Three months after state Attorney General Eric Schneiderman asked established land banks around the state to apply for seed money to get up and running, the Capital Region learned how it fared in the competitive application process: Sorry, try again next year.
The Capital Region was one of two regions in the state to be shut out of the first round of more than $12.4 million in grant funding for land banks, awarded under the Attorney General’s Land Bank Community Revitalization Initiative. The $20 million program is providing funding over two years from a 2012 national mortgage settlement to help communities rebuild neighborhoods hit hard by the housing crisis.
Capital Region officials, who had high hopes for the revitalization of vacant and foreclosed properties through the statewide land bank initiative, expressed disappointment at the outcome Tuesday.
“While we’re disappointed we didn’t get the money today, we probably wouldn’t have been able to use it until next spring anyway,” said Schenectady Mayor Gary McCarthy. “Our application will be more refined the next time around and able to identify specific properties that we want to demolish or rehabilitate.”
Schenectady was the first local municipality to express interest in a land bank, even before the state Legislature passed a 2011 law to establish them. Land banks are nonprofit organizations that can acquire vacant, abandoned or foreclosed properties and choose to rebuild, demolish or renovate them. The intended result is lower costs for local governments and schools, crime reduction and a boost in the local economy.
Convinced a regional land bank would have more success than a single municipality, Schenectady persuaded the city of Amsterdam and Schenectady County to partner on a regional proposal last year. The cities of Albany, Troy and Rensselaer decided against joining at the time — though since then, Albany has reconsidered and is in the process of making its partnership official.
McCarthy wondered Tuesday if the Capital Region was being punished for the broad region its land bank would encompass. Six land banks around the state were awarded $675,000 to $3 million Tuesday to demolish or renovate blighted, vacant and abandoned homes. But those land banks encompassed just a single city or county.
“You have to understand the frustration of dealing with the state at the local level,” said McCarthy. “They talk about wanting consolidation and regional approaches to local issues, so we did all this stuff to get other entities lined up for the land bank, and now we’re being penalized for doing just that.”
Other local officials wondered if the Capital Region was shut out of funding simply because the region was less affected by the subprime mortgage crisis than others. The land bank initiative was designed to address the effects of the housing market collapse — which included bank foreclosures as opposed to tax foreclosures. The Capital Region had one of the lowest rates of bank foreclosures in the nation.
“It was a competitive grant process,” said Steve Strichman, executive director of the Capital Region land bank. “I don’t really know why we didn’t win. The other areas might have been impacted more by the crisis. We’re going to look into it in the next couple of weeks. Was the state going to award money to all eight land banks? Probably not.”
McCarthy pointed out the land bank is not the only tool in the city’s arsenal to deal with foreclosed and blighted properties. The city’s efforts will not stagnate until next year, he said..
“The land bank, in my mind, is not the first resort on this,” he said. “We’ve got the H.O.M.E.S (Home Ownership Made Easy in Schenectady) initiative. We are bringing people out to houses and telling them, look, it’s a little bit challenging, but we can line up a construction loan for you, and in 180 days, you’ll have a house that’s built to your specifications.”
The Schenectady-Amsterdam land bank, the Land Reutilization Corporation of the Capital Region, did receive some money Tuesday. The Attorney General’s Office is providing small grants of $150,000 to the two land banks that did not receive funding in the first round to put toward staff support. The Capital Region land bank had previously received $100,000 in startup funding from the county and $50,000 from the city of Schenectady Industrial Development Agency.
The second round of funding applications will open in June 2014. Until then, local officials plan to sit down with officials from the Attorney General’s Office to identify areas for improvement in the application process.
Robert Hoffman, chairman of the Capital Region land bank, said the shutout in round one funding is a bit of a setback for the land bank’s timeline to acquire properties. Eventually, the hope is to get enough seed money that it doesn’t have to rely on outside funds.
“Hopefully once we get some assets and some projects underway, we can generate our own funds,” he said. “Yes, without that first round funding, we’re going to start a little slower here, but we’re going to proceed, and we’re not going to stop our efforts.”