City to explore regional land-use bank idea

Tuesday, January 5, 2021

McCOOK, Neb. — An amended state law approved by the Nebraska Legislature last session could be a way for small communities to finally clear up nuisance properties tied up with legal issues.

But it will take other communities to get on board, said City of McCook attorney Nate Mustion at the City Council meeting Monday night. Mustion reviewed with the council how LB424 amended the Nebraska Municipal Land Bank Act to allow small Nebraska communities to create land banks. Afterward, the council informally gave Mustion the go-ahead to contact near-by communities for possible involvement and to report back to the council.

The council seemed in favor of creating and using a regional land bank as a way to finally address dilapidated, abandoned properties. And it could benefit the entire area, said one city councilman. “Small towns are just as concerned as McCook is about nuisance properties,” Councilman Jerry Calvin said.

Under the amended law, regional land banks will have the authority to acquire, clean, maintain, and dispose of nuisance property and provides a way to clear title, remove taxes and capture 50% of property taxes for five years from refurbished, sold homes.

A requirement is that regional land banks must be comprised of more than one municipality, through interlocal agreements. Land banks must also have a board consisting of at least seven members, along with non-voting members and submit annual reports to the state and local entities.

The regional land banks would be funded with donations from public, private and charitable organizations and by charging each municipality a fee, based on a per capita figure. Mustion suggested $3.25 per capita, which would amount to $24,000 for McCook. Towns and villages already spend a lot of time and money on nuisance properties, so why not leverage that money more efficiently, Mustion said.

Nate Schneider, McCook City Manager, said later in the meeting that there is $25,000 allocated in this years’ budget for nuisance abatement.

Mustion relayed recent efforts concerning local nuisance properties, citing St. Catherine’s apartments and a house located one block from downtown, at 406 E. First, as examples. The city has struggled to rectify the property on East First but as with many other nuisance properties, it was beset with no clear title, existing liens and outstanding taxes. These issues put off local contractors who were interested in refurbishing it, Mustion said.

If acquired by a regional land bank, existing liens would be forgiven and the home could be refurbished, sold, and put back on the tax rolls. Proceeds from the sale would be put into a “kitty” to be used for other properties, Mustion said.

A land bank in Omaha is “staffed to the hilt” with directors, property managers and administrative assistants, Mustion said; he suggested using his law firm on an as-needed basis to bypass that, as his firm already has extensive experience in real estate law such as foreclosures and other real estate transactions. Each municipality in the land bank would have its own contract with the firm, he clarified later in the meeting.

Mustion identified12 communities in Southwest Nebraska that could be part of the regional land bank. He said Jon Schroeder, Frontier County attorney, has already expressed interest.

Councilman Jerry Calvin said St. Catherine’s is at the top of his list of nuisance properties and asked what could be done with that property. That property would require extensive funds to demolish or refurbish and Mustion said as land banks use pooled resources, there would be a distribution system to set aside money, if a municipality decided to forgo using revenue for several years to reserve funds.

A local land bank would not “take” people’s property, City Manager Nate Schneider clarified. Rather, it would be used for properties that are “just sitting there that nobody wants,” he said.

And there are plenty of then, according to Schneider, who said the Problem Resolution Team, that address nuisance properties, gets phone calls from neighbors complaining about properties and that some properties have been “on the list for years.” Demolition is not cheap, he added, with a recent demolition on West Fourth costing $15,000. A land bank could relieve some of those costs, he continued, and could make it easier to do more properties.

Councilman Darcy Rambali agreed. He said before he started working for a national delivery service, he was not aware of the number of properties in the area that are in disrepair.

McCook Economic Develop. Corp. director Andy Long weighed in and said the more communities that joined, the better, to have that initial capital. He suggested getting larger communities involved, such as Arapahoe or Grant, Neb.

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