Lexington KY Land Bank is Proposed

According to the Tuesday January 22 2008 edition of the Lexington-Herald Leader newspaper, there is on the table a proposal for creation of a Lexington KY land bank.  First off:  what is a land bank?

A land bank is a means of acquiring vacant, tax delinquent, or neglected real estate (basically all of the property that is currently undesireable and not cared for by its present owner), and then is re-sold at a very low cost to a real estate developer that would revitalize the property for a new use.  Essentially, creating an economic revitalization in some depressed or impoverished areas of the local community.

The Lexington Kentucky Mayor, Jim Newberry has earmarked $2 million out of the Lexington KY budget for use in a possible land bank initiative.  The Downtown Development Authority has stated that a land bank would not be restricted to downtown only - that it could be used as a means of revitalizing the community anywhere within what is deemed as the Urban Service Area.

The $2 million that has been earmarked for this endeavor could be utilized to acquire individual tracts of land for sale in Lexington KY and piece them together to create 1 large parcel that would then be able to be sold to a developer for use in the new project.

It is explicitly understood that the land bank would NOT be utilized for investment.  Its purpose would be to acquire real estate, and then get it to a new owner for revitalization in a new project.  And eminent domain would not be used as a means of acquiring property - it would only be used as a means of getting a clear title.  Only properties that a seller wants to sell would be purchased.

Looking toward Louisville as a guide for this venture - in 1988 the Louisville and Jefferson County Landbank Authority was established, it wasn’t until 2006 that the legislation that allowed that to happen was expanded to cover other Kentucky cities in that metropolitan area beyond the Louisville city limits.

The Lexington Kentucky land bank would be overseen by 3 persons appointed by the city, school superintended and the governor.

By acquiring the property, the land bank will be able to pass hard requirements with the deed that would ensure whatever type of developmental requirements that they wanted as part of the development would be adhered to - anything from mixed use, to affordable housing requirements would ride with the deed to the developer.

One measure that the Louisville land bank authority has done is made an effort to go after blighted properties.  Property taxes on buildings get tripled if they are particularly poor condition.  This provides motivation for home owners to fix their property up - or to sell to someone else so they no longer have to pay the higher taxes on their real estate.

All in all, it should be a good way to generate new economic growth and development within the Urban Service Area for Lexington Ky.  Its worked well for the Louisville real estate market, and it should have a similar impact on the Lexington KY real estate market.

This proposal in conjunction with a preservation of the Lexington KY farms should help put the brakes on the urban sprawl, and pockets of blighted areas.  These areas can be in-filled by new development projects.  This will help the high density areas within Lexington, but it will also keep the farms in Lexington KY from being swallowed up from development pressures wanting to break new ground in high growth areas.  This proposal gets a big thumbs up and wish it nothing but the best of success.  The council is scheduled to meet in February to finalize this proposal.