ACTION REQUESTED:
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Communication from the City Manager and the Community Development Director with a Request to ADOPT an ORDINANCE Amending CHAPTER 5 of the CODE of the City of Peoria Pertaining to the Establishment of the CITY OF PEORIA LAND BANK.
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BACKGROUND: This request is to amend Chapter 5 of the City of Peoria Code to establish a City of Peoria Land Bank. Due to the timing involved with working with the Illinois Housing Development Authority (IHDA) and State of Illinois Attorney General’s Office (AG), we respectfully ask to skip the first reading traditionally required of ordinance changes and move to adoption of the changes.
The City of Peoria Community Development Department continually explores innovative solutions to improve neighborhoods, reduce blight, protect property values, and increase public safety. Over the last few years, the department has utilized many strategies related to land banking. Strategies have included:
• Demolishing vacant, abandoned, and blighted buildings.
• Obtaining judicial deeds via the abandoned property state statute.
• Transferring vacant lots through the side-lot program.
• Salvaging valuable building materials in partnership with local provide architectural salvage companies.
• Partnering with banks related to bank-owned properties and properties in foreclosure.
Through these activities, the Department has been able to make significant progress to reduce blight in Peoria. Direct examples of progress over the last few years include:
• Obtaining over $1.3 million in Federal and State Grants for Demolitions.
• Obtaining over $2.1 million in Brownfield Assessment and Clean-Up Grants.
• Supporting affordable housing projects in the North Valley and East Bluff through a construction partnership with Habitat for Humanity.
• Supporting affordable housing projects in the East Bluff through a partnership with the Peoria Opportunity Foundation and the Illinois Facilities Fund (IFF).
• Assisting with the creation of community garden initiatives in the South End, North Valley, and East Bluff.
In 2018, the Community Development Department received a grant from IHDA for $150,000 to explore the feasibility of creating a land bank in the City of Peoria. Through this grant, the City of Peoria received $50,000 for technical assistance related to the feasibility and current process improvement and $100,000 that would become available pending the results of the feasibility study if the City chose to create a land bank.
The feasibility study highlighted the work the department was already doing and weighed the value of establishing an official land bank in Peoria. Because there is no current funding stream in Illinois for the operations of a land bank, staff has been reluctant to move forward. The City has asked our State Legislative Representatives to support changes at the State level that would provide direct funding to land banks to fund revitalization efforts and additional blight reduction strategies. As of April 2021, that legislation has not passed.
However, due to the strength and reputation of the Community Development Department as a leader in innovative solutions and best practices, IHDA and the Illinois Attorney General’s Office proactively approached the department in March about providing additional funding so the City could move forward with the creation of a land bank. The City is being offered an additional $200,000 grant to create a land bank. This funding is in addition to the $100,000 remaining in the original land bank grant awarded by IHDA in 2018. In total, the Community Development Department has access to $300,000 in State grant funding to form a land bank. The funding would allow the land bank to be staffed for two years. A significant amount of time and research has been put into this effort by City Staff and our technical assistance provider, Brent Denzin of Denzin Soltanzadeh LLC, because this will be the first City managed and controlled Land Bank in the State of Illinois. Due to the recognition of staff’s previous work, the Illinois Housing Development Authority is supportive of this direction and believes in the success of the model that has been created.
The funding is contingent on the City of Peoria creating a Land Bank. This funding will allow the City to bring back the position of Land Manager that was eliminated in 2018 due to budget reductions. In addition, the funding will pay for half of an additional staff member in the Legal Department who can focus on processing demolition and abandonment cases. The funding for the other half of the position will come from the General Fund in the amount of $25,000. The position will also focus on subrogation and insurance claims recovery as well as lien recovery. The last position that will be funded through this award is half of a Community Services Inspector in the Community Development Department who will be charged with completing the fieldwork related to the land banking activities and demolition program. The funding for the other half of the position will come from federal funds and allow the position to focus on additional federal grant work.
Staff believes that based on the funding offered, the City should move forward with creating a formal Land Bank in the City of Peoria. Creating a formal land bank will create opportunities in the future for additional funding and provide the City with more staff and resources to continue and expand its current activities. Multiple legislative proposals have been made to the State of Illinois that would funnel money directly to established land banks and this would allow the City to apply and access those funds in the future if passed by the State Legislature. Additional tweaks may need to occur to our structure, but the foundation will have been created.
