My Journal Entry in the Chronicles of "Trying to Fix the Vacant Land Problem"

I'd hoped to write here earlier about my work on all of this, the "land bank bill" introduced by Councilwoman Sanchez and the new vacant land policy being proposed by Mayor Nutter, and respond to some of the recent online discussion. No way it doesn't sound like an excuse, but I've been busy.

As most of you know, I work as a lawyer and legislative assistant in Maria Quinones Sanchez's office. There are a lot of ways I could spend my time in this job, and use my expensive education to try to help the city. But so far, since my focus is housing and vacant land, by far most of my time is spent navigating our land acquisition and disposition systems. That's helping, or failing to help, constituents get abandoned private land and publicly-owned land - elderly Puerto Rican couples who have been growing food across the street from their house for 20 years; nonprofits looking for more secure space; churches trying to stabilize their blocks; urban farmers; artists creating galleries; activists desperate to keep drug dealing and all the associate violence from metastasizing in empty buildings and lots. Nothing moves, or nothing moves without a truly epic amount of unnecessary work. It's Sisphysian. It's endless. It's wasting my time and my tax-funded salary. (For the record, it's not that big of a salary.)

Yesterday our great architecture columnist Inga Saffron meditated on Twitter that the problem moving that vacant land out of public inventory is "politics." (And, mostly mystifyingly, that "city policies and politics encourage owners to use vacant lots for parking, billboards & other unproductive uses.") This is seeing the symptoms and misdiagnosing the disease.

As far as I see, glaring problem number 1 is our lack of modern and coherent computerized infrastructure to manage vacant land. Glaring problem number 2 is current policies for acquisition, disposition, and pricing that do not match the needs or market conditions of most neighborhoods in the city. Both of those keep land stuck for years, often decades. Our Council office tries to help these stuck wheels move for our constituents and developers, but sometimes we are an obstruction. That's because glaring problem number 3 is lack of affirmative land use planning that would give us some metrics to agree what uses should go where. For a given proposed transaction, we don't get meaningful information about who the applicant is, what they want to do, whether they can actually do it, and then we have figure out whether we think what they want to do makes any sense, because we get no meaningful planning or policy guidance as to whether, say, selling a residentially-zoned lot to someone who lives a block away for parking is a good idea. Which is all not to defend or condemn "councilmanic privilege." But that practice exists now in the vacuum created by a dysfunctional system, and in part fills its gaps. If we get to a future system that is computerized, more transparent, and has written policies, the Council role in land disposition - whatever it ends up being - is going to function a lot differently.

Which brings me back to my first link, Patrick Kerkstra's article from this week about where we are with all this. If and when the city launches its "front door" to coordinate land sales, several big steps will have been taken. The Redevelopment Authority commissioned and is implementing a new database system that will contain files that are now inaccessible, and allow oversight and tracking of application status. That door will be at least cracked for more accurate pricing methods, appeal of absurd appraisals, and reduced or nominal price for a greater range of uses - uses the city already subsidizes one way or another and tries to encourage left and right in neighborhoods that have, as Dan pointed out in that Twitter conversation, negative land value.

But we'll still need a land bank, which is just a way of saying 'a more efficient vehicle for handling vacant land.' Otherwise there are still different agencies, different incentives and motivations, fragmented title, duplication and overlap, and time and money lost internally coordinating all of that. We've had massive cuts of the federal and state dollars that we've been using to run our current housing and land agencies and programs, and the cuts are continuing to come. We can't afford to leave the existing "alphabet soup" in place. We need to look top to bottom, probably with outside help from a foundation or university, and think about how we need to restructure that system to avoid duplication and get the most out of those shrinking resources.

The land bank bill, as introduced, is not meant to create a new and separate entity. It starts with the premise that whatever agency manages acquisition and disposition of surplus vacant land should have that as its mission and specialized focus (and the Public Property Department should be free to concentrate on managing active public facilities, and not need to play real estate agent). It also acknowledges that the Redevelopment Authority (PRA) must exist in some measure, because only it has legal power from the state to condemn blighted land for redevelopment. The land bank would exist in relationship to the PRA (either the PRA as an arm of the land bank, or vice versa) - one staff, one office space, but distinct rules and governance structures based on existing legal requirements and what fits the city's needs.

Some of the improvements mandated by the bill: a computerized, accessible inventory of public and privately owned vacant land; a system for getting ongoing notice of the status of vacant parcels; a strong role for community plans and the coming Comprehensive Plan; written policies that are updated biannually through a public process (a huge change!); requirement for ethics and conflict of interest policies, developed in the same public way; annual reporting.

