; you all are at the forefront -- but one of
10 the key issues, as we've done this nationwide,
11 is to keep the focus of land banks on the
12 abandoned property where there are no owners
13 that care.
14 We are not trying to undercut in
15 anything we do in land banking redevelopment
16 authorities. We respect that. And I get it
17 that they may need the power of eminent domain
18 for an assemblage, but that is not why we create
19 land banks. That is what I tried to share in my
20 opening, which I'm very nervous about mission
21 drift and confusion.
22 As my colleague has said, when you start
23 doing both eminent domain and tax foreclosures,
24 in the minds of people who own property, it gets
25 very confused very quickly. 62
1 REPRESENTATIVE SANTORA: Do you have
2 statistics on the other States to show the use
3 of eminent domain since those groups came
4 together, the land banks with the authorities?
5 MR. ALEXANDER: Well, I can tell you
6 that of the 15 States that have adopted in the
7 past eight years comprehensive land bank
8 legislation, not a single one has the power of
9 eminent domain. Indeed, every one has an
10 express disclaimer of eminent domain in land
11 banking legislation.
12 REPRESENTATIVE SANTORA: So you're okay
13 with us amending this and removing the eminent
14 domain piece?
15 MR. ALEXANDER: Well, I think that's not
16 the dilemma that 667 puts before you, because
17 I'm not advocating that redevelopment
18 authorities be stripped of eminent domain power.
19 That's a very different question.
20 What I'm concerned with is that right
21 now, the way this amendment is or this bill is,
22 you're moving land bank powers into
23 redevelopment authorities, which already have
24 eminent domain. So you're going to -- that's
25 where the confusion is. 63
1 My suggestion is that you leave the
2 organizations separate with separate missions,
3 emphasize collaboration, intergovernmental
4 agreements when possible, direct transfers from
5 one to the other when possible; and they are
6 possible.
7 REPRESENTATIVE SANTORA: I can't say I
8 disagree with you, so okay. Thank you.
9 MAJORITY CHAIRMAN M. KELLER: Thank you
10 very much.
11 MR. ALEXANDER: Yes, sir.
12 MAJORITY CHAIRMAN M. KELLER:
13 Representative Dean, you had a question.
14 REPRESENTATIVE DEAN: Thank you,
15 Mr. Chairman. I apologize that I was delayed in
16 getting here. So if I'm asking something that's
17 already been spoken about, I apologize.
18 But it's impressive what you talked
19 about, the 100 properties in bulk and then an
20 additional 32, and many of them you have been
21 able to transfer and dispose of. I share my
22 colleague's concern about the blurring of
23 eminent domain power and authority, so I
24 appreciate your definition of how it should be
25 separate yet collaborative. 64
1 Can you sort of paint the picture of
2 some of these properties?
3 And as I said, if it's already been
4 done --
5 MR. KELLY: It hasn't; I would be glad
6 to.
7 REPRESENTATIVE DEAN: Okay. Thank you.
8 MR. KELLY: We have a lot of
9 nonconforming lots. So they're little 30-by-50s
10 or they're 50-by-100s, where we can't build on
11 the lots right now. They've been in the
12 repository for 10 or 15 years. No one wants
13 them. The taxes are very high on them because
14 the assessments are obscure right now. And
15 there are usual demo liens on the back taxes.
16 By us taking it in, we clear all liens.
17 We take care of all of the back taxes, except
18 for IRS liens, which we are clearing property by
19 property. We then will make that available for
20 side lots, gardens, neighborhood gardens, a
21 parking area for a school area. So we're taking
22 a lot of those little lots and just putting them
23 to use and taking them back. So we're fighting
24 the blight.
25 We have consolidated three lots into 65
1 one, which we did with a partnership with LIFE
2 Geisinger in the middle of a really nice block.
3 So therefore, we're going to integrate that.
4 It's very close to a hospital and right in town.
5 We have a commercial property that the
6 roof is caved in. We have a little bit of
7 environmental issues. There are some barrels
8 laying around, an old oil tanker in the back.
9 And we've taken that in. We have a developer
10 who is investing a good $15 million in the
11 contiguous properties who is going to buy that
12 once I finish up the phase two environmental
13 studies.
14 So it's been a real mix of a little bit
15 of new development consolidating lots for
16 homeowners that have been maintaining lots for a
17 number of years and a little bit of commercial
18 right now.
19 REPRESENTATIVE DEAN: And of course
20 improving the nature and quality of the
21 community, you're helping seniors get housing.
22 You're making sure that the environmental
23 concerns are being taken care of and accessing
24 the grants and environmental needs that you need
25 to take care of. So thank you for giving me 66
1 some sense of it.
2 My mother-in-law is from Lackawanna
3 County. And even though she's been down in
4 Montgomery County for about 70 years, she still
5 considers that she's from Lackawanna County.
6 MR. KELLY: Hopefully she comes back.
7 REPRESENTATIVE DEAN: She's a Walsh
8 through and through.
9 Thank you very much.
10 MAJORITY CHAIRMAN M. KELLER: Thank you.
11 Thank you, Mr. Kelly.
12 MR. KELLY: My pleasure.
13 MAJORITY CHAIRMAN M. KELLER: Yes, go
14 ahead.
15 Do you have a comment?
16 EXECUTIVE DIRECTOR GOLDBECK: I do. I
17 have a comment and a question. My comment is on
18 the funnier side of things. That would be that,
19 Herb Wetzel, I think Mr. Kelly and I need to
20 come down and do a couple Philly site visits and
21 some creative funding ideas and hit my favorite
22 Irish pub while we're there, me and Mike Kelly.
23 So there's my comment.
24 How did you manage to -- the creative --
25 we didn't fund land banks, as everyone remembers 67
1 or is learning. We just gave you all sorts of
2 awesome powers and made sure you were
3 transparent about how you did it.
4 Who came up with the idea to go to the
5 EPA for the, you know, for that kind of grant
6 funding? And I want this on the record because
7 it is so super smart to have done it that way?
8 MR. KELLY: What happened was, I have a
9 very good team, very enthusiastic and energetic.
10 And I drive them to look for competitive grants,
11 so we're not a burden to the taxpayers. I have
12 a team of 20 people supporting all the different
13 organizations, authorities and commissions.
14 Sixty percent of our salaries are
15 reimbursed, so it's not a burden to the General
16 Fund. And then my team has raised three to four
17 times our fully loaded salaries and grants. So
18 we went to a DCED tour of Pennsylvania, talking
19 about brownfields and how can we fight blight in
20 that way.
21 And my team and I sat down and said,
22 hey, why don't we apply for this? And we
23 realized that we could only get up to $300,000
24 by doing it ourselves. So therefore, we did a
25 coalition with the City of Scranton. And up 68
1 until that point, the city and the county
2 basically hated each other. They didn't talk.
3 You couldn't even get them in a room.
4 And being new to politics and being new
5 to the job, I came in with a clean slate. So I
6 approached the Mayor in an Irish pub, of course,
7 and said, wouldn't it be nice if we could double
8 up the ask; and we did. We used Langan
9 Engineering, who is the poster child for
10 brownfield inventory and assessment. They give
11 the presentation for DCED.
12 So we used that, and we were able to
13 invest about $16,000 to have them help us write
14 the grant, submit it in. And with their
15 connections with the EPA and knowing what they
16 wanted, which it is a hard grant to get, we were
17 able to take that in.
18 Now, with that grant, we did the
19 environmentals on a huge piece of property that
20 a local YMCA community center is buying. We
21 cleaned that. We have a tainted property right
22 downtown across from a cathedral. We're at a
23 phase two right now. Old dry cleaners, those
24 are always headaches.
25 We have a meat processing plant that was 69
1 donated to a local university that we are doing
2 the environmentals on that and trying to get
3 that cleaned, as well as this other property
4 that I mentioned over by our Scranton Lace
5 Company.
6 So it was just -- it was kind of dumb
7 luck that it kind of fell in. And then when we
8 were sitting around getting the land bank
9 started, the same traction that you're seeing
10 with the other land banks in the State, my team
11 didn't want to take in properties. Oh, we're
12 afraid. We might get yelled as because they're
13 blighted, and the City is going to yell at us to
14 cut their grass.
