This document provides a status report on the Land Reutilization Authority (LRA) through fiscal year 2012. It discusses common misperceptions about the LRA, provides background on the LRA and its operations, compares it to best practices of similar organizations, and makes recommendations. The LRA acts as land trustee for tax-foreclosed properties in St. Louis, maintains and sells properties to return them to productive use. It owns over 10,000 parcels and has sold over 4,000 since 2000 while continuing to receive new properties.
1. LRA
Land Reutilization Authority
Real Estate Department
Status Report
Through Fiscal 2012
St. Louis Development Corporation
1520 Market, Suite 2000
St. Louis, Missouri 63103
(314) 657-3700, ext. 3721
www.stlouis-mo.gov/sldc/real-estate
Francis G. Slay
Mayor, City of St. Louis
2. Topics To Be Covered
• Perceptions/misperceptions about LRA
• LRA background
• Current operations and facts
• Best practices of similar land bank type
organizations
• Recommendations
3. Perceptions/Misperceptions
About LRA
• It is difficult to buy LRA property.
• LRA does not want to sell its property.
• LRA is too expensive.
• LRA sells properties for $1.
• Aldermen have too much control.
• LRA does not maintain its property.
• Every vacant/abandoned building in the City is an LRA
building.
• LRA commission rejects most purchase offers, thwarts
development.
• LRA picks winners and losers.
• LRA should sell to anyone who makes an offer.
4. Land Reutilization Authority
• The Land Reutilization Authority (LRA) is a
public agency created by State statute in 1971 to
address problems caused by large-scale
abandonment of privately-owned properties.
• LRA acts as the land trustee for tax-foreclosed
properties in the City of St. Louis.
• A three-member Board of Commissioners meets
monthly to act on offers that have been
submitted.
• The Mayor, the Comptroller, and the Board of
Education each appoint one Commissioner
(§92.200 RSMo).
5. Land Reutilization Authority
• LRA’s mission is to “return land which is in
a non-revenue generating, non-tax
producing status to effective utilization in
order to provide housing, new industry,
and jobs for the citizens as well as new tax
revenue for the City” (§92.875 RSMo).
6. Real Estate Department
LRA
Administrative
Staff (9)
LCRA PIEA
Maintenance
Staff (7)
Demolition
Specialist (1)
SLDC
7. Land Reutilization Authority
SLDC Real Estate Department performs the
following functions:
– Sales
– Documentation
– Maintenance
– Marketing
– Demolition
– Site preparation
– Acquisition
8. LRA Property Reuse Decision Tree
LRA receives property:
• Tax foreclosure
• Donation
• Purchase
Demolish Building
Preserve
Sell as-is Building
Rehab & sell (CDA)
Board & secure
Sell vacant
lot for infill
or side lot
Short-term green use
•Garden
•Adopt-a-lot
Long-term green use
•MSD runoff reductions
•Pocket parks
•Permanent gardens
Time
Horizon
Longer Shorter
Sell vacant
lot for infill
or side lot
9. How LRA receives property
• Tax Foreclosure Sales
– Usually 4-5 per year.
– To date, 80% of LRA parcels were received
from tax foreclosure sales.
• Donations
– Owners/family abandon property.
– Owners cannot continue to maintain.
– Banks donate foreclosed properties.
– Mayor’s Problem Property Initiative.
• Acquisitions
10. Commission Considerations
when Selling a Property
• Ensure sale is consistent with City’s
Strategic Land Use Plan
• Ensure offeror has plans, budget, &
financing to complete the project
• Coordinate with Alderman & neighborhood
groups to ensure sale does not negatively
impact plans for ward or neighborhood
• Take advantage of the number of parcels
we own in an area to assemble large tracts
to attract businesses/industries which create
jobs and increase tax revenue
11. LRA Parcel Inventory
• Inventory on 1/1/2000: 9,358 parcels
• Parcels received over 11 years: 5,640
• Parcels sold over 11 years: 4,193
• Inventory on 4/30/11: 10,625 (includes 266 LCRA/PIEA)
– Vacant lots: 8,775
– Improvements (billboards, etc.): 100
– Buildings: 1,750
• In the City, there are approximately 6,000 abandoned buildings.
• Agency-owned parcels account for 1,369 acres, or 4.5%
of the City’s parcel acreage.
• LRA is owner of last resort.
• LRA has never received purchase offers on 46% of its
inventory.
12. LRA Properties
& Housing Conservation
Program Areas
• Conservation Districts started in
1985 and expanded in most
Southside Wards in the late 80s &
early 90s.
• Most Northside Wards added in
late 2000s
• 3,143 LRA owned properties are
not in Housing Conservation
Areas.
