General Assembly change would let Lynchburg apply $500 monthly derelict‑building penalty to commercial properties

City staff told council the General Assembly passed and the governor signed a bill removing a civil‑penalty exemption that had previously excluded commercial and industrial buildings from Lynchburg’s derelict‑building monthly penalty. City staff said, if council adopts the local ordinance amendment at its June 10 meeting, the city could begin assessing a $500 monthly civil penalty on derelict commercial properties in the same manner currently applied to derelict residential properties; the state bill takes effect in July.

Staff explained how the local enforcement process works: a building must be vacant, boarded and secured and disconnected from utilities to be declared derelict. Once declared derelict, the city must notify the tax‑record owner; the owner then has 90 days to submit a reasonable plan to demolish or renovate. If the owner submits an approvable plan, the city does not impose the $500 monthly charge; if the owner does nothing, the penalty can be imposed. The presenter said the $500 penalty is intended as an incentive to either rehabilitate or transfer property to an owner who will.

Council members asked how the penalty interacts with proposed demolition funds in the capital plan. A council member noted a proposed $750,000 demolition reserve in the CIP and asked whether the penalty and the demo fund overlap. Staff said the penalty revenues are deposited into the general fund and can be used to offset demolition costs but emphasized the city’s preference is rehabilitation rather than demolition. Staff also said demotion of commercial structures can be much more expensive than residential demolition; in some cases local code allows the city to impose a penalty up to the cost of demolition.

Council members discussed additional tools for property turnaround, including staff’s informal list of contractors who have previously purchased and rehabilitated derelict properties. Staff clarified that list is not an official vendor‑approved roster but a compilation they maintain of firms known to renovate derelict properties. Council members requested a forthcoming dashboard to help track derelict properties and noted barriers such as split heirs and unclear wills can complicate property turnover; staff said a dashboard is being developed and that they will explore partnerships with nonprofits to assist in complex title situations.

Council took no ordinance vote at the work session; staff said the derelict‑building amendment will appear for council action on June 10.