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VOL. 131 | NO. 17 | Monday, January 25, 2016

Blight Authority of Memphis Convenes to Tackle Problem Properties

By Madeline Faber

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“This is historic,” attorney Steve Barlow said at the inaugural meeting of the Blight Authority of Memphis, held Thursday, Jan. 21, at the Downtown Memphis Commission’s office.

With funds from the Tennessee Housing and Development Agency, the newly-established nonprofit Blight Authority of Memphis plans to purchase, demolish and clean up blighted properties across the city. 

(Daily News/Lance Murphey File)

The nonprofit was established in late 2015 as a property land bank for the city of Memphis with positions appointed by the Memphis City Council and the mayor.

Barlow, with blight-fighting law firm Brewer & Barlow PLC, isn’t on the board but has long campaigned for a land bank, separate from the Shelby County Land Bank, that could move more nimbly and gain access to larger grants only available to nonprofits.

After naming Rick Neal as president/chair, Roshun Austin as co-chair, Ellen Vergos as secretary and Kathy Cowan as treasurer, the board’s first order of business was moving to apply for a pool of $7 million in funds operated by the Tennessee Housing and Development Agency and designated to demolish blighted single family residences across Tennessee. The board also elected Sheila Jordan Cunningham, an attorney with Brewer & Barlow, as executive director.

No other Memphis group has the capacity or intent to apply for the THDA funds on a significant scale, Cunningham said.

Barlow’s nonprofit Neighborhood Preservation Inc. also can apply for the funds. NPI has worked to drum up community support for the land bank and will contribute start-up funds and ongoing support.

To gain access to the THDA money, each nonprofit will be able to hold up to 10 properties at one time. THDA starting accepting applications in November, and the deadline to apply is 2017.

THDA will supply forgivable loans of up to $25,000 to purchase a blighted property and a $1,000 stipend for property management.

BAM would raze the property and green it. After THDA inspects and certifies the property, BAM maintains it for three years unless the property is developed for low-income housing. After that, the federal government releases any liens on the property, cancels the loan and BAM owns the property debt-free.

In 2014, the state of Tennessee authorized municipalities to establish their own local land banks. Memphis is the third to do so following the Chattanooga Land Bank Authority and the Oak Ridge Land Bank.

Cunningham described the existing Shelby County Land Bank as a “savings” bank and BAM as an “investment” bank. While BAM is a standalone entity responsible to local government, the Shelby County Land Bank is a department of local government and because of that, bears some limitations on what it can accomplish.

The Shelby County Land Bank absorbs foreclosed property and can sell it for a minimal amount to buyers who won’t necessarily develop it. These new buyers will often allow the built-up property taxes to become delinquent and thus repeat the cycle.

BAM, on the other hand, will only sell land to pre-approved buyers who are obligated to follow a development plan, improve and maintain the property and pay taxes on the property.

BAM can also assemble parcels for a larger development approach and can bring bulk action to quiet title in order cut through several different claims to ownership that keep the property from being cleaned up.

“BAM will have the opportunity to have a lot of property,” Cunningham said. “Different plaintiffs come to Environmental Court and they want to give Steve their property when they’ve just been cited for code violations because they don’t want to own it. They can’t take care of it. BAM will be able to take all of that property.”

At next month’s meeting, BAM will determine its overall strategy for obtaining and developing blighted properties.

“There’s a lot that needs to be addressed,” said Neal. “Do you take on the worst thing and try to address it or do you take the low-hanging fruit and try to move it forward quickly?”

PROPERTY SALES 51 334 9,936
MORTGAGES 41 330 10,946
BUILDING PERMITS 348 1,216 22,173
BANKRUPTCIES 43 348 6,311