City attorney outlines how a land bank could help Andover manage blighted or remnant parcels

City Attorney JT Glass told the Andover City Council on Feb. 25 that a municipal land bank is a statutory tool the city could use to hold underutilized, blighted or remnant parcels until they can be returned to productive use.

Glass described a land bank as a separate, quasi-governmental corporation that can own, buy or receive land and then sell or repurpose it. "Think of the land bank in the same context of which you might think of a bank where you put your money and hope someday to have enough of it to place it back into productive use," Glass said. He said Kansas law permits the city to create a land bank by ordinance and to have the city's governing body serve as the land bank's board of trustees.

Glass outlined key effects and limits of land bank ownership: placing property in a land bank exempts the property from state and local ad valorem taxes and tolls special assessments while the land bank owns it, though federal tax liens (IRS) are not erased. He said the land bank cannot itself levy taxes and that it must publish an annual budget and file an annual report. Glass cautioned the council that a land bank must maintain a public inventory of properties and manage and maintain property it owns to meet city code.

Glass also described the sale process for land bank properties: before selling, the land bank must publish notice for 30 days. He said the land bank may place restrictive covenants in sale contracts, record options allowing the land bank to repurchase a parcel for the original price if conditions are not met, or otherwise require that buyers put a property into the intended productive use.

Council members asked practical questions. Mike Warrington asked whether property taxes are erased when the land is transferred into a land bank; Glass said state ad valorem and local property taxes are erased on land bank ownership but federal tax liens remain. Warrington asked whether a land bank could have been used in past acquisitions (for example, property taken for a park or right-of-way); Glass said yes, in some cases placing a remnant in a land bank can stop ongoing tax and assessment accrual while the city plans future use.

Glass described examples from other Kansas cities, including a Mulvane downtown case in which a land bank acquired multiple dilapidated buildings, accepted the tax burden at acquisition, cleared back taxes through land bank ownership and then sold buildings under covenants that required renovation and productive use. He noted, however, that forming a land bank requires extra annual accounting, audits and meetings and that counties and appraisers sometimes need explanation about how tax exemptions apply.

Glass recommended a cautious next step: he suggested staff inventory city properties and other targeted parcels that might benefit from land bank placement and present a recommended startup funding amount and ordinance language for council consideration. "If you decide it is something you want to do, encourage staff to take a hard look at what properties they have that might benefit," Glass said.