15 So that's why I gave them the ultimatum.
16 I said, hey, in the next 30 days, pick 100
17 properties out of the 1,000 in the repository;
18 we're going to acquire them. And we took those
19 in right away, and then we started advertising,
20 put it on the website, put signs up. You know,
21 property, call Ralph, you know, doing things
22 like that. And that's how we steamrolled it in.
23 Thanks.
24 MAJORITY CHAIRMAN M. KELLER: All right.
25 Thank you very much. 70
1 MR. KELLY: Thank you much.
2 MAJORITY CHAIRMAN M. KELLER: Our next
3 testify is An Lewis. She's the Executive
4 Director of Tri-COG Land Bank.
5 An, the floor is yours. Good morning.
6 MS. LEWIS: Good morning. Thank you for
7 having me this morning.
8 Just as a way of introducing who I am
9 and some more creativity about what can be done
10 with land banks, I am both the Executive
11 Director of the Tri-COG Land Bank and of Steel
12 Rivers Council of Governments in Allegheny
13 County.
14 The Tri-COG Land Bank was an initiative
15 formed just this year -- actually, our legal
16 paperwork was accepted in March -- as the
17 culmination of over six years of work by the
18 Steel Rivers Council of Governments and our
19 partner, the Turtle Creek Valley Council of
20 Governments.
21 There has been lots of reference so far
22 this morning about the strong focus several
23 years ago and the numerous pieces of legislation
24 that were coming through our State to help
25 address the problem of blight. So our councils 71
1 of governments represent 39 of the 130
2 municipalities in Allegheny County. Our region
3 in the county is the most distressed. And so in
4 2012, as this legislation was being proposed, we
5 were aware of the Land Bank Act. We knew that
6 there was a problem of blight, but we knew that
7 we needed to understand it.
8 So we set about the business of
9 understanding and calculating the cost of
10 blight. I've provided a couple of handouts for
11 you. One of them is a summary of our 39
12 municipalities.
13 And what we did is we looked at
14 properties that were in poor, very poor and
15 unsound condition. We looked at what was
16 happening around them. And we calculated the
17 cost of police, fire, demolition, all of these
18 direct costs. We also calculated the indirect
19 costs. We replicated some efforts that were
20 done in Philadelphia. And what we found is that
21 responsible property owners were shouldering the
22 significant cost.
23 In our 39 municipalities, about a
24 quarter to a third of the county, 2012 cost our
25 local governments and our community $254 72
1 million. If your house is within 150 feet of a
2 blighted property, your house is being devalued
3 by at least 15 percent. If you're in a
4 community with an emerging blight problem, where
5 there is maybe one bad apple on the street, your
6 house is being devalued by up to a third.
7 When you blow that up countywide, that's
8 a loss of $1.2 billion, with a b, dollars in
9 wealth. When you consider that over 60 percent
10 of the personal wealth in our middle class
11 households is borne and is contained in the
12 equity of our house, that's an enormous number.
13 We would never tolerate that with our retirement
14 accounts.
15 So we were able, because of that work
16 and because of that study, to create a
17 conversation among our municipalities, school
18 districts in our county. Our land bank operates
19 outside of the City of Pittsburgh in Allegheny
20 County. We have 28 members. We have 21
21 municipalities. There are six school districts
22 in Allegheny County.
23 Our land bank requires that all three
24 taxes jurisdictions are members of our land
25 bank. We did this because, as many of us know 73
1 in Pennsylvania, we have a culture of local
2 control. We have over -- I was talking to
3 Professor Alexander earlier. We have 2,571
4 units of local government in the State of
5 Pennsylvania. We like our small governments.
6 One of the things that I knew, being a
7 COG Director, is that our local governments are
8 like neighborhoods in a city. They have unique
9 cultures. We have very passionate elected
10 officials, and they want to be at the table.
11 And so what our land bank offered was them to
12 have a seat at the table. One of the things
13 that the Land Bank Act smartly did was it called
14 attention to the importance and the inclusion of
15 residents.
16 The Land Bank Act requires that on the
17 board there be one resident member. We took
18 that principle and we expanded it. Our land
19 bank is governed by a nine-member board. But in
20 forming that board, we have two advisory
21 committees. Those advisory committees are made
22 up of our municipalities and our school
23 districts. They have two really important
24 functions. They nominate and elect our board of
25 directors and they vet and approve every 74
1 acquisition and every disposition going through
2 our land bank so that there is full transparency
3 so that everybody knows which properties are
4 going in and which properties are coming out and
5 what they're to become.
6 Our land bank board is a balance of
7 political representation. We have two municipal
8 members. We have two school directors. We have
9 a seat appointed by the county executive. We
10 have three professionals. We have one resident.
11 So all of our decisions are balanced based on
12 best practices and what's best for the
13 community.
14 We've also developed a creative
15 financing strategy. As Christine said earlier,
16 the Land Bank Act came up with all of these
17 great powers with no money to do that. So we
18 looked to Cuyahoga County. Right now,
19 arguably -- I am not an expert; I will defer to
20 those national experts in the room -- but I
21 believe they are probably by far the largest
22 land bank, especially right now.
23 But they have a very important source of
24 revenue built into their State legislation.
25 They get a scrape of delinquent tax collection. 75
1 And that flows through the county and is
2 automatically deposited to the land bank. It
3 allowed them to grow and operate at scale. We
4 knew -- pardon me?
5 (UNIDENTIFIED SPEAKER NOT SPEAKING INTO
6 MICROPHONE.)
7 MS. LEWIS: They get a portion of the
8 delinquent tax collection. The delinquent taxes
9 are collected at the county level and Cuyahoga
10 County gets a portion of that tax increment.
11 It's done in other places, as well.
12 We knew that we couldn't wait for a
13 legislative solution, so we built in our
14 intergovernmental cooperation an agreement. All
15 of our members commit five percent of the prior
16 year of their delinquent taxes, collected
17 delinquent taxes. That has allowed us -- this
18 year, that provided $180,000 of operating
19 support.
20 The other thing that that did for us, is
21 it allowed us to go out to our local foundation
22 community. We reached out to them. Five
23 foundations are funding us and have given us
24 $1.5 million in operating support to fund our
25 first three years of operating. Additionally, 76
1 our members commit to thinks that were created
2 in the Land Bank Act. They agree to allow the
3 land bank to discharge the past debt.
4 Most of our communities, most of our
5 properties are the properties that Mr. Alexander
6 spoke of. They are the abandoned properties
7 that are languishing. And most of our taxing
8 body members understood that those taxes were
9 never coming. And it was the right thing to do
10 to just wipe the slate clean and forgive that
11 past debt, so they agreed to that. They also
12 agree, as the legislation allows, to share the
13 future taxes 50/50 with the land bank.
14 One of the things that, you know, just
15 to kind of talk about what we've been able to
16 accomplish this year, we are brand new. We're
17 just getting started. We spent 2017 passing
18 by-laws, policies and procedures, but we've
19 actually already started acquisition on 10
20 properties. We've identified two rounds of
21 property consideration a year, and we'll be
22 moving forward with our second round in the
23 coming months.
24 In closing, I want to speak a little bit
25 to SB 667 and return to the sort of fragmented 77
1 nature of Pennsylvania. I think that many
2 criticize our State and our local governments
3 and write them off as sort of small, inefficient
4 and outdated. But as I said before, we are a
5 passionate State. And a network of small towns,
6 boroughs and smaller cities, which deserve a
7 seat at the table.
8 I think our land bank shows that the
9 Land Bank Act allows for the engagement of those
10 local community members. In our opinion, SB 667
11 is a mistake. It abandons the preference for
12 local control of land banks, as most
13 redevelopment authorities are entities of the
14 county.
15 Furthermore, while I'm not an expert on
16 the Redevelopment Authorities Act, I believe
17 that that Act has no provision for local
18 representation on those boards.
19 Secondly, as Mr. Alexander spoke of
20 before, SB 667 misaligns the power of land
21 banking with redevelopment authorities. It's
22 giving them power that they weren't designed to
23 have. And it does not provide any of the
24 safeguards that the Land Bank Act does.