• Wards 1 & 5 not in Conservation
Program
– Most of Ward 18
– About 2/3 of Ward 19
– Less than 1/2 of Ward 6
– A very small part of Ward 4
• Lack of inspections and code
enforcement in non-Conservation
Areas contributed to deterioration
of housing stock
13. LRA Parcel Status
Available for sale
Offer
Accepted offer
Option
Garden lease
Lease
Unavailable*
8,802
46
104
782
296
30
560
Total: 10,620
* LCRA/PIEA 266 - 72 billboards, 2 cemeteries, McKinley Bridge,
Hall Street landfill, Cass Bank building & parking lot, St. Louis Enterprise Center &
Center for Emerging Technologies (small business incubators).
15. Example Agency Ownership by City Block
No Agency Properties
Up to 30% Agency Properties
31-60% Agency Properties
61-99% Agency Properties
100% Agency Properties
4,062 blocks
1,415 blocks
298 blocks
59 blocks
8 blocks
There are 5,842 blocks in the City of St.
Louis, and the Agencies (LRA, LCRA,
PIEA) own property on 1,780 blocks, or
on 30% of blocks. The Agencies only
own 1 or 2 parcels on 765 of those
blocks.
18. Maintenance
• Maintenance Crew
– Staff of seven
– Receive approximately 300 calls monthly from citizens,
Aldermen, Neighborhood Stabilization Officers, Building &
Health Inspectors, and police.
– Tasks include:
• Board-up agency-owned buildings
• Minor repairs to buildings
• Remove and trim trees
• Cut grass and weeds
• Respond to citizens and elected officials
• Assistance from City
– Forestry Department
– Building Division
19. Demolitions
• Demolitions
– Structure rating
– Priorities
• Public Safety
– Those buildings posing an eminent threat to adjacent
occupied property
• Buildings in areas of planned/proposed
development
• Public/aldermanic requests
20. LRA Demolitions by Fiscal
Year 5/2/2011
Fiscal Year
Buildings
Demolished
Total Cost of
Demolition
Average Cost per
Building Funding Source
2012 67 $566,700.00 $8,458.20 Use Tax/MSD
2011 204 $ 1,417,312.00 $ 6,947..29 MSD
2010 142 $ 989,203.00 $ 6,966.22 Use Tax
2009 232 $ 1,998,595.00 $ 8,614.63 Use Tax, LDF, SLDC
2008 239 $ 1,988,119.75 $ 8,318.49 Use Tax, LDF, SLDC
2007 307 $ 2,296,154.00 $ 7,479.33
Use Tax, LDF,
CDBG
2006 224 $ 1,735,527.00 $ 7,747.89 Use Tax
2005 276 $ 2,323,742.00 $ 8,419.36 Use Tax, Bond Issue
2004 180 $ 1,450,051.00 $ 8,055.84
Use Tax, Bond
Issue, Fed Grant
2003 193 $ 1,356,129.77 $ 7,026.58
Bond Issue, Fed
Grant, CDBG
2002 239 $ 2,310,256.00 $ 9,666.34 Bond Issue
2001 127 $ 1,021,841.00 $ 8,045.99 Bond Issue
2000 137 $ 1,075,045.00 $ 7,847.04
Bond Issue, CDBG,
Bldg Div
Totals 2,567 $20,528,657.52 $7,997.13
Notes: (1) Avg cost of demo per bldg vary due to size of structures demolished & market.
(2) Land Development Fund (LDC) – a MO State Tax credit to support dev on North Riverfront
21. Sales Policy
Standard value price (SV) is based on assessor evaluations for
neighborhoods & is modified by staff using its expertise.
• Properties with buildings - $1,000/unit
• Vacant ground
– Residential new construction
• Price per front foot = 125’ x (1/2)(SV)
– Side lot
• Price per front foot = 125’ x (3/8)(SV)
• Commercial & riverfront property
– Appraised value
• Garden leases
– $1.00/year, up to 5 years
– Lease may be cancelled with 30-day notice.
22. Marketing Properties
– City website
– Featured properties
– Metropolitan Board of Realtors
– Neighborhood organizations
– Multiple Listing Service (MLS)
23. Developments Facilitated by
Community Development Agency
(CDA)
Since 2001, CDA has spent over $19.2M in Community
Development Block Grant (CDBG) funds on property
acquisition and rehabilitation for 214 projects which are
now complete. These projects provided 580 residential
units and green space, commercial uses, parking lots, &
community gardens.
Currently, CDA has $3.5M in CDBG funds invested in 20
projects which are underway and will result in 128
residential units.
All of these projects were built on parcels which LRA
acquired on behalf of CDA.
32. Significant Projects using
LRA Parcels
• Gate District
• Cardinal Ritter College
Prep
• Harrison Education
Center (St. Louis
Community College)
• Habitat for Humanity
• Vashon High School
• West End Housing
• Gaslight Square
• MLK Plaza
• City Hospital
• CB 6132, Ward 22
(Horse Shoe)
33. Best Practices: Holding All
Building Owners Accountable
1. Pursue vigilant, proactive enforcement of all property
maintenance codes.
