As Philly land bank momentum slows, proponents want administration to take lead

Political progress on Philadelphia’s proposed land bank – which many advocates see as central to solving the vacancy and property tax delinquency crises – has ground to a near halt in recent months.

While the major players in City Council and the Nutter administration say they continue to support the notion of a land bank, there are significant unresolved questions over its leadership structure, its operational framework and the role individual district Council members will play in the sales of publicly owned land.

And those questions are getting little attention in this busy budget season.

In City Council, the land bank has been sidelined by the school funding emergency and the Actual Value Initiative.

On the Nutter administration’s end, the land bank is suffering from a lack of leadership, contends Councilwoman Maria Quinones Sanchez, the land bank’s primary sponsor. Sanchez, who introduced the first iteration of the land bank ordinance in February 2012, is growing frustrated with what she sees as deepening departmental gridlock and aimlessness that can only be broken by the mayor himself.

“Operationally no one is in charge of breaking the departmental silos to facilitate an honest discussion. We have departments with fragmented tools who need political leadership from the Mayor,” Sanchez said. “This is taking too long and we are losing too many opportunities.”

When told of Sanchez’s remarks Nutter spokesman Mark McDonald acknowledged the frustrations but said “the administration is looking at building a new system that takes time. As the mayor has said many times, we want to get it done right rather than get it done quick.”

Land bank progress has been stymied in council as well. Sanchez has asked Council President Darrell Clarke for a hearing on the land bank ordinance, but Clarke has so far declined to schedule one. He said there was no harm in waiting for the fall to hold a hearing, particularly given council’s crowded calendar.

“The problem is that we’re in the middle of trying to figure out AVI. We’re being asked to consider a series of measures to get money for the school. Clearly that has to take priority,” Clarke said.

These delays are beginning to frustrate land bank supporters – which include a wide array of community groups, CDCs, design organizations and the Building Industry Association – who contend that the land bank ought to be an essential element of the budget discussion.

“All this ties directly back to the vacant property issue. Getting vacant property back onto the tax rolls, or getting a bigger stick to use with tax delinquents, those are revenue issues, those are school funding issues,” said Rick Sauer, executive director of the Philadelphia Association of Community Development Corporations, which strongly supports a land bank. “So if this is part of the solution, why delay it another four or five months?”

The land bank proposal is designed to fix two glaring problems in the city’s land and tax management systems. The first is to consolidate city-owned land in a single agency and make it easier for developers, non-profits and individuals to acquire vacant publicly owned land.

A land bank’s second major role is to serve as an alternative to sheriff sale for some tax delinquent properties. State legislation enacted last October gives Pennsylvania land banks the power to seize past due parcels when the owners won’t pay up without exposing the properties to bidders at a public sheriff sale. This could help the land bank to acquire strategic parcels (to complete a site assembly, for instance, or to guide the redevelopment of a major property like the once-delinquent Divine Lorraine Hotel). The land bank also could become the eventual home for thousands of low-value, long-delinquent parcels that are difficult to sell off at sheriff auctions.

The Nutter administration wants the blight-fighting abilities these new authorities would create, and its support for the land bank has not wavered, McDonald said. He noted that a working group has been meeting nearly weekly, and pointed out that John Carpenter, a deputy executive director at the Philadelphia Redevelopment Authority with long experience at the local and federal levels, has been named to coordinate “this profoundly complicated issue.”

And yet fundamental questions remain unanswered. The presumption since December has been that the land bank would land in the Philadelphia Housing Development Corporation, which had hired city housing veteran Michael Koonce as its executive director.

But that decision is not at all final, it seems. “There are any number of institutional options and PHDC remains one of those options,” McDonald said in an email when asked if the land bank could be created somewhere other than within PHDC.

In some ways, the Philadelphia Redevelopment Authority – with more technical expertise, a larger staff and greater existing land holdings – seems like a more natural fit as the city’s land bank, and there are players within the administration lobbying for the PRA to get the land bank.

The problem is that the PRA’s poor performance in recent years has alienated council members, other city agencies and even senior members of the Nutter administration.

“Our reputation with City Council and our reputation with the administration is less than stellar,” acknowledged Redevelopment Authority interim executive director Brian Abernathy. Abernathy replaced Ed Covington, who abruptly resigned on March 1. (Look for more from PlanPhilly on changes afoot at the Redevelopment Authority later this week). “We need to prove that we can function well, that we’re competent, that we’re responsive to their needs.”

It will take quite a sales job to convince Council President Clarke that the Redevelopment Authority is up to the job. He flatly opposes putting the landbank in the PRA, given the “history of its inability to move product.”

Clarke’s skepticism is well-grounded. Sales of publicly owned land have indeed plummeted in recent years. But the council president’s concerns about the land bank go well beyond the Redevelopment Authority’s past performance.

To begin with, he lacks the enthusiasm for the land bank that most of its advocates possess.

“In all honesty, I wasn’t necessarily adverse to the current process,” Clarke said, “I personally as Darrell Clarke didn’t really have an issue with how we were disposing of properties.”

Clarke is not referring to the pace of land transfers, which he considers too slow. But he has no real objections to the rules governing the transactions. As it stands, district Council members wield complete veto authority over the sale of city owned land within their districts (a power derived not by ordinance, but by the tradition known as councilmanic prerogative).

Nonetheless, Clarke says he is willing to allow debate on a land bank (though probably not this session), and he may well vote for one himself. He supports the notion of consolidating city owned land, and he wants the city to have the power to seize tax delinquent property without exposing it to sheriff sale.

But Clarke says it is not clear how a land bank would be funded, how it would be governed and – most important from a political perspective – what role district council members would play.

“Council members have always held that the ultimate decision on disposition should be up to the district council person, because at the end of the day we’re the ones that are going to be held responsible,” Clarke said.

Critics of council prerogative have contended that such direct involvement by council members in land use questions opens the process up to abuse and favoritism, and some developers argue that the existing process forces them to spend money on consolidation and planning, only to see their plans upended at the last minute by the whim of a district council member.

But council prerogative is so ingrained that it is probably politically impossible to create a land bank that diminishes district council member authority. To begin with, City Council will have to approve the consolidation of parcels into a land bank. By dint of council prerogative, a district council member could opt to keep all publicly owned properties within their district out of the land bank, Clarke said.

That means the only way to build a truly citywide land bank is to get buy-in from all 10 district council members, Clarke and Sanchez both said.

Sanchez argues that the land bank ordinance as drafted manages both to preserve councilmanic prerogative while giving developers more predictability and increasing transparency.

District council members would be free to keep whatever parcels they choose out of the land bank altogether, and they would each get a seat on a reconstituted Vacant Property Review Committee. But those meetings would be open to the public, and the committee would have to make a decision within 60 days and provide a reason for any rejected land sale. These requirements would, in theory, make the process friendlier for developers while making it more difficult for council members to deny sales for petty or unreasonable reasons.

And yet none of those provisions have been agreed to by the rest of Council.

“To be honest, there’s not a consensus on any portion of that at this point,” Clarke said.

In Sanchez’s view, the lack of progress in Council is a secondary problem. It’s more important, she says, that the administration figure out how it would get a land bank up and running.

“With so much to still work out on the operations, passing a bill now without working things out will do nothing,” Sanchez said. “The land bank is not like a tax bill, if the administration is not truly on board, we cannot in City Council make it happen.”