25 For example, the Land Bank Act requires 78
1 that there not be an overlapping jurisdiction
2 between land banks. You can't have two land
3 banks operating in the same geographic region.
4 Lastly, I don't believe that SB 667 has
5 had sufficient vetting. As has been spoken
6 about earlier, the Land Bank Act was designed
7 over three legislative sessions. SB 667 passed
8 in three months.
9 Lastly, some have argued that SB 667
10 would bring cost-saving measures by not forming
11 a new organization. We just did it this year.
12 It cost us maybe $10,000. So to gain $10,000 in
13 the short term seems to be a very heavy price
14 for what you would give up in the long term.
15 Thank you.
16 MAJORITY CHAIRMAN M. KELLER: Thank you
17 very much, An. You know, I see you're very,
18 very passionate about your job and how it works.
19 I want to thank you for your testimony.
20 I don't have any questions from any of
21 the members. Oops, I got one there. Sorry.
22 Representative white.
23 REPRESENTATIVE M. WHITE: Could you just
24 briefly discuss how your organization with the
25 financing, the money that you receive, the 50/50 79
1 split, how is that working out?
2 And is that indefinite, that 50/50
3 split, or is that for a period of time?
4 MS. LEWIS: No. The Land Bank Act
5 allows land banks to share future tax revenues
6 50/50 for a period of five years. And when
7 you're dealing with smaller residential
8 properties, which is what we will be dealing
9 with, it's not a lot of money, honestly, but
10 that's what that is.
11 MAJORITY CHAIRMAN M. KELLER: All right.
12 Thank you. Thank you very much, An.
13 Appreciate your testimony.
14 MS. LEWIS: Thank you.
15 MAJORITY CHAIRMAN M. KELLER: Next up,
16 we have Pat Mack, Deputy Director of the Housing
17 Authority of Northumberland County.
18 Pat, the floor is yours.
19 MR. MACK: Good morning, Mr. Chairman,
20 and members of the Committee.
21 I want to echo some of the sentiments
22 that some of my colleagues have offered here
23 today. It's a privilege to be here and to
24 discuss this legislation. I guess to get
25 started, in providing testimony, we are a 80
1 housing authority, so our land bank is staffed
2 by that.
3 And I will get the elephant out of the
4 room. Our housing authority is afforded the
5 power of eminent domain. So certainly, as we
6 have discussed that, it was, I think, a germane
7 discussion that we were having when we were
8 forming our land bank, who should proctor this
9 thing and be at the forefront?
10 That said, in forming a land bank. We
11 were sort of ahead of the legislation. Prior to
12 the passage, we had already commissioned some
13 folks off the floor, a forum if you will, of
14 municipal folks to talk about blight through our
15 community. And it's through that municipal
16 process and community support and everything
17 that we were able to put together.
18 We were already achieving goals prior to
19 the land bank passage. So we had a blight
20 strategy in place, and we were following that
21 when the land bank came in. So one of the final
22 blight summits and the meetings we held offered
23 us this land banking opportunity. We had talked
24 about it. We had heard about it. So we sort of
25 hit the cusp as our wheels were already turning. 81
1 Our process had already begun with the
2 repository list. So some of those municipal
3 discussions led us to believe that, you know, we
4 have this blight issue. Where is it, and how do
5 we address it?
6 And we found most of our issue, in a
7 little county a little north of here, was on our
8 county repository list. These were abandoned
9 properties through what the Professor said
10 earlier. They came with all of the modern
11 amenities of central air, by way of that, no
12 windows; many times, a sunroof. Most of them
13 have a real nice sunroof and had collapsed in.
14 So these were abandoned properties.
15 That's sort of where we've concentrated our
16 efforts. One of, I believe, the secrets to our
17 success and the secrets to the land bank
18 legislation was the municipal cooperation.
19 Everything, throughout our process, was driven
20 municipally.
21 Those folks, as we developed the blight
22 strategy, set out and picked the properties they
23 wanted to choose to address. We've been the
24 back-of-the-house support, and they've been out
25 at the forefront. And we believe that process 82
1 worked simply because they were hearing from
2 residents all the time. There were folks coming
3 to the meetings saying, what are you doing to
4 address this property; how will you address this
5 property?
6 And they were following those meetings
7 regularly, kept continually coming. So we knew
8 and they knew these were the problem properties
9 to address. They also knew emerging trends in
10 their community and could see what was needed
11 better than a countywide entity dictating
12 downhill to them.
13 So whereas, our land bank hasn't done a
14 lot of activity, the Housing Authority has
15 provided the background to that, we've secured
16 over a million dollars in grants and grant
17 funding through various sources. Certainly, the
18 folks at DCED, we appreciate all the work that
19 they've done for us. And in helping to keep
20 that ball moving, we've addressed over 60
21 properties on that repository list.
22 Certainly, when you hear some of my
23 colleagues from the bigger areas, it doesn't
24 sound like a lot, but to us, it's tremendous.
25 Our multi-municipal discussions led us to a 83
1 conservatorship action. We came to realize that
2 several prominent blighted properties were not
3 tax delinquent.
4 There was one property owner that kept
5 the taxes current. So we were able to have
6 discussions amongst municipal representatives,
7 combine them together and share the legal fees
8 to address, I think it was a dozen to 13
9 blighted properties. And as I said previously,
10 these had all of the modern amenities. These
11 were your true blighted properties when you
12 looked at it.
13 Just recently, one of our major
14 accomplishments as a housing authority and
15 working with one of our municipal
16 representatives was to tackle several repository
17 properties that fell victim to a fire. These
18 were a dozen properties. It started on a corner
19 lot and worked its way to the middle. We were
20 able to abrogate these and acquire them from the
21 repository list.
22 After the fire had happened, we secured
23 the funding to perform the demolition. And then
24 following the demolition, the Housing Authority
25 came in and accounted as the redeveloper. We 84
1 certainly believed that us doing that, in
2 conjunction with what was recommended from our
3 blight strategy, that in our development, we're
4 hoping to inspire other private developers to
5 come forward and see a vision and do it more on
6 a private level than us on a public level.
7 We've constructed these five beautiful
8 townhouse apartments. You know, we think they
9 are great. They're on a gateway street, but we
10 wanted to do it in the essence of the land bank
11 legislation, and that was to cooperate.
12 We had the township come to us. We
13 acquired it. They went to through the auction
14 process, sort of following all of the steps that
15 were outlined in the legislation to stay, you
16 know, run parallel to that. So we're very
17 proud, I think, of what we've done. We
18 certainly want to thank what this Committee has
19 offered us.
20 I understand and we echo the concerns
21 with some of the eminent domain powers, but I
22 think we've sort of found a way to follow that.
23 So with that --
24 MAJORITY CHAIRMAN M. KELLER: Thank you
25 very much. 85
1 Members, questions? Staff?
2 EXECUTIVE DIRECTOR GOLDBECK: Okay. So
3 back to the elephant in the room, how do you
4 address, how do you deal with any eminent domain
5 issues that come up with housing authority/land
6 bank?
7 MR. MACK: I think our board, just
8 knowing the current make-up and probably the
9 past make-up, I don't know that it's ever even
10 entered the discussion. I think that some of
11 the earlier testimony, they'd be used so lightly
12 that you don't even acknowledge it. But also,
13 we've driven it municipally.
14 So when we've been dealing with blight,
15 I think the township level folks and the city
16 level folks have picked from the list and said,
17 here's where we want to deal. And certainly,
18 some of the biggest properties that we have had
19 have set on the repository list for years and
20 been extensive.
21 So when you're looking at poster
22 children for blight, these have jumped out from
23 that repository list to us because they've set
24 -- speculators have come and gone on these
25 properties and they're just sitting there just 86
1 wasting away.
2 EXECUTIVE DIRECTOR GOLDBECK: (Microphone
3 not turned on.)
4 MR. MACK: No. We haven't even raised
5 it. As a matter of fact, probably the only time
6 that it entered the discussion was in the joint
7 conservatorship action between the township and
8 the city. And again, I think conservatorship
9 was such a new tool and an innovative tool
10 afforded to us by the legislature and offered so
11 much of a better opportunity that that was the
12 route we chose.
13 And while it was an education, I think
14 it worked. It was a lot cleaner.
