– LEGAL NEWS PHOTO BY CYNTHIA PRICE
Tim Burgess stands before a county map.
By Cynthia Price
Legal News
The Muskegon County Land Bank, and the land banks in other counties across Michigan such as Genesee (Flint), Ingham, and Kent, are working quietly behind the scenes to “get tax-foreclosed properties back on the tax rolls,” and along the way restore blighted areas, help ensure affordable housing, stave off “bad actor” landlords, and assist in community development.
“For so many years the tax-foreclosed properties were at the mercy of the market. We’ve seen what that has achieved,” says Tim Burgess, Muskegon County Land Bank Coordinator. “So many beautiful old houses in the core neighborhoods used and abused by landlords; we’ve even had some who would purchase buildings and never intend to pay taxes on them, but rent them out the whole time.”
Land banks buy tax-foreclosed properties that individual local governments do not want. The land banks then sell them at market rate, or close, to people who want housing or, under circumstances Muskegon County has not dealt with too often, commercial establishments. (The Land Bank has sold at least one commercial property where the owner is doing well operating a business in Twin Lake.)
Genesee County Land Bank, started in 2004 under the auspices of then-Treasurer, now- Congressman Dan Kildee, has been the model not only statewide but across the country. But the Muskegon County Land Bank has a feature no other land bank has: it operates entirely on its own, without funding from the county or any other governmental unit.
“We’re a non-profit island surrounded by the county of Muskegon,” Burgess explains. In order to get started the county gave the Land Bank a line of credit, paying back of which is the organization’s highest priority. But once that is paid off, Burgess says the Land Bank will have a nice chunk of change to continue its mission.
Burgess, formerly of the Neighborhood Investment Corporation, was initially a contractor for the land bank, but has now been hired by Muskegon County, working out of Treasurer Tony Moulatsiotis’ office. Even Burgess’s salary is paid out of the Land Bank proceeds. “I cost the taxpayer nothing,” he says.
Legislation which streamlined the tax foreclosure process (not to be confused with bank foreclosures) to put properties where back taxes were owed in the hands of county treasurers after only two and a half years, rather than the 4-7 years it had taken previously, facilitated the formation of land banks.
That helped eliminate blight which had resulted from that land being left unused, and kept property out of the hands of speculators and ruthless landlords. The legislation also set up the composition of land bank boards, at least to the degree that it mandated certain office-holders have a seat. Muskegon’s board consists of Moulatsiotis, who serves as chair; County Commissioners Jim Derezinski, Ken Mahoney, and Terry Sabo; Eric Hood, City of Muskegon; Kimberly Sims, City of Muskegon Heights; DebAckerman, representing townships of Muskegon County; Scott Drier and Scott Plummber, members-at-large.
The Land Bank was in the news at the beginning of the year due to its involvement with Crestview Estates mobile home park. Burgess says that after a heroic effort to clean up the park after a regular bank foreclosure, an out-of-area developer purchased it on a land contract. When the Land Bank found out that he was not paying his water bill, staff inquired and was told — though never formally — that the owner was “giving it back.”
As recently as February of this year, people who live there thought they were going to have to move, but the City of Norton Shores gave them a grace period until March 31, and Burgess and the Land Bank board found a buyer. Local developer Dave Medendorp stepped in, making a regularly financed purchase rather than taking it on land contract. Burgess says, “Dave’s got some unique ideas, he wants to relegate part of the park to rent out on a temporary basis to people who are coming in for some of our events and have RVs.”
Burgess points out that from 2006 when the Land Bank started through 2009, only 12 properties were sold, whereas since 2009, there have been over 150. Obtaining clear title to some of these properties is a challenge, and Burgess uses the services of attorney Joe Bush to work through those issues. Burgess often does some of the due-diligence legwork himself.
He has also twice (with a third time underway) used Expedited Quiet Title to speed the process up so buyers do not have to experience undue delays. “When properties are tax-foreclosed,” Burgess says, “most local title offices will often not grant title insurance unless there isdirect sign-off of the certified mailings sent in the foreclosure process. There is another in-state office that will insure for approximately $300 in extra charges per parcel. But once a case has been filed, the hearing must occur within ninety days.
The Muskegon County Land Bank Authority has gone to court over two important issues. In the first, the Land Bank sued a local municipality over holding-over of fees after a tax foreclosure. The court rightly ruled that such heldover fees are illegal. Burgess says that the Treasurer’s Office is willing to adding such fees to the minimum bid at the first tax auction, but after such time, fees are illegal, including asking new property owners for old utility bills or vacant building fees.
The Treasurer’s Office also won in court when it sued over fees resulting from not mowing or other maintenance of tax-foreclosed properties. The municipality involved claimed it was the responsibility of the Treasurer’s Office to do such property maintenance, but the court, citing state law, disagreed.
The Land Bank operates throughout the county, not just in the cities, and is now looking at consolidating some poorly-shaped properties in the Goose Egg Lake area.
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