Rock Island land bank says Supreme Court ruling hampered transfers, proposes new fee and commission model

Miles Brainard, chair of the Illinois Quad Cities Land Bank Authority, gave the Rock Island City Council a brief update on the land bank’s work and finances, saying legal changes have “made a lot of counties very nervous to give properties over to land banks or to even collaborate with land banks.”

The land bank was formed in 2022 by the cities of Rock Island, Moline and East Moline after a feasibility study, Brainard said. He described the authority’s mission as acquiring vacant or blighted properties, clearing title issues and returning lots to responsible local owners so they return to the tax rolls.

Brainard told the council the U.S. Supreme Court’s unanimous 2023 decision in Tyler v. Hennepin County disrupted the tax-auction process land banks often relied on. “It basically has to do with the idea that if you take a property for failure to pay taxes and then you go on to sell it for a profit, you can create a surplus value that should have been owed to the previous owner of record,” he said, and the ruling has made counties hesitant to transfer properties to land banks.

Despite legal and operational challenges—including higher-than-expected insurance and auditing costs and staff funding constraints—Brainard highlighted recent local results: the land bank helped demolish five blighted houses in East Moline and is marketing the resulting vacant lots for sale.

On funding, Brainard said Rock Island’s current annual contribution is roughly $38,000 under the authority’s present formula (a $1 per-resident fee measured on the 2020 census). The land bank board is considering moving to a smaller, flat annual fee from each member community and shifting the land bank manager’s compensation toward commission on property sales, supplemented by expanded fee-for-service offerings to neighboring communities.

“We’re gonna continue to try to build capacity and network with partners in the community,” Brainard said, adding the board is also pursuing grant support to acquire properties. He told the council the land bank is working with a grant “from Ida” to acquire 10 properties in Rock Island and that the city attorney and he will brief council further on specific properties later that evening.

Council members asked about alternatives to waiting for state action and suggested local revenue options. One council member asked whether a local real-estate transfer fee had been discussed; Brainard said “that specific idea has been discussed by the board” but members believed they lacked support from their respective city councils.

What’s next: Brainard said the board will continue recruiting partners, pursue grants and return to council with details on the properties they hope to acquire and proposed changes to the member-fee structure.