15 EXECUTIVE DIRECTOR GOLDBECK: Just a
16 note to the members, Mr. Chairman, the
17 Conservatorship Act that Pat is speaking about
18 was also a House Urban Affairs Committee law.
19 It came about in 2010. And it is also being
20 used as one of the tools around the State by
21 municipalities very successfully.
22 So it's one more tool in addition to the
23 land bank. I didn't know Northumberland was
24 using it.
25 MR. MACK: Yeah. 87
1 MAJORITY CHAIRMAN M. KELLER:
2 Representative Santora.
3 REPRESENTATIVE SANTORA: I appreciate
4 your comments about the fact that you're not
5 using eminent domain, that the Board's policies
6 -- now, unfortunately, for us, we've got to look
7 well beyond your current board, the next board
8 and the board after that. We have to think
9 about that into the future. So those are, I
10 think, some of the concerns that you're hearing
11 from up here and why we've got to make sure that
12 we address this properly for many years to come.
13 MR. MACK: And very appropriate.
14 MAJORITY CHAIRMAN M. KELLER:
15 Representative Dean.
16 REPRESENTATIVE DEAN: Thank you for your
17 testimony.
18 In doing your review of properties in
19 your county for the Housing Authority, what's
20 the scope of the problem?
21 And I also see it as the scope of the
22 opportunity. You said you're addressing 60
23 properties at this point.
24 So what does it look like? What does
25 the timeline look like? 88
1 MR. MACK: Most of the time, our
2 timeline is pretty straight forward. We're able
3 to come in at the municipal level. They
4 approach the tax claims bureau. Ninety percent
5 of the properties are sitting on the repository
6 list. It's a simple dollar transaction. And we
7 have allocated funding, various streams we've
8 combined through Keystone Communities, CDBG,
9 some private funding, looking forward to using
10 the Recorder of Deeds fee that we just enacted,
11 the Blight Demolition Fund, to bring that in.
12 So from that standpoint, it probably
13 is -- from the time we pinpoint it until the
14 time we're actually sinking a shovel in the side
15 of a house, 12 months. This just depends.
16 We're trying to get into more of a -- it has to
17 work into the process, lumping the bids
18 together, just being economic with the dollars.
19 You know, also contractors sometimes, we
20 see a lot of bids get more competitive in the
21 winter because they -- this is a good piece of
22 filler work for them. Most of the time, we are
23 talking about demolitions.
24 REPRESENTATIVE DEAN: And how many
25 properties or parcels are within your repository 89
1 list?
2 MR. MACK: I haven't looked at it
3 currently. It was a couple hundred -- much to
4 the Lackawanna County's state, I'm a recovering
5 planning and economic development director, so I
6 can relate to all he's saying of being creative,
7 but the list is rather extensive, but we're
8 dealing a lot with his same standpoint of side
9 lots, nonconforming, you know, real oddball
10 setup in housing.
11 We have a lot of old coal-style housing
12 from old coal companies that have just gone
13 through generations. So as the population has
14 declined or moved into the more farm setting or
15 out of the cities, this is what we're seeing. I
16 think each of them that we approach presents
17 something unique. When we're looking at a
18 demolition, it's real tight quarters.
19 REPRESENTATIVE DEAN: Okay. Thank you
20 very much.
21 Thank you, Chairman.
22 MAJORITY CHAIRMAN M. KELLER: Thank you,
23 Mr. Mack. I appreciate your testimony and being
24 here today.
25 Next on our agenda is Winnie Branton, 90
1 the Housing Alliance of Pennsylvania.
2 Winnie, the floor is yours.
3 MS. BRANTON: Good morning, Chairman,
4 and members of the Committee.
5 My name is Winnie Branton, and I serve
6 as the Program Manager for the Housing
7 Alliance's Blight and Land Bank Training and
8 Technical Assistance Program. The Housing
9 Alliance is a statewide coalition that advocates
10 and provides leadership and a common voice for
11 policies, practices and resources to ensure that
12 all Pennsylvanians, especially those with low
13 incomes, have access to safe, decent, accessible
14 and affordable homes.
15 We also advocate to advance strategies
16 for community development and revitalization.
17 And as I mentioned, I serve as the Blight
18 Program Manager. In that role, what I do is,
19 I've provided local governments with knowledge
20 and training on all of the strategies that have
21 been discussed this morning: conservatorship,
22 land banking and other tools that are used by
23 local governments to address blighted
24 properties.
25 What I want to do this morning is talk a 91
1 little bit about the progress that the 17
2 Pennsylvania land banks have made and fill in
3 some of the additional information that's
4 already been provided this morning and then have
5 some comment on SB 667.
6 To start with the land bank legislation,
7 it was passed in 2012. And what I think makes
8 it really an effective tool is the fact that it
9 was flexible and optional. It's not mandated.
10 It gives local governments a lot of different
11 measures and methods for collaborating to
12 address blight by using a land bank.
13 The Housing Alliance worked over a
14 decade, as was testified to this morning, with
15 this Committee and the legislature to develop
16 tools that would work for local communities.
17 And part of that coalition included, as
18 Christine mentioned: realtors, developers,
19 environmentalists, community activists, everyone
20 that touched blighted property was at the table
21 helping to craft that legislation. And you
22 worked over three legislative session to get the
23 right land banking bill for Pennsylvania.
24 Professor Alexander testified that, you
25 know, there are many States that have land banks 92
1 and the legislation has to be tailored to what
2 the needs of that State are. And Pennsylvania
3 certainly did that with the Land Banking Law.
4 We had very great support from this
5 Committee. Representative Taylor,
6 Representative Ross and others worked hand in
7 hand with the Housing Alliance to get the land
8 bank bill passed. And thanks to the
9 Pennsylvania Legislature's six-plus years of
10 looking at national models, bringing in experts
11 and hearing from the community, we have a
12 terrific bill that is working well across
13 Pennsylvania.
14 At last count, we mentioned there are 17
15 locally created, locally controlled land banks.
16 Hopefully, there will be a number 18 soon. Last
17 night the Borough of Pottstown was considering a
18 land bank ordinance. So they may be added to
19 the list.
20 Within your materials, there's a map
21 that shows the 17 land banks that really go from
22 Erie to Philadelphia. They touch on suburban,
23 urban and rural communities, and the tool is
24 working well.
25 As some have testified this morning, it 93
1 can be a county, it can be a city, it can be
2 multi-municipal. The land bank legislation
3 allows for any of those entities to form a land
4 bank based on the passage of a local ordinance.
5 And again, they're locally created,
6 locally controlled. They offer a modern system
7 for recycling land that is designed to be lean
8 and nimble and not as cumbersome as the old
9 system that was slow and fragmented and
10 required, you know, a really good problem solver
11 to even get access to the properties and know
12 which ones very available and know how to get
13 your hands on them.
14 So to begin talking about the progress,
15 I want to touch on really the three key elements
16 of what land banks do, acquire and hold
17 properties, clear title and remove liens and
18 then transfer the properties. There's been a
19 lot of discussion about eminent domain powers
20 this morning. Land banks do not have the power
21 to acquire properties using eminent domain.
22 The key acquisition power for land banks
23 is they're able to go and negotiate with the tax
24 claim bureau to acquire properties at judicial
25 sale, the free and clear sale, without having to 94
1 bid against other bidders. And what happens at
2 these judicial tax sales often is folks are not
3 capable, they don't have the financial capacity
4 or the expertise to redevelop the properties
5 that they can acquire for as little as $1,000.
6 So the land banks are able to negotiate
7 with the tax claim bureau a little to acquire
8 some of those properties in advance without
9 having to be the highest bidder at those public
10 auctions. And then that power is being used
11 across Pennsylvania by land banks today.
12 In Westmoreland County, they've used it
13 as part of their acquisition of parcels that
14 were the former Monsour Hospital. That property
15 was very blighted, had been abandoned for
16 decades. And it's in the City of Jeannette.
17 And now it's under contract for redevelopment.
18 That was the use of the land bank's judicial tax
19 sale acquisition power that allowed the land
20 bank to acquire that parcel and now put it into
21 the hands of a new developer that's going to
22 bring taxes and benefits to that community.