The Purpose of the City of Peoria Land Bank
The City of Peoria Community Development Department understands that safe, affordable housing opportunities for all residents in the City of Peoria is a key component of community and neighborhood revitalization efforts. This can be accomplished through code enforcement efforts, leveraging funds to maximize affordable housing development and a robust land management process. The City has been successful in its code enforcement efforts and its ability to leverage funds for affordable housing development. Unfortunately, due to a lack of resources, the Department has not been able to focus adequate attention on the land management process since 2018 when staff reductions were made in the Community Development Department and Legal Department. The staff reductions have led to a backlog of cases that need to go to demolition court as existing Community Development and Legal staff must accommodate those functions in addition to all their other responsibilities. This has prevented the City from pursuing many abandoned property cases where the property could have potentially been saved and put back on the tax rolls if the demolition wasn’t necessary. Based on current resources, staff must focus on properties that are beyond repair and must be demolished. The City of Peoria Land Bank will allow additional focus on land management activities.
The land management process includes:
• Identifying and obtaining properties before they deteriorate to the point of demolition.
• Land assembly for larger redevelopment projects.
• Improving the County Trustee Auction Process.
• Increasing the number of properties on the tax rolls.
• Maximizing resources to ensure adequate maintenance of publicly controlled parcels to avoid negatively impacting surrounding property values.
• Ensuring everyone understands the role housing plays in the public safety of a community.
The City of Peoria Land Bank will be a function of the City of Peoria Community Development Department with direction from the City Manager and governed by an appointed board. This will allow the Community Development Department to leverage existing resources when necessary and expand on its current processes. The City of Peoria Land Bank will work with Peoria County to expand intergovernmental cooperation allowing the land bank to use all tools and strategies available to reduce blight, increase property values, increase public safety, and create safe and new housing opportunities for all residents of Peoria.
Land Banks are not a new concept in the United States and have been very successful as a tool to remove blight from neighborhoods, protect property values, and return parcels to the private market. However, land banks are a relatively new concept in the State of Illinois. The creation of the City of Peoria Land Bank is a strategy that will take multiple years to get established and operating at a capacity that allows real change in our community. In addition, due to the housing market of the City of Peoria, additional strategies will need to be implemented in the future at the local or state level to fund additional operations to maximize the benefit. Hiring dedicated staff to work on the program is the first step which is what this ordinance and this limited funding will allow.
Land Bank Objectives
• Creation of City of Peoria Land Bank.
• Hire a Land Manager.
• Work to Enter into an Intergovernmental Agreement (IGA) with Peoria County that establishes the following:
o Work with the County to jointly exercise their authority for the common public purpose of combating neighborhood deterioration. Specifically, the County and City will focus on strategies to return vacant property to productive use, improve quality of life, stabilize the tax base and create opportunities for public and private investment in open space, housing, commerce, industry, and employment for County residents.
o Establish clear roles and processes to ensure better collaboration of the County Trustee Auction Program.
o Work with Peoria County to ensure properties purchased through the County Trustee Auction are sold to responsible property owners who will provide safe living conditions for future residents.
• Assemble contiguous vacant lots to support future affordable housing developments:
o Focus on MacArthur area in 61605 to coincide with planning efforts.
o Identify blocks in 61605 where a public entity is in control of 30% of parcels.
• Assemble and market vacant lots throughout Peoria that could be made available for infill development.
• Create a resource tool kit for available resources in the community to aid homeowners in making repairs to their existing properties.
• Work with the Peoria Area Association of Realtors (PAAR) to identify homebuyer incentives that are available to residents.
• Create an online presence that promotes the following:
o Development Opportunities of vacant City-owned lots.
o Side Lot availability through the City of Peoria.
o Properties obtained through the abandoned property process will allow us to connect responsible property owners to available properties to prevent demolition.
o Available resources to help bring a property into compliance.
• Explore sustainable funding sources for the future growth of the program:
o Explore additional grant opportunities for land banking activities.
o Explore funding opportunities for demolition activities.
o Advocate for State legislative changes that allow landbanks to be sustainable long-term tools to decrease blight in communities.
• Work with banks who become property owners in Peoria to demolish blighted structures or donate them to the City of Peoria.
• Create a data-based approach to identify properties as soon as they meet the abandonment criteria and intervene before they sit vacant for so long that they need to be demolished.
City of Peoria Land Bank Board
The Land Bank Board will be comprised of the following:
• Three At-Large City Councilmembers, appointed by the Mayor and approved by the City Council.
• The City Manager, or their designee (The City Manager is the chairman of the Board.)
• The Community Development Department Director, or their designee.
• A representative from the Real Estate Community.
• A representative from Neighborhood Interests.
• Peoria County Treasurer or designee.
• County appointment by the County Board Chairman with the consent of the County Board.
