Ohio Land Banks — Blight Removal and Vacant Properties (SB 353)

Summary

Testimony on land banks and blighted properties in Ohio. The testimony states that land banks were created by SB 353 in December of 2008 and have grown to 59 land banks today, and that they have helped demolish over 40,000 vacant and abandoned residential structures. It says land banks have been unable to deal with millions of square feet of vacant and abandoned commercial and industrial properties. It states that the Ohio land bank association asks, on behalf of members and Ohio communities, for a commitment of at least 200 million dollars, in flexible funding it would characterize as nuisance abatement funding that would include environmental clean-up dollars.

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Ohio Count Land Reutili ation Corporations, commonl referred to as count
land banks, have pla ed a critical role in the past eight ears in helping to eliminate
blight, re-purpose thousands of vacant properties, stabili e housing values and
restore lost propert ta revenue for Ohio communities. This tool, created b SB
353 in December of 2008, has gro n from one count land bank          Cu ahoga-to 59
land banks toda .
The ork of blight removal, as kicked off in Januar of 2012 b then Attorne
General Mike DeWine ho committed the majorit of the landmark Robo-
Signing settlement to Ohio communities for the removal of distressed properties.
The blight fighting effort received a second boost in federal assistance though the
repurposing of Hardest Hit Funds in June of 2013, and a second commitment in
Januar of 2016. These combined efforts raised appro imatel $400,000,000.
When added to commitments made at the local level in places like Cu ahoga and
Richland counties the total raised approaches $450 million dollars. These funds
have helped count land banks demolish over 40,000 vacant and abandoned
residential structures. It is undeniable that the foreclosure crisis of 2004-2009, and
the ensuing Great Recession pla ed a major role in causing much of this
abandonment--and destabili ing communities all over Ohio. Billions of dollars in
equit    ere lost b Ohio propert o ners hose subprime and predator mortgage
loans ent into default and foreclosure. An even greater traged       as e perienced
b adjacent and adjoining propert o ners in those same communities: the never
took out a bad mortgage, but suffered the same losses as a result of the
abandonment and blight caused in their neighborhood b these risk mortgages.
The graph on the follo ing page depicts the dramatic drop in propert values on
the East side of Cleveland during the foreclosure crisis.
Land banks focused initiall on these vacant and abandoned residential properties,
in part because the   ere easier to acquire, and in part because the dollars made
available b the state and the federal government limited demolition dollars to
residential properties. Unfortunatel , land banks have been unable--e cept on a
limited basis, and based on their o n resources-- to deal ith millions of square
feet of vacant and abandoned commercial and industrial properties.
Commercial and industrial properties in Ohio have been ceasing their operations
and facing abandonment for decades. From small machine shops to the
ubiquitous retail properties-- ith ground floor retail and apartments above, to the
giant industrial comple es in cities like Youngsto n, Cleveland, Da ton and
Toledo, properties have been abandoned b the thousands in Ohio communities.
The stand as a reminder of hat made Ohio great, but because so man have been
vacant for so long all the do no is remind these communities of their economic
decline. The have long since stopped pa ing propert ta es, but are a drag on
communit resources as the are often magnets for criminal activit , such as arson
fires and violent crimes. While man of these facilities (because of oning
requirements) are located outside of traditional neighborhoods, a significant
number, especiall old schools and old hospitals are located ithin residential
communities and pose a special risk to those adjoining neighborhoods. For man
of these properties there is no market-based re-use solution, no incentive for
private investment to save them. Quite simpl , man of these properties require
demolition. But the cost of these demolitions can run in the millions of dollars,
not just because of the si e of some of these structures but because of the
environmental issues these properties pose. (A notable e ample of this problem is
the Ne Boston Coke facilit , a former steel plant and coal tar distillation plant in
Portsmouth, Ohio hich closed over 20 ears ago. The 22-acre site is located
directl on the Ohio River. It is adjacent to the Portsmouth ater filtration plant.
It is an environmental nightmare and the cost of removing the building and
cleaning the site ma run up ards of 40 million dollars. Communit leaders have
struggled for ear to find a a to clean this site, but their pleas have been
ignored.)



It is orth noting that in spite of the substantial progress made on the removal of
blighted residential structures in Ohio, the problem is far from being resolved. A
stud done b the Western Reserve Land Conservanc in 2013 estimated that there
 ere over 100,000 vacant and abandoned residential structures in the state of
Ohio. A more recent stud in 2019, responded to b less than a third of Ohio
counties revealed that 25,891 residential units still a ait demolition. Based on
further contacts ith count land banks and local building departments, and
e panding the demolition need to the thousands of abandoned house trailers         this
number, hile reduced significantl , is still in e cess of 50,000 units. So the need
for blight removal dollars is still there. While there has been progress ith
residential units there has been virtuall none ith commercial and industrial
properties.



We estimate the number of abandoned commercial and industrial