23 The second part of this is clear title.
24 And clear title is important, as An testified.
25 There are Intergovernmental Cooperation 95
1 Agreements, where the municipalities and they
2 agree that any property that the land bank
3 takes, they'll extinguish the liens and they'll
4 have clear title to the properties, which scrubs
5 it clean and enables it to be transferred to a
6 new owner.
7 So that is being used across the
8 Commonwealth. The land banks are negotiating
9 these Intergovernmental Cooperation Agreements
10 with the taxing bodies, so that everybody is on
11 the same page. The taxing bodies are partners
12 with the land banks in bringing these properties
13 back into productive use and they do that
14 through these Intergovernmental Cooperation
15 Agreements.
16 The third element is the transfer of
17 properties to new owners. And you've heard
18 testimony from George, from An, from Pat and
19 from others and Herb that properties are being
20 transferred. That the land banks are moving
21 properties from vacancy and abandonment into the
22 hands of new owners and the land bank statute
23 and the framework provide an opportunity for
24 enormous community input and community
25 participation in that whole process. 96
1 Land banks have to prepare and submit
2 for public comment policies and procedures that
3 are subject to public comment. Those policies
4 and procedures will govern how land banks
5 acquire property, how they dispose of
6 properties, who is going to get the properties
7 and for what price. So the process really
8 supports a community investment in the
9 redevelopment of these properties.
10 So for some of the factors that
11 contribute to the success, I would have to say
12 local leadership is clearly at the top of the
13 list. You've heard this morning from land bank
14 leaders who, you know, have been the pioneers.
15 They've gone forward, they've taken the risk,
16 created the land bank, been very creative in
17 establishing ways to fund and operate their land
18 banks.
19 An's discussion about the scrape of
20 taxes and the way they've reached out to the
21 philanthropic community to get support is just
22 an example of what land banks across
23 Pennsylvania are doing to try and fill in the
24 needed resources to bring those land banks to
25 fruition. The other key to the success is, 97
1 besides the local leadership, the creative
2 problem solving is the framework of the Act
3 itself. It really provides a way for the
4 community to become involved. It builds public
5 trust and public support for the land bank
6 because all the taxing bodies have to be part of
7 that work.
8 The other part of it is that land banks
9 and the legislation support the use of already
10 available resources. We've heard testimony from
11 housing authority representatives, redevelopment
12 authority representatives and COGs that say, we
13 have existing entities, we're using those, we're
14 sharing services, we're sharing staff, but we
15 still are keeping our land bank mission
16 separate. We have our own board. And that land
17 bank board is who makes the decisions. Even
18 though it might be administered by the
19 redevelopment authority or the housing
20 authority, the land bank board works within the
21 parameters of the State statute, the local
22 ordinance and their by-laws and policies and
23 procedures.
24 Some of the challenges that others have
25 testified to include that this is hard work and 98
1 that it's expensive. A lot of the properties
2 have no value, so you have to be creative in
3 trying to match them with adjacent property
4 owners or assemble them for larger developments.
5 And then, lastly, the challenge is
6 SB 667. The Housing Alliance has put together a
7 position paper that talks about SB 667 and how
8 it would upset the progress that Pennsylvania's
9 land banks are making. And just to cover
10 briefly what those are, again, to focus on what
11 An also testified to, it abandons the local
12 focus and local control of dealing with vacant,
13 abandoned and blighted properties.
14 The Land Bank Statute empowers
15 communities, and SB 667 empowers redevelopment
16 authorities, but it doesn't give the same
17 responsibilities that the Land Bank Law gives to
18 the land banks. It merely gives powers to the
19 redevelopment authorities without the
20 corresponding responsibilities.
21 Secondly, SB 667 creates real risks for
22 land banks. There is no protection of their
23 territories as An testified to, and there could
24 be competition between land banks and
25 redevelopment authorities in terms of using 99
1 those special powers to acquire properties at
2 judicial sales.
3 The other key challenge with it is that
4 it blends the use of eminent domain and land
5 bank powers in one entity, which would be the
6 redevelopment authority. And then, finally, we
7 have a system that's working. It's really in
8 its infancy. It's showing signs of success and
9 should be allowed to develop and be used to its
10 fullest potential before there are real efforts
11 to change the framework for dealing with vacant
12 and abandoned properties in Pennsylvania.
13 I'm happy to take any questions that you
14 have.
15 MAJORITY CHAIRMAN M. KELLER: Do you
16 have some?
17 We have the Executive Director that has
18 a question.
19 EXECUTIVE DIRECTOR CASTELLI: Winnie, in
20 your experience with the 17 land banks that have
21 been established, could you just explain to us
22 the process to establish a land bank?
23 MS. BRANTON: Sure.
24 EXECUTIVE DIRECTOR CASTELLI: What
25 actually has to be done? Do you have an idea of 100
1 what the average cost would be to start up a
2 land bank?
3 MS. BRANTON: Yeah. What's great about
4 the land bank legislation is that it requires
5 the passage of an ordinance by either the local
6 government or the county. So the first thing is
7 an ordinance has to be passed. If it's a
8 multi-municipal land bank, you have to have an
9 Intergovernmental Cooperation Agreement so that
10 the municipalities all are on the same page and
11 they all agree that this land bank is going to
12 be operated together. So the first legal
13 document you need is an ordinance and perhaps an
14 Intergovernmental Cooperation Agreement.
15 The Housing Alliance has provided a lot
16 of training and technical assistance to
17 communities across Pennsylvania and has a wealth
18 of information on its land bank web page, which
19 is PAblightlibrary.com, which has sample
20 documents, ordinances, by-laws, policies and
21 procedures, articles of incorporation. Every
22 document that a land bank may have to create,
23 there are samples on the Housing Alliance's web
24 page.
25 And I would say we've looked at numbers 101
1 in terms of the costs of organizing, and as An
2 testified to, our number was also around
3 $10,000. But again, there are many documents
4 out there that communities are just sharing.
5 Plus, the network that you've seen this morning,
6 everyone is willing to help.
7 So if I might have a question about
8 George, how did you work out with the City of
9 Scranton the arrangement to get the ordinance
10 passed -- and in fact, I contacted George
11 because of the City of New Castle and the City
12 of Altoona were all in the same spot. Like
13 there was a county that has some capacity, a
14 city that has capacity. How can we work
15 together? And George was able to share with us
16 how he did that.
17 So I would say the cost estimate would
18 be around $10,000, but there's also a lot of
19 available resources and help that's for free.
20 EXECUTIVE DIRECTOR CASTELLI: Have you
21 heard any complaints that it's overly burdensome
22 or complicated?
23 MS. BRANTON: No. I think part of the
24 issue is, yes, it would be way more efficient,
25 right, if a redevelopment authority could just 102
1 exercise these powers; but efficiency is not
2 really what the goal is here. The goal is to
3 have a successful and community-supported and
4 publicly available process that's transparent,
5 accountable and nimble and able to respond and
6 help create markets for these properties that
7 have been dead to the market and just causing
8 problems in communities.
9 So I have heard very little, until
10 SB 667, that the reason why people weren't
11 forming land banks was because of the cost or
12 the efficiencies. You know, it's a process and
13 you want the community to be involved, but cost
14 has not been raised as an issue until SB 667.
15 MAJORITY CHAIRMAN M. KELLER:
16 Representative Dean.
17 REPRESENTATIVE DEAN: Thank you, Winnie,
18 for your testimony.
19 MS. BRANTON: Sure.
20 REPRESENTATIVE DEAN: And I note from
21 your testimony that it looks like you literally
22 wrote the book on Pennsylvania land banks. So
23 you're a good person to be in front of us. I'm
24 thinking about the fiscal impact. And I saw in
25 the testimony that An offered us just some of 103
1 the impact of the cost to municipal services,
2 the loss of tax revenues.
3 Through your office, do you have any
4 sort of important data points, fiscal impacts
5 that land bank legislation and ongoing program
6 development across the State is having on our
7 dollars, our fiscal impact?
8 We're here, and we're constantly looking
9 for how do we reduce property taxes. And it
10 seems like this has a direct impact in that
11 area, among others.