But there's still a lot to figure out, including the best way to structure and improve Council's role in the process. Cleveland has a sign-off sheet, where all agencies, including the legislature, okay each transaction. We could have hearings, which have the advantage of being public but the disadvantage of taking time and resources. There's no magic answer, but the land bank is essentially a blank canvas to structure a system that actually makes sense, and the discussion is still active and open as to what that should look like - please continue to comment and give feedback, and please advocate loud and hard for change. The day I can permanently delete my Excel spreadsheets tracking hundreds of uncompleted property transfers seriously can not come soon enough.

Idealism and reality have to find a common ground

The most massive and glaring absence in the listserv version of the bill introduced is the lack of any ethical provisos requiring counterparties to be given a "clean bill of health" before they are permitted to complete a transaction with the Land Bank.

I will give you a concrete example. Emmanuel Freeman, the man who destroyed and bankrupted Germantown Settlement, was given truckloads of cash by the City with very little accountability and not much to show for the millions he was distributed. Had the City given him land instead, he would be tempted just like many other private landholders are and he would have played the property squatting game in Germantown along with others already doing this as private owners. Luckily, Mr. Freeman's reign over Germantown was brought to a quick end when Alan Butkovitz stopped signing his checks. Bankruptcy quickly followed to the relief of many Germantown residents. Many of his own neighborhood residents who lived within Germantown Settlement's activity area accused him of being a blight-preserver, not a blight-fighter.

Years ago, the Spring Garden Civic Association was a one-woman show who was using subsidized dollars to property squat and build a portfolio for herself. No controls, no checks and balances, no verification that the civic purchase of property was being done for the public good. That's what one of the stated goals of the land bank is, right? To consolidate public property so that it can be recirculated back to the neighborhood for the betterment of the community? That doesn't pan out when the RCO getting the funding and acquiring the property is an ethically-questionable organization.

I simply do not trust any particular Councilmember to do the due-diligence it takes to vet buyers of City-owned property. If you land-bank away property and do not have the ethical safeguards before disbursement, you'll be cementing a blight problem if you only transact property based on friendships, and not facts. The way the Land Bank is being set-up, who you know is way more important than what you've accomplished.

These are some basic things the Land Bank should be mandated to do in law:

- Obtain all the identifying information for all transactor/counterparties engaged in a Land Bank transaction. That includes the full legal names of the principals/officers involved in the transactions, their corporate business registered address. This should be made public prior to the transaction being completed.

- Cross reference each counterparty doing business with the land bank on a regular basis with: Court of Common Pleas, Civil Trial Division and Philadelphia Municipal Court concerning any City suit involving the principal agents of the counterparty involving any other property either currently or formerly owned in Philadelphia by the counterparty. If cases are found, the land bank must review the cases. Are they L&I Code Enforcement complaints? If so, were all those complaints settled and paid? Are any still outstanding? If the answers are YES, NO and YES, the entity should be blocked from doing business with the Land Bank.

- Lastly, all principal agents in the counterparty must have their Real Estate Taxes pulled for any and all property they own or control or have previously controlled recently for outstanding liens. No one should be permitted to transact business with the Land Bank and at the same time have any outstanding Revenue Department Lien against them.

Seriously. If a Robert Coyle protégé decided to do business with the Land Bank, he can quickly win over community groups and influence through their affinities, who will then support him in front of the District Councilmember when it comes time to acquire the property. The City will look the other way and hand the title over to him.

Then once he holds the deed, we are all screwed if the new owner renegs on his promises, and the City will continue to not act even though it was the enabler.

Why are we creating a Land Bank where it will be all-about "who you know", rather than your merit, to do business with the bank? I don't need to have in-roads with a manager to get a mortgage. The bank frisked me down short of an anal-probe when I obtained my mortgage and purchased my Philadelphia rowhome. This Land Bank will operate nothing like that. To build my dream home on a City-owned lot, I'll have to make sure my contact information is in Councilman Squilla's Rolodex before I do anything else.

Importance of vetting and conflict of interest protections

On those points, you'll get nothing but agreement from me. Which is why we put a lot of them in the bill. But the bill is just a framework. By mandating the development - and continual updating - of those ethics and conflict of interest policies through a public, recorded process, suggestions like many of yours can and should be proposed, discussed, adapted, and included in the land bank's eventual operating policies. You're totally right that implementation of conflict of interest policies need to involve cross-referencing related companies and agents of the applicant - we've seen this issue, and the dodging of it, recently with the sheriff's office.