The responsibilities of the Board include:
• Ensure that all operations including contractual matters are conducted free from any political interference; and
• Ensure efficiency in service delivery and sound fiscal management of all aspects of the land bank,
• Ensure all money specifically earmarked for the Land Bank is spent per the duties of the land bank.
The responsibilities of the Chairman of the Board include:
The Chairperson shall be the principal executive officer of the Land Bank and shall preside over all meetings of the Board of Directors. Subject to any policies adopted by the Board of Directors, the Chairperson shall have the right to supervise and direct the management and operation of the Land Bank and to make all decisions as to policy and otherwise which may arise between meetings of the Board of Directors. The Chairperson shall have the right to supervise and direct other officers and employees of the Land Bank. The Chairperson shall give, or cause to be given, a notice of all meetings to the Board of Directors. The Chairperson’s duties shall include execution of all deeds, leases, and contracts of the Land Bank authorized by the Board. The Chairperson shall perform such other duties and have such other authority and powers as the Board of Directors may from time to time prescribe. The chairman of the Land Bank Board in their role as the City Manager of Peoria reserves all rights and powers bestowed upon them by the City of Peoria Code and State statutes.
The Chairperson has the authority to acquire and dispose of property on behalf of the landbank under the following terms:
Transactions less than $15,000 at their discretion
Transactions $15,000 to $50,000 with Board approval
Transactions over $50,000 with City Council approval
The Chairperson will provide a quarterly report to the City of Peoria Land Bank Board that details all transactions that have occurred.
Next Steps and Timeline
Upon approval of this ordinance, staff will have access to spend the $100,000 previously awarded and approved by the Illinois Housing Development Authority. IHDA is currently working on the amendment to the current agreement and anticipates that being completed in the next month which then provides the City of Peoria access to the additional $200,000 from the Attorney General’s Office. As both IHDA and the AG’s Office have acknowledged the approval of the funding, the City will follow the below timeline going forward.
May 11th - Council approval of creation of City of Peoria Land Bank
May 12th - Press Release is issued about the creation of a land bank and asking interested parties to apply to the Mayor’s Office for open board spots.
May 13th - Land Manager, Community Service Inspector, and Legal Administrative Positions are posted
June 8th - Appointment of Land Bank Board Members is brought to City Council for approval
June 8th - Targeted start date for new staff positions
The third week of June will be the first monthly meeting of the Land Bank Board - Meetings are held monthly.
Update from April 27th, 2021 City Council Meeting:
Land Bank Board - Based on the discussion, staff recommends adding two additional board members. Staff recommends adding the Corporation Counsel of the City of Peoria to ensure there is a legal perspective and expertise on the board related to land transactions and policies. In addition, staff changed the recommendation from one representative to two representatives of neighborhood interests and indicated they need to live in a City of Peoria neighborhood. In addition, staff recommends that the board members selected to fill these seats should not live in the same Council District. It is important to understand that the Land Bank represents the entire City and will be doing work throughout the City of Peoria and will not be focusing on one neighborhood or district. Vacant and abandonment of property is a city-wide issue and not specifically focused on one geographical area.
Public Information - On Thursday, May 6th, Assistant Director Dulin will host an informational meeting about the creation of the Land Bank and the next steps moving forward. The meeting notice was shared on social media, posted on Nextdoor, and email to the Neighborhood Associations. For those who could not attend the meeting, Assistant Director Dulin’s email and phone number were shared for anyone with questions or want to provide feedback. In addition, Assistant Director Dulin will be speaking to the PAAR Governance Board on May 6th. After the Land Manager is selected and the Board is in place, additional public input meetings will occur as the Land Bank works to make changes to the current policy surroundings vacant and abandoned properties in the City of Peoria.
Meetings of the Land Bank - A change was made to the ordinance from quarterly meetings to monthly meetings.
FINANCIAL IMPACT: The City of Peoria will receive $300,000 in funding from the Illinois Housing Development Authority to create the City of Peoria Land Bank.
NEIGHBORHOOD CONCERNS: Additional funding will allow more focus on blight remediation efforts to improve the conditions of our neighborhoods.
IMPACT IF APPROVED: The City of Peoria Lank Bank will be created.
IMPACT IF DENIED: The City of Peoria Lank Bank will not be created.
ALTERNATIVES: NA
EEO CERTIFICATION NUMBER: NA
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2017 - 2032 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Grow Peoria
2. Financially Sound City
3. Beautiful Peoria
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
2. Keep taxes and fees competitive.
3. Have an efficient government.
DEPARTMENT: Community Development