2. Require property owners to register.
3. Impose fines & criminal penalties for repeat property
maintenance code offenders.
4. Obligate purchasers of distressed property to rapidly
bring property up to code.
5. Enforce & enhance nuisance abatement laws.
6. Coordinate with prosecutors, municipal attorneys,
and judges to aggressively enforce relevant State &
City codes.
34. Best Practices: Holding Vacant
Property Owners Accountable
1. Require owner to set & keep a timeline for rehab & reoccupation of a
vacant property.
2. Charge vacant property fees to finance associated City tasks.
3. Require vacant property owners to register with City and obtain a local
registered agent.
4. Require buyers to guarantee vacant buildings will be brought up to
code & occupied as a condition of purchase.
5. Require vacant property owners to maintain liability insurance.
6. Establish or use a housing court to hold unresponsive absentee
owners accountable.
7. Authorize a receiver to rehab or demolish a property.
8. Hold lenders responsible for maintenance and sale to a responsible
owner.
9. Raise vacant property owners’ property tax.
10.Make ownership information available to neighbors.
35. Best Practices: Holding Rental
Property Owners Accountable
1. Establish rental registry or rental license requirement.
2. Adopt a rental housing inspection ordinance to require inspection at
the time of sale or change of tenant.
3. Partner with Housing Authority to ensure Section 8 rental property
owners keep their property in good repair.
4. Offer tax abatements for property investment in distressed
neighborhoods.
5. Adopt a Smart Rehab Code to bring down costs of renovation.
37. Suggested Changes from
Respondents
• Waive additional option fees if extensions are
needed for issues outside of developers control
• Reduce the need for aldermanic approval/input-
No longer waiting for aldermanic approval for side
lots, irregular parcels and single family buildings
that will be rehabbed and occupied.
• Side lot and vacant ground prices too high
Reevaluated and reduced sq. ft. price in
neighborhoods with declining property values,
reduced side lot price to 3/8 of standard price,
increased front foot “buildable lot” restriction from
25 feet to 35 feet and more.
38. Suggested Changes from
Respondents
• Remove reversionary clause when closing
includes bank financing and/or equity investment
Subordinate reversionary clause to Lenders
• Market more valuable properties with realtors
Developing lists of realtors to market, list and sell
LRA properties
• Compensate brokers
Will pay minimum commission required by most
office brokers
39. Recommendations
• Stop competing with private developers for tax sale properties – No CDA
purchases have been made since 2011
• Review & adjust sales prices downward - ongoing
• Better market properties & processes – Developing list of realtors to list,
market and sell LRA properties
• Improve quality & quantity on webpage – new site allows buyers to find
properties by neighborhood, square footage, usage etc. instead of ward only
• Make all application forms available and interactive on webpage
pending.
• Periodically survey LRA clients - ongoing
• Create guidelines or seek ordinance to allow irregular lots to be annexed by
adjacent property owner.
• Find ways to incentivize realtors to market & sell LRA property – agree to
minimum commission requirement
• Work with churches, non profits and citizens groups to adopt LRA parcels in
their neighborhoods – sending LRA lists to alderman, CDA housing analysts
and neighborhood organizations
40. Recommendations
continued…
• Seek aldermanic input only on:
– Sales of parcels for large scale projects
– Any sale for the purpose of opening a business
• Aldermanic input will not be sought on:
– Sale of side lots and irregular lots
– Sale of vacant single lots
– Garden leases
– Sale of single family buildings that are to be rehabbed and occupied
Aldermen will still be notified of pending offers, but approvals will not
be deferred for more than a month
41. Recommendations
• Articulate a clear vision of the City’s future that includes a strong role
for land & building reuse & reconfiguration.
• Engage City residents in the process of thinking through vacant
property reuse & land reconfiguration strategies, being up front about
the challenges ahead.
• Avoid “quick fix” transactions which offer little long-term benefit, &
focus instead on systemic change for long-term transformation.
• Partner with CDCs, community organizations, churches, & others to
leverage limited public sector resources.
• Work with developers & non-profits to develop LRA & other abandoned
properties in ways that advance neighborhood stabilization &
revitalization efforts.
• Ensure foreclosed properties are maintained during foreclosure &
conveyed to responsible owners.
• Work with lenders to create or legislate programs to ensure adequate
mortgage capital is available to support credit-worthy home buyers &
sound economic development projects.
42. LRA Action Plan to Reduce
Inventory
• Sale of properties to Northside
Regeneration LLC.
• Sell all irregular lots.
• Push for sale of side lots.
• Sell all LCRA/PIEA lots held
for development.
• Transfer to City, Metro, or
MODOT all property in ROW.
Potential
Reduction in #
of Parcels
594
520
266
50
Total: 2688