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VOL. 9 | NO. 13 | Saturday, March 26, 2016

Cleaning House

City gains the tools, personnel to mount unprecedented attack on blight

By Madeline Faber

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Every neighborhood in Memphis and Shelby County has the right to be free from the negative effects of vacant, abandoned and blighted properties. That’s the battle cry of the Memphis Blight Elimination Charter, a 23-page pledge that will steer policy and programs dedicated to blight eradication.

At the charter’s unveiling on March 17, 150 development and civic leaders joined to usher in the next chapter of Memphis’ fight against blight.

At the event, Shelby County Trustee David Lenoir called blight a cancer in the community, saying one blighted building is capable of dragging down the value of a neighboring property by 10 percent.

Paul Young, new director of Memphis’ Division of Housing and Community Development, blight-fighting attorney Steve Barlow and Patrick Dandridge, new director of the city Department of Neighborhood Improvement, are leading Memphis’ next chapter in the fight against neglected properties.

(Photos: Memphis News/Andrew J. Breig)

But an abandoned property doesn’t just damage tax rolls. Its consequences are unsafe living conditions, crime, environmental damage, repelled private investment and a pattern of neglect.

“Unfortunately, without some larger coordinating framework to guide and inform these actions, we end up doing a good job of treating the symptoms without addressing the deeper sources of the illness,” added Shelby County Mayor Mark Luttrell.

Among those deeply embedded sources is a “blight culture” that has come to accept dilapidation as another part of Memphis’ landscape.

With the charter, Memphis leaders are striking that belief. Coordination, collaboration and accountability will be the best tools in uprooting blight and its causes.

Same Language

A document can’t repair the decades of economic decline, crime and poverty linked to Memphis’ blight epidemic, but it does unite the fragmented efforts of the past decade in bringing about policy and cultural changes.

“The charter is significant because it gives us a framework where we can speak the same language,” said Paul Young, who was appointed in January as director of the city of Memphis Division of Housing and Community Development.

Over the past year and a half, Young and more than 30 other leaders worked with national blight abatement experts to design the charter. In the process, individuals from Memphis’ top civic and development groups broke down silos and set the framework for a course of action.

Within the next six weeks, several members of the steering committee will reconvene as an action committee. The first agenda item will be coming up with short- and long-term strategies to breathe life into the document.

The charter’s formation is spearheaded by Neighborhood Preservation Inc., a blight-fighting nonprofit led by attorney Steve Barlow and developer Archie Willis.

Barlow, a principal with Brewer & Barlow PLC, has labored in bringing Memphis’ blight problem to light for the better part of two decades. He believes the charter is one of the best tools Memphis has, especially because it builds on the game-changing efforts of four key assets: The Shelby County Environmental Court, a dedicated court for dealing with problem properties; new leadership and direction for Memphis code enforcement; the recent formation of a nonprofit city land bank; and the litter-control efforts of groups such as Memphis City Beautiful and Clean Memphis. He added that the Bluff City Snapshot, the first parcel-by-parcel database of the city’s 243,000 properties, provides the foundation for tracking blight elimination efforts.

“Most cities wish they had just one of those,” Barlow said.

All of those groups, and several more, are finally working at the same table to combine and strengthen their efforts.

While other cities have blight elimination plans and frameworks, Memphis is the only city with a charter that affirms cross-sector commitment to uproot the causes of blight and prevent further decline.

“What we see this as is a north star or a guiding light for all the blight tactics in these previously siloed organizations,” said Brandon Gaitor, an attorney with Brewer & Barlow who helped manage the charter’s formation. “Out of this compact will form a council or team that will stay on top of this issue and see where we are in blight in Memphis from a very strategic, non-duplicative, non-undermining way.”

New Legislation

With nearly 13,000 identified blighted properties across Memphis, key leaders say the effort to rid Memphis of blight needs to be backed by stronger anti-neglect legislation.

In January, two key tools fell into place.

The first was the formation of the Blight Authority of Memphis. The nonprofit land bank is able to move more nimbly than the Shelby County Land Bank and gain access to large grants only available to nonprofits.

BAM was formed primarily to gain access to a pool of $7 million in funds operated by the Tennessee Housing and Development Agency.


Unfortunately, without some larger coordinating framework to guide and inform these actions, we end up doing a good job of treating the symptoms without addressing the deeper sources of the illness.”

Mark Luttrell, Shelby County mayor

THDA will give nonprofits up to $25,000 in forgivable loans along with a $1,000 stipend to purchase and demolish blighted single-family homes. After BAM holds the property for three years, THDA cancels the loan and all outstanding liens, leaving it to the new owner debt-free.

No other Memphis group has the capacity or intent to apply for the THDA funds on a significant scale, according to Sheila Jordan Cunningham, BAM’s executive director and another attorney with Brewer & Barlow.

The new, standalone land bank also will allow blight-fighters to develop neglected property on a tax-free basis.

This is completely new territory compared to what the Shelby County Land Bank can achieve. BAM will be able to assemble parcels for larger development, clear up titles and have the authority to only sell parcels to pre-approved buyers with a set development plan. The Shelby County Land Bank, meanwhile, absorbs properties out of foreclosure and then sells them to anyone for a minimum amount.

By the time the THDA funds expire, BAM could make a significant dent in de-populating Memphis’ problem properties.

The second tool to fall into place is a Tennessee law that reduces the redemption period after a tax sale. In the past, it would take a year for a foreclosed property to leave the hands of a neglectful owner.

