February 15, 2012

Why Does Kansas City Need a Land Bank?

The failed Citadel Development in Kansas City. What would such a development spearheaded by a land bank look like? <p>Photo by Josh Smith.

The failed Citadel Development in Kansas City. What would such a development spearheaded by a land bank look like? Photo by Josh Smith.

On Feb. 8, I testified in Jefferson City before legislators who are considering a bill to create a land bank in Kansas City. I was there to talk about the track record of a land bank that we already have in Missouri. You may know it as the Saint Louis Land Reutilization Authority (LRA). According to our research, the LRA has frequently rejected offers to buy vacant city property, and has practices that seem to invite political favoritism.

The bill being considered, House Bill 1659, would grant a Kansas City land bank the powers that the LRA currently enjoys, and more. I wonder why Kansas City needs a land bank, given the lack of successes that we have seen in Saint Louis. In fact, there already is a government entity that deals with vacant land in Kansas City. The Jackson County Land Trust currently takes ownership of tax-delinquent properties that fail to sell at tax auction, and works to sell them.

It may seem confusing, but the actions of a land trust can be drastically different than those of a land bank. A land trust generally does not attempt to acquire property for development nor does it take an active role in deciding what the best use of the property might be. A land bank can do both of those things.

As we have seen in Saint Louis and elsewhere, city government can do a very poor job when it comes to identifying successful future developments. The LRA is an example, as is Ballpark Village in Saint Louis. The failed Citadel Development in Kansas City (pictured above) provides perhaps the starkest, most recent example.

HB 1659 would require that all property the Jackson County Land Trust holds within Kansas City be transferred to the Kansas City Land Bank. During the House hearing of HB 1659, the bill’s co-sponsor, Missouri Rep. Michael Brown (D-Dist. 50), stated that this legislation would only involve property for which there are “plans.” Does Kansas City really have plans for all 2,800 parcels within its boundaries that the Land Trust currently holds?

Brown also noted that the Jackson County Land Trust is having difficulty returning property to private, productive use. Yet, in August 2003, the Kansas City Star reported that, since 2001, the Jackson County Land Trust had sold more than 1,100 properties for more than $1 million. This is a faster rate of sale than what we have seen in Saint Louis.

The land trust owns approximately 3,200 parcels, with approximately 2,800 in Kansas City. According to the last state audit that examined the Land Trust’s operations, the trust held 3,087 parcels in August 1999. By comparing that number to the land trust’s current holdings, it appears that, in the course of selling and acquiring properties by default, the land trust has added just a little more than 140 parcels to its inventory during the past decade.

For comparison purposes, the LRA has added more than 800 parcels to its inventory. The LRA has acquired about six times as much property as the Jackson County Land Trust, and from a parcel base less than half the size of Jackson County.

What evidence is there that the Land Trust is doing a poor job of getting property back into private ownership? It appears, purely from a numbers perspective, that the Land Trust has done an adequate job of selling property. And yet, based on our review of the past eight years of its operation, the Saint Louis LRA has struggled – due to political and structural issues – to get vacant property back into private, productive use.

Shouldn’t the Missouri Legislature require evidence showing that the Jackson County Land Trust is inadequate and that creating a land bank is in the best interests of state taxpayers and Kansas City residents before passing HB 1659?

Rep. Brown stated during the hearing that “We don’t know all the wonderful things that could happen with this land bank.” Perhaps we do have a glimpse, thanks to Saint Louis, of the failures that could occur.

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