This story was updated at 2:20 pm on Dec. 3, 2021, to reflect that the fifth member of the land bank board is someone who has real estate experience, not a township representative as originally reported.
EDITOR’S NOTE: This story is in response to a reader-submitted question through Open Source, a platform where readers can submit questions to the staff.
MOUNT VERNON — Local officials began exploring the idea of a county land bank in September 2017. Formally called the Knox County Land Utilization Corporation, the Knox County Land Bank™ officially organized in June 2018 and acquired its first properties that fall.
Statutorily, the land bank board consists of two commissioners, a representative of the county’s largest municipality (the city of Mount Vernon), the county treasurer, and someone who has real estate experience. Boards have the option to expand to seven or nine members.
The Knox County Land Bank™ board consists of the five individuals required by statute. Area Development Foundation officer(s) attend meetings; a representative of the Knox County Prosecutor’s Office and the city’s property maintenance enforcement officer also often attend, as do media representatives.
Revenue
The Knox County Board of Commissioners provided an initial, one-time grant of $67,000 to cover start-up fees for the land bank. Revenue sources since then include grants, property sales, and DTAC fees.
DTAC (Delinquent Tax and Assessment Collection) fees account for about $100,000 a year.
“Other than DTAC, the land bank has no other reliable sources of funding. The rest of it comes from project-specific grants or property sales,” Sam Filkins, vice president of the land bank, said.
Income varies from year to year. For January through October 2021, income was $746,796:
•DTAC 14% of income
•Grants 78%
•Property sales/leases 8%
For January through October 2020, the numbers look like this:
•Income $240,549
•DTAC 36%
•Grants 56%
•Sales/leases 8%
“We have received grants from numerous sources, including the state, county, and local foundations,” Filkins said. “Most of these grants are project-specific grants that help the land bank achieve its mission.”
Other revenue sources include $105,000 the land bank received in 2019 for its role in marketing the former New Hope Industries site on Newark Road. Also in 2019, the land bank received $5,000 for its marketing role in selling the former fire station on Ames Street.
Property acquisition
Land banks acquire property in a variety of ways, including purchase, donation, foreclosure, direct transfer or deed-in-lieu of foreclosure.
Land bank acquisitions for December 2020 through November 2021:
•Five properties purchased for $527,501 (one sold for $5,000)
•Five donated properties at 0 cost (two sold for $101 total revenue)
•Four foreclosures ($4,000 in court costs/expenses; two properties sold for $23,000 total)
The purchases include 503 W. High St., which the land bank bought for $500,000 using local grant money.
Filkins acknowledges that the land bank does not always make money when disposing of property, but points to the land bank’s mission of making a positive impact to the community through the “highest and best use.”
“For example, purchasing 517 E. Burgess St. and tearing it down cost us a lot more than we sold it for when we sold the lot to Habitat for Humanity,” he said. “Still, the positive impact on the neighborhood is immeasurable.
“Likewise, getting a vacant property donated that has been tax delinquent for 10 years and then selling it at the market rate is nice, but more importantly to the community, that parcel now has an owner who will be paying their taxes for generations.”
Filkins said both of these instances are examples where the imperfections in the market (extreme disrepair, title issues, or environmental problems) prevented sales.
“The land bank, because it does not have a profit motive, found the best use for the property even though it did not make a profit,” he said.
Relationship with ADF
In addition to the land bank’s development process and revenue stream, our Knox Pages reader wondered about the relationship between the land bank and the Knox County Area Development Foundation.
In June 2018, the land bank contracted with the ADF to manage the day-to-day operations of the land bank. The land bank functions of planning and development of public/private partnerships, identifying target areas for revitalization, and establishing long-term goals align with those of the ADF.
“The land bank supports ADF’s economic development mission by providing innovative tools and legal protections that help to create jobs and improve housing in Knox County,” Filkins, who is also vice president of the ADF, said. “It was a logical and efficient choice to have the ADF run the land bank.”
The land bank and ADF boards operate independently so that they can maintain autonomy. ADF is a private nonprofit entity; the land bank is a public one that follows open meeting and public records laws.
“It is also subject to financial oversight by the Auditor of State,” Filkins said. “The land bank is committed to retaining transparency and operating in the public interest.”
Filkins noted that some counties hire staff to run their land bank.
“The contract amount for ADF is significantly less expensive compared to what the cost would be for salary, benefits, office space, and supervision,” Filkins said. “So, in short, it saves the county money to contract with ADF to run the land bank.”
The $45,500 annual contract runs through Dec. 31, 2033.