12 MS. BRANTON: A couple of points: one is
13 the Tri-COG's Cost of Blight Study that An
14 referred to is used universally across the
15 Commonwealth in educating local governments
16 about how much it costs. Now, some communities
17 have done their own superficially, but after
18 seeing what the Tri-COGs did in terms of
19 bringing all of that together, it's obvious.
20 Everybody that you talk to at local government
21 can say, we're spending money on police, fire,
22 on our code enforcement department.
23 All of these expenses that we're putting
24 out, we're getting nothing back in return. So
25 addressing blight in return is going to shift 104
1 those costs and expenses, but in terms of
2 gathering data yet on what a land bank is
3 achieving in terms of tax coming in, I think
4 it's too soon.
5 We were talking yesterday about the fact
6 that the bill is five years old, but the first
7 land bank wasn't created until six months after
8 that. The second one wasn't created until a
9 year after that. So many of these land banks
10 are just getting started. So in terms of having
11 data to show what their impact is, I don't think
12 that's available yet. But I certainly expect
13 that that will be collected over time and hope
14 that, you know, the legislature would be
15 interested in seeing that data as it's collected
16 and brought before you.
17 REPRESENTATIVE DEAN: Yes. And just
18 from An's numbers, just some very round numbers,
19 you know, $10 million in municipal services
20 going out and $8 million loss of revenue in.
21 And that's just those two data points. You
22 magnify that across the State, it's quite
23 remarkable.
24 MS. BRANTON: The loss of household
25 wealth, I remember seeing that data point and 105
1 thinking to myself, it's not just like the local
2 governments spending money on things and we're
3 paying taxes on that, but it's my property being
4 impacted. I've been called and asked, how can
5 we help homeowners who live near vacant
6 properties and abandoned properties get fire and
7 hazard insurance because they'll be dropped if
8 somebody goes through the neighborhood and sees
9 it or they'll have higher rates than others.
10 So there are costs that individual
11 homeowners are incurring that have to do with
12 the broader problem of blighted properties.
13 Understanding that and recognizing that is
14 really important.
15 REPRESENTATIVE DEAN: Okay.
16 I think An wanted to contribute.
17 MAJORITY CHAIRMAN M. KELLER: An, yes.
18 MS. LEWIS: Just to begin to speak to
19 your question, we have not done a follow-up
20 study on the improvement of structures, but we
21 have done a follow-up study on the effect of
22 blighted land and the stabilization of those
23 blighted lots and the improvement to the
24 community in Allegheny County.
25 And we have found that just simply 106
1 taking, in a regular community, simply taking
2 one lot and cutting the grass appreciates the
3 value around it somewhere between two and six
4 percent.
5 MAJORITY CHAIRMAN M. KELLER: All right.
6 REPRESENTATIVE DEAN: Thank you,
7 Mr. Chairman.
8 MAJORITY CHAIRMAN M. KELLER: All right.
9 Thank you.
10 Thank you, Winnie.
11 MS. BRANTON: Thank you.
12 CHAIRMAN M. KELLER: Appreciate it very
13 much.
14 I'm going to call the next two
15 testifiers up together, Ryan Kuck and Aaron
16 Sukenik.
17 First of all, I want to thank both of
18 you for agreeing to participate. Sitting
19 through land bank discussion may not have been
20 exactly what you two gentlemen actually do, but
21 I think the thought behind my madness was the
22 fact that there's a possibility of working
23 together with redevelopment authorities and land
24 banks with what each of you do.
25 So with that, I'm going to turn it over 107
1 to Ryan and let you start.
2 MR. KUCK: Thanks. Good morning.
3 Thanks for the invitation, Ms. Goldbeck,
4 Chairman Keller and Chairman O'Brien, who
5 happens to be my Representative, who I guess is
6 watching, and distinguished Committee members, I
7 appreciate the opportunity.
8 As you said, I'm here to share a little
9 bit of a different message, which is sort of the
10 power that urban agriculture can have in
11 situations like this to take the tool of a land
12 bank and other similar tools and hopefully have
13 benefits to an entire neighborhood or entire
14 city.
15 I'm Ryan Kuck. I'm the Executive
16 Director of Greensgrow Farms, which is a
17 nationally-recognized urban agriculture project
18 and rather unique in the world because of our
19 social entrepreneurship model. We're 20 years
20 old this month, which is a milestone I think few
21 if any of ourselves thought we would reach.
22 We're an urban farm in a post-industrial
23 neighborhood called Kensington in eastern
24 Philadelphia, which is rather notorious for
25 being the center of the region's heroin trade, 108
1 but it's also a really proud community with a
2 lot of resiliency and people that are used to
3 making a lot from a little, but it's still not
4 necessarily the place you would think of to
5 start growing lettuce.
6 We started with a pretty simple idea
7 that growing food closer to where it was being
8 eaten could be fresher, healthier, cheaper than
9 something trucked across the country and maybe
10 we can make enough money to create some jobs,
11 create a little profit for ourselves and maybe
12 take a corner of Philadelphia and create
13 something positive for the neighborhood. That
14 first year, we grew $30,000 worth of lettuce and
15 put it in a station wagon and took it downtown
16 to the fanciest restaurants in Philly.
17 Twenty years later, we're still working
18 on the profit piece, but we're a $2 million
19 social enterprise with over 30 employees making
20 living wages. We create linkages and improve
21 revenues for dozens of small regional farmers
22 that are looking for access through the urban
23 markets and really proving the agriculture is
24 important to the health and vitality of our
25 cities. 109
1 We're a non-profit, but over 80 percent
2 of our revenue is earned income, and the rest is
3 made up of grants and other contributions, which
4 is pretty rare in our field. Urban agriculture
5 is usually viewed as a charitable activity, but
6 I think we're a case in point that there is
7 economic value here. There is economic
8 opportunity here.
9 And if you look at the $400,000 houses
10 selling around the farm now, every single one
11 lists the farm in the MLS description. We have
12 a residual impact on the neighborhood that goes
13 well beyond what we can do individually.
14 Our farm is built on a super fun site.
15 We are a former galvanized steel site, an entire
16 city block in Kensington that was abandoned for
17 decades. It took years and years of activism
18 from neighbors to get the EPA to come in,
19 recognize what I quote very often as a real and
20 immediate substantial threat to public health,
21 to take that soil, deal with the dipping tanks
22 that kids were playing in.
23 Every time it would rain, contaminated
24 soil would wash out into the neighborhoods and
25 really were poisoning the neighborhood for many 110
1 years. And even after they were successful in
2 getting the EPA to come in and take out all of
3 the contaminated soil, clean up, cap with new
4 soil and clean the lot, it still sat vacant for
5 decades because no one could find value for this
6 piece of land.
7 And even though we weren't a direct
8 recipient of the land bank process, because as
9 you've heard, the Philadelphia land bank is
10 still achieving its full potential, I believe,
11 we were successful in that someone took a
12 chance. There was a process for land to be
13 taken from delinquent and irresponsible
14 landowners and given to a civic organization.
15 So our land is owned by the New Kensington
16 Community Development Corporation, a local CDC
17 that was a known entity and not just a crazy
18 person with a shovel who wanted to grow food.
19 That gave some legitimacy to the
20 project. And 20 years on, we think we've earned
21 the right to own it, but I'm working on that. I
22 think it shows how the idea of a land bank can
23 take risks on projects like this that can have
24 meaningful impact over the long term and give
25 them credence, give them legitimacy and give 111
1 them the opportunity to really develop and
2 flourish.
3 One of the things that I feel very
4 passionate about is that agriculture is often
5 viewed as an interim use. It's viewed as
6 something, you can clean and green a lot until
7 development happens. Maybe that is more
8 marketable or is seen as more conventional in
9 terms of building houses and other types of
10 development, but I really believe and I think
11 we've shown that having spaces like this,
12 dedicated green space, through a land bank
13 process that can prioritize and equate green use
14 of the situations, urban agriculture, other
15 parks as an equal development priority for our
16 neighborhoods and having that open and
17 transparent process that a land bank affords,
18 allows us to better plan neighborhoods and
19 better predict and get in front of other ways of
20 displacement and gentrification that are
21 happening in Philadelphia and make sure that
22 these resources are available to everyone, that
23 they have value and permanency in these
24 neighborhoods, even as other forces come in.