At the end of that year, the previous owner could step forward and petition to regain ownership of the property, yet still leave it in the same condition, thus repeating the cycle.

The new legislation tightens up that period so properties can be razed or redeveloped sooner.

If a property has been tax-delinquent for five to seven years, the redemption period is reduced to 180 days. If it’s been delinquent for eight or more years, the period is 90 days.

If a property is both vacant and abandoned, there’s only a month before the property is moved to the Shelby County Land Bank or another court-appointed receiver.

This year, Memphis advocates are working on another bill that would allow the tax foreclosure process to begin after one year of delinquency, instead of two, according to Barlow.

“We’re focused on properties that are abandoned because there can be a lot more deterioration in three to five years of no maintenance than 15 months,” he said.

Young worked on the redemption period bill in his previous position as director of legislative affairs for Shelby County government, before being appointed director of Memphis’ Division of Housing and Community Development.

“The hope is that we will have fewer properties going into the Shelby County Land Bank and more going into the hands of private owners that will do something with them,” he said. “When an investor hears they have to wait an entire year before making any movement on the property, that reduces the desire to purchase it or take action.”

Barlow added that all of the byzantine tax laws and regulations make local government its own worst enemy when it comes to blight remediation. He and others in the planning community will continue to advocate for the establishment of “pink zones,” or high-priority areas where bureaucratic red tape is lessened to ease redevelopment.

New Leaders

The charter is the cap on a handful of new personnel and policy changes.

Barlow said that new leadership will mobilize Memphis’ next chapter in blight fighting with coordination between city and county governments at a higher level than he’s ever seen before.

And these changes fall under the new administration, with Mayor Jim Strickland making blight elimination one of his top priorities.

“These people deserve to live in a clean, safe neighborhood,” Strickland said at the document’s unveiling. “And we are 100 percent committed to the charter.”

At the unveiling of the Blight Elimination Charter, Mayor Jim Strickland affirmed his support of attorney Steve Barlow’s efforts in mobilizing the public and private sectors.

Young, in his new position, wants to focus more on community-level support and less on the large private-public developments that defined his predecessor Robert Lipscomb’s tenure.

When Young took over the department in January, he also inherited the years-long effort to redevelop Foote Homes, Memphis’ last public housing complex.

The South Memphis site will showcase Young’s proposed brand of blight fighting, which includes leveraging public dollars to entice private developers to come into disinvested areas.

This isn’t necessarily a departure from the big-project strategy that defined Lipscomb’s tenure, but Young intends to better align that work with existing efforts in code enforcement and environmental court.

At least $160 million in public funds, tax credits and private debt is going toward demolishing Foote Homes and constructing 712 affordable and market-rate units.

Young said private developers need to step up to the challenge of bringing in necessary financing to enhance the surrounding areas.

“We’re hoping that through addressing some of the significant blight that exists with Foote Homes, we’re able to catalyze the rest of that development in South Memphis,” he said.

“It took us years to get to this point,” he added, pointing to Memphis’ longstanding issues with flight from the urban core, poverty and chronic disinvestment coupled with predatory lending practices that brought on the recent mortgage crisis and wave of foreclosed homes.

“It’s not the type of situation any taxpaying citizen should have to deal with, so we have to figure out ways to mobilize the private sector,” Young said.

Patrick Dandridge, a former senior City of Memphis attorney who was appointed deputy director of public works in January, wants his code enforcement department to take a proactive approach in identifying neighborhood decline.

“We are moving to a new age of code enforcement,” he said, adding that shift will come with a data-driven approach, greater accountability and community engagement.

Dandridge envisions code enforcement officers as more like postal workers who are embedded in the fabric of their district. Instead of responding to complaints, they scan the area and keep an open dialogue with the neighbors.

He said that Bluff City Snapshot, an effort that wrapped late last year, marks the first comprehensive survey of Shelby County’s 237,000 parcels. Armed with that data, Dandridge will identify priority zones and their progress. Moving forward, a complete parcel-by-parcel study will happen every two years.

He’s also prepping for the consolidation of Memphis Fire Department’s commercial anti-neglect services under the city of Memphis Department of Neighborhood Improvement, also known as code enforcement. The MFD deals with commercial properties and Neighborhood Improvement tackles the residential side.

When the commercial anti-neglect team makes its move in July, Dandridge expects enormous increases in efficiency.

In the wake of public outcry against Global Ministries Foundation, whose nonprofit housing portfolio lost its Department of Housing and Urban Development subsidies due to numerous code violations, Dandridge is working on ways to prevent full-scale apartment neglect.

Currently, his team responds to apartment communities complaint by complaint. Instead, he wants full-scale sweeps for apartments that have routine complaints. Negligent property owners would be added to a list and would have to pay for full-scale sweeps when they try to start a new venture.

Dandridge, who worked with code enforcement policies in his previous position as senior city attorney, said that stacking legal strategies will lead to an overall environment where blight is simply not tolerated.

“We know what the problem is,” he added. “Anyone can see there’s a problem. We need new tools to deal with it.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 56 437 16,061
MORTGAGES 76 508 18,556
FORECLOSURE NOTICES 8 56 2,461
BUILDING PERMITS 241 876 33,390
BANKRUPTCIES 64 301 10,314
BUSINESS LICENSES 15 125 5,303
UTILITY CONNECTIONS 17 125 6,273
MARRIAGE LICENSES 19 98 3,511