And while there are real issues that will need continued discussion and debate, you can't continue to mischaracterize what's actually in the bill - much of which was directly drafted with the goal of preventing another Robert Coyle/Landvest mess in mind.

Here are some relevant provisions from the bill, in addition to which there are mandates for extensive new public notice and reporting requirements, meant to increase transparency and allow the most effective checks and balances - public and media oversight, review, and comment:

16-508(2)(a)-(b): requiring full board review at a public meeting, with opportunity for testimony, if transactions depart from written policy or involve an applicant with a history of tax/water delinquency or code violation.

16-508(5): requiring a certificate of tax/water compliance from Revenue, and of code compliance from L&I for all applicants.

16-508(7): requiring that the land bank use legally-binding mechanisms to enforce conditions of transfer, which allow reversal of a transaction if the transferee does not live up to obligations or code.

I hope those edits

I hope those edits do make it into the final language. I would certainly hope that any citizen submitting written proof of non-compliance would warrant a heightened since of urgency by the Land Bank to re-vet an applicant.

I am "Oh Ye Of Little Faith". The City of Philadelphia blew 300+ chances to take down Mr. Robert Coyle. None of his City-launched suits were aggressively pursued. He dodged the process server and Muni Court tossed out all the ones he dodged. He's left a giant scar across 3 neighborhoods that the land bank won't be able to fix (not unless the RDA starts condemning the LandVest, Alivest and Ralcram properties and finds someone willing to rehab all those houses en-masse).

Your edits I see here do not spread out to other associated parcels within Philadelphia County. That would be important since the applicant does not yet hold/control the property he would be interested in, and theoretically would be compliant by default, even though he's massively in default elsewhere, which would be how a Philadelphia lawyer would interpret that.

To put it in layman's language. These people are pretty damn sneaky. If I need to look good, I can form a shell LLC in a hurry so that it looks lean when your average citizen does simple public records checks. You have to practically know how to do everything a Title Search company does to really get a clear picture of how someone handles their real estate holdings in Philadelphia.

For instance, the City may or may not know this, but in the collar counties---I seem to find the highest aggregate number of slumlords outside the city limits living in Huntingdon Valley. I've yet to drive up there and hang out up there, but I wish one of the alt-weeklies would look into the culture of so many sleazy people who do shady business in Philly by day but lay their head on a pillow in Huntingdon Valley by night. It's quite odd.

Those are not edits!

It's all in the bill's text as introduced, hence my saying you are misrepresenting it.

Not sure what you mean about associated parcels - the text applies to the applicant and all property he owns or has owned. I agree that in implementation, that should include in some way shell companies/related parties - if the language isn't broad enough to encompass that, we should certainly broaden it.

Oh, be sure to look for people hiding their identities

As an activist who burns the midnight oil digging through public court records establishing cases that slumlords are, indeed slumlords and exposing this information to civics who have say over zoning, one common thing the Land Bank must do is publicize chains-of-ownership. If LLC A is owned by LLC B, and Corporate D owns LLC B and Corporate C, the Land Bank must collect and publish all of that information in the public record. That transparency is a must.

All too often, the City is lost in a quagmire of public chains of ownership disguised to hide the identity of bad actors. I can see it now: I have 200 Code Enforcement Complaints (don't laugh, some people have more than 300)... so I'll get my sister-in-law registered as the president of XYZ, LLC. and have her run interference for me because she's a neighborhood resident and she went to school with the people sitting at the local civic. She then gets a deal approved through the Land Bank because the Civic gave her the thumbs-up so the Councilmember doesn't veto. Nobody is diligent enough to check to see if I am connected to her at all. Boom... she gets the parcel, then she transfers it over to me after she gets the deed and I pay her a fee to hand it over.

Where's the provisos in the land bank bill to stop something like that from going down? Currently, it's not there in the bill.

I can't tell you how fun it is when I break these corporate veils and publicly expose real owners and their home addresses to neighborhood residents. They freak. Something tells me the Land Bank will not be going to this trouble and the City will invariably hand off property to a destructive counterparty, only to find itself in the spotlight of public shame and embarrassment when that happens.

I certainly would not want to be sitting on the board of the land bank when that does happen.

My dream

is to convince the Law Department to start bringing cases to 'pierce the corporate veil' of shell companies of slumlords/speculators, so that the law allowing for personal judgments for significant code violations can actually be put to meaningful use.

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