25 So we're still working on that. I think 112
1 we are very hopeful for what's been accomplished
2 from the land bank in Philly, as Mr. Wetzel
3 said, making sure we're inventorying and
4 protecting some of the gardens that haven't been
5 lost. We have half as many community gardens in
6 Philadelphia as we did 20 years ago when I
7 started this work because of displacement,
8 because we haven't had the tools to get in front
9 of things like the tax lien sales and other
10 things and just getting in contact with and
11 understanding who is taking care of spaces.
12 But land is wealth and this presents a
13 really unique and a powerful opportunity to give
14 tools and opportunity for people in these
15 neighborhoods to have real and immediate impact
16 on where they live and ways people cannot and
17 cheaper than other people can if you wait for
18 things to happen, from grants or from other
19 people stepping in from the outside.
20 In 20 years, our visions and programs
21 have changed considerably. You know, we used to
22 grow lettuce in recycled rain gutters, but now
23 we have 25,000 people a year that come to our
24 gates. Really, we're a destination, an al
25 fresco community center. 113
1 We have mobile markets that take farmer
2 markets on wheels to community centers and
3 schools. We have a community kitchen for small
4 scale food entrepreneurs to get a leg up. One
5 of our tenants won Shark Tank two years ago.
6 We have the city's largest independent
7 garden center and do a tremendous amount of
8 workshops and all kinds of educational programs
9 that all help not only sustain our bottom line
10 but again provide that impact and make sure that
11 we're following the credo that I have, which is
12 the farm has to find value for everyone in the
13 neighborhood.
14 We can't just serve the people looking
15 for organic lettuce. We really have to find
16 value for every single person in that
17 neighborhood, and I think we're really
18 successful in doing that.
19 But land rights and land tenure is
20 really important for allowing us to have tools
21 to build capital to invest in the future or in
22 the next couple of years, being able to take a
23 loan on the land to build a barn or whatever the
24 next infrastructure piece is. It's something
25 that's really important. And making sure that 114
1 these tools give legitimacy, give long-term
2 leases to projects. It's is important to make
3 sure these projects are successful.
4 We came across this recently. We opened
5 a new satellite farm in west Philadelphia and
6 what took nine months in 1997 to get this farm,
7 it took me four years to get just a year-to-year
8 lease for this new plot of land because of all
9 of the challenges facing how land is disbursed
10 in Philadelphia and the different mechanisms as
11 other testifiers were describing to aggregate
12 parcels and figure out who the ownerships are
13 and transfer them.
14 So this process, it is happening, but
15 it's definitely something that we could use more
16 tools to do more efficiently and more actively.
17 I think that's it.
18 I'm happy to have a lot more, but in the
19 interest of time, I'm happy to take questions
20 and talk about specific details about our
21 operation and business. And I definitely
22 welcome everyone to come visit the next time
23 you're in Philadelphia.
24 We're a lovely place, especially in
25 December. We have Christmas trees and wreaths 115
1 and all kinds of things all over the place and
2 lights up. It's as close as you can get to
3 going out to the country and chopping out your
4 own tree, is to come to Greensgrow and walk
5 through the whole forest. It's a pretty magical
6 time.
7 Thanks. Thanks again for the
8 invitation.
9 MAJORITY CHAIRMAN M. KELLER: Thank you.
10 Aaron.
11 MR. SUKENIK: Yeah, sure. Well, thank
12 you for having me. Good morning. I think it's
13 still morning.
14 So I'm the Executive Director of the
15 Hilltop Alliance, and the Hilltop Alliance is
16 actually not an urban agriculture organization.
17 We're an umbrella community development
18 corporation for a coalition of 11 south
19 Pittsburgh neighborhoods.
20 The geographic area of the city, if
21 you're familiar at all, is kind of above and
22 beyond Mount Washington and the South Side. And
23 speaking of Mount Washington, the Mount
24 Washington CDC is actually one of our member
25 organizations. And between 2005 and 2015, the 116
1 Mount Washington CDC led the formal creation of
2 what's called the Emerald View Trail Park.
3 So through trail development, signage
4 and maintenance, they measured that effect and
5 found that they saw a value, an average increase
6 value of 15 percent on streets with well-managed
7 trail entrances compared with values of like
8 properties. So a light bulb went off for us
9 that maybe there's something in this green space
10 asset development area that we should look to
11 scale.
12 So going away, though, from
13 Mount Washington, the other Hilltop
14 neighborhoods have only seen really decades of
15 decline. The median value of homes in the
16 Hilltop are approximately a third of the city's,
17 so ranging from $25,000 to $75,000 median,
18 compared with $150,000 at the city median.
19 So this green space asset development
20 was prioritized as a way to restore homeowner
21 equity. And this is important, specifically,
22 because, you know, restored homeowner equity
23 provides the ability to finance long deferred
24 home improvements and maintenance. And also,
25 knowing roughly, how much you're affecting 117
1 increased value, you know, that controlled
2 growth through green space asset development
3 makes it a market base benefit to buyers and
4 also a justification for making the investment
5 in the first place. But the added equity really
6 prevents long-time homeowner displacement
7 through the ability to safely stay in their home
8 borrowing against higher appraisals in the event
9 of something catastrophic.
10 So really what I'm underlining here is a
11 lot of people in the neighborhoods, if their
12 roof collapsed tomorrow, they could not draw
13 equity or have the savings to fix that. So as a
14 strategy for building community, you know,
15 through quality of life and through facilitating
16 economic development, we began this business
17 line of green space asset development, both
18 large and small. You know, our mantra really
19 with it, though, was to be highly strategic and
20 know exactly what else we're really striving to
21 leverage.
22 So a few examples of those are adjacent
23 -- and also, you know, with these examples, the
24 additional value that they add that I'll remark
25 on -- adjacent unbuildable lots, which is, you 118
1 know, I heard a lot of folks referring to land
2 assemblies. This is basically a land assembly,
3 but one thing that we did was assemble the
4 properties with the city on the site of the
5 historic curved incline called the Knoxville
6 Incline and created a greenway.
7 So many of the houses' backyards, you
8 know, abut the greenway, the official greenway
9 now, of what used to just be vacant land. And
10 it now acts as a defined transportation asset
11 that also connects two neighborhoods and their
12 business districts.
13 So just in the past couple of years,
14 we've seen houses abutting the greenway selling
15 for 30 to 40 percent more. So that's about a
16 $70,000 price point compared to a $90,000 price
17 point. With individual vacant lots, we started
18 this Lots of Flowers Program, which we've been
19 really utilizing the city's Adopt a Lot Program
20 and paying for a contractor to mow, till and
21 plant wildflower seeds and put worms in the lots
22 and having a nearby resident steward the site to
23 water, pick up litter, things like that. And
24 the signage is showing the types of things being
25 grown, kids love it. 119
1 And while it is too early to really
2 measure the effect on sale prices, the immediate
3 cost savings is maintenance in the city's mind.
4 So the installations cost us about $3,000, and
5 it will require one mowing per year. And the
6 city currently pays approximately $1,500 per
7 year to mow each vacant lot, okay. So this
8 could essentially repay itself in two years with
9 no thereafter maintenance costs.
10 Neglected parks was another big one. We
11 partnered with the Park Conservancy to complete
12 master plans for parks and then pursued pretty
13 high valued grants with national philanthropy
14 sources. So we did get a $700,000 capital
15 reinvestment grant in one of those parks. And
16 that was then able to leverage another $50,000
17 for low-income homeowner exterior renovations,
18 which then -- and all of those homes are
19 actually on the three blocks that face the area
20 of the park that's getting this $700,000 capital
21 improvement.
22 And then additionally, in the next two
23 to three years, we'll have site control of six
24 vacant homes on those same three blocks that
25 we'll then renovate and rehab for, you know, for 120
1 probably an affordable sixty, roughly sixty to
2 eighty percent median price point. And we're
3 doing that through the city's property reserve
4 process, which is -- gosh, it's certainly not a
5 land bank, but basically, community development
6 organizations work closely with the city to be
7 able to put properties through the clearing
8 title process that then are tagged for the
9 community development organization to acquire
10 from the city.
11 And then lastly, which I think is the
12 main reason why I'm sitting here, is large
13 vacant land. So through some community
14 planning, we identified significant vacant
15 property and acreage owned by the city's housing
16 authority. It was formally a barrack style
17 apartment complex built at a time when really
18 the city's population was at its peak, so that's
19 in the early '50s. But by HUD definition now,
20 and by current HUD scoring criteria, the site
21 actually ranks very low for affordable housing
22 because it's got limited public transit, it's
23 not within walking distance to business
24 districts or job centers. So it's really
25 relatively isolated from the other business 121
1 districts in the area.
2 So agreeing that some sort of housing
3 should still be on the site, and also, you know,
4 we would have to comply with that under the HUD
5 deed and trust on the property, you know, we
6 still sought to do something transformative with
7 a large portion of the site. So this became
8 this hilltop urban farm project on approximately
9 20 acres of the site.
10 So by having such significant acreage,
11 the urban agriculture opportunity there will be
12 at a scale that makes it really more financial
13 viable than a lot of smaller urban agriculture
14 projects that you see in cities. So over the
15 course of community planning and engineering
16 site assessment, the final plan includes a youth
17 farm, a production farm, including an on-site
18 farmer's market, an events barn, a community
19 farm and garden plots and a farmer development
20 program.
21 So the farmer development program, which
22 is the one I usually get asked the most about,
23 will serve really a need in the workforce
24 development gap in the local food production
25 economy. So it will train interested growers on 122
1 enhanced growing, not only that, but the
2 business of farming and creating marked value
3 added products. So at the end of a couple of
4 years, they'll be in both a business and growing
5 advanced position to be able to lease rural land
6 in Allegheny County that's currently -- I
7 believe I heard the other day the median age of
8 a farmer in Allegheny County is 71.
9 So a lot of that property is either, you
10 know, going to become more housing development
11 or sit fallow. So what the local land trusts
12 are trying to do, including the Western PA
13 Conservancy and the Allegheny Land Trust, is try
14 to acquire those properties to get farmers to
15 lease because they might not be able to afford
16 the acreage. And so what we're doing is
17 creating that pipeline of potential leasees.
18 So even though it's very early, you
19 know, in the development, the project has
20 already, you know, gotten to be something of a
21 regional identifier. And it will be the largest
22 truly urban farm in the country and just within
23 steps of residential neighborhoods that, you
24 know, have seen, up to this point, about, you
25 know, five decades of decline and disinvestment. 123
1 So that's it.
2 MAJORITY CHAIRMAN M. KELLER: All right.
3 Thank you. Very interesting stories and
4 information.
5 Any questions from any of the members?
6 Yes, Representative Dean.
7 REPRESENTATIVE DEAN: Thank you both for
8 your testimony and the innovative stuff,
9 although as you say, 20 years in the making, so
10 not brand new. What I think is fascinating
11 about it is the notion of talking about the
12 issue of hunger. An awful lot of people in
13 Pennsylvania know that we are an agriculture
14 rich State and would assume that our hunger
15 level is low, and it isn't.
16 I'm from Montgomery County, 800,000
17 people in that county, 10 percent of whom are
18 hungry. You know, that's 80,000 people in
19 Montgomery County. And your county of
20 Philadelphia, your number is twice that plus.
21 So what I think is cool is that in
22 addressing different problems, whether it's
23 blight or you're adding value through green
24 space development and trails, you know,
25 improving property values where you are, you're 124
1 also tackling another issue that we ought to be
2 able to tackle here in Pennsylvania because we
3 are agriculture rich. So I just commend you for
4 the innovative stuff you're doing. And maybe we
5 see those numbers decrease.
6 Thanks a lot.
7 MAJORITY CHAIRMAN M. KELLER: Quick
8 questions from me.
9 Ryan, you spoke about agriculture on
10 wheels --
11 MR. KUCK: Agriculture on what?
12 MAJORITY CHAIRMAN M. KELLER: On wheels.
13 MR. KUCK: On wheels, yes.
14 MAJORITY CHAIRMAN M. KELLER: Can you
15 elaborate a little bit on that?
16 MR. KUCK: Agriculture on wheels, we
17 have a mobile market. So they're pretty popular
18 around the country. No one has quite figured
19 out how to make them sustainable, but we give it
20 a try. And actually a big part that helps is
21 the WIC-managed Farmer's Market Nutrition
22 Program.
23 So I would say sometimes 70 to 80
24 percent of our income from the mobile market
25 comes from these vouchers that seniors don't 125
1 have a place to redeem because you have to
2 redeem them with a farmer, and there aren't that
3 many farmers in Philadelphia.
4 So programs like that are really the
5 bread and butter and allow us to go and try new
6 things in these neighborhoods, these sort of
7 incentive programs. But yeah, so we have --
8 basically, we took an old bread truck. We have
9 fruits and vegetable and we go out in the
10 neighborhoods and try to find partners with
11 community centers, schools, health centers,
12 basically anyplace there's a conglomeration of
13 people in one place at one time and try to put
14 fresh fruits and vegetables at an affordable
15 price in those places where those people are.
16 MAJORITY CHAIRMAN M. KELLER: Well, one
17 of the things that I've been investigating --
18 and I think I read an article that Ohio does it
19 -- it's called bus stop farmer's markets. You
20 know, it might be something that if the
21 legislature can help identify that with you and
22 make some of that happen, I could see that tying
23 together with that.
24 Aaron, on your side, have you reached
25 out to the veteran groups in establishing 126
1 veterans being involved in that farming facility
2 and actually being able to go out and lease
3 those pieces of property?
4 MR. SUKENIK: Yeah. And I know,
5 actually, the Veterans Leadership Program in the
6 county is located in south Pittsburgh. So we
7 have been working with them. Also, we've been
8 working with them a little bit on housing
9 related things, too.
10 So I don't know what internally their
11 pipeline is, necessarily, but I mean we
12 definitely have a preference for, especially
13 south Pittsburgh-based individuals and entities.
14 And actually another thing, just
15 speaking of that, we have a relatively sizeable
16 Bhutanese refugee community also. And so the
17 community farm plots concept, which is next to
18 the community garden, is largely for that
19 community. And the reason is because prior to
20 them, you know, settling in south Pittsburgh,
21 they were in refugee camps for decades in some
22 cases. But prior to that, they were rural
23 farmers.
24 So, you know, they come to south
25 Pittsburgh with a real affinity for growing, you 127
1 know, their own food and the knowledge of how to
2 do so, which has been really good for their
3 participation in local community gardens of
4 helping educate, you know, local south
5 Pittsburghers, but they do have a preference of
6 how that would be laid out that's different than
7 what's necessarily our standard model for urban
8 gardens. So that's what the community farm
9 plots are.
10 MAJORITY CHAIRMAN M. KELLER: Okay. Any
11 other members?
12 Christine.
13 EXECUTIVE DIRECTOR GOLDBECK: Yes.
14 Thank you.
15 I wanted to focus on something you hit
16 on, reclaiming a property, planting wildflowers,
17 inserting worms. And I think the important
18 thing that I wanted to highlight about that is
19 land banks, and anybody really dealing, you
20 know, with the CDCs, land banks, there could be
21 high costs in the mowing of the grass, the
22 caring of these properties. So you're inserting
23 worms, planting wildflowers, and it's
24 essentially very low maintenance for about
25 $3,000? 128
1 MR. SUKENIK: Yeah, one mow a year in
2 October.
3 MAJORITY CHAIRMAN M. KELLER: Well,
4 ladies and gentlemen, first of all, thank you to
5 all of the testifiers. I certainly appreciate
6 you taking the time to spend with us today.
7 Members, thank you so much for being
8 here today to listen to the testimony. I
9 appreciate your indulgence and taking time out
10 of a non-session day to actually be here in
11 Harrisburg and listen to this hearing. So this
12 hearing is finished.
13 Thank you.
14 (Whereupon, the hearing concluded.)
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1 CERTIFICATE
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3 I hereby certify that the proceedings
4 are contained fully and accurately in the notes
5 taken by me on the within proceedings and that
6 this is a correct transcript of the same.
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10 Tiffany L. Mast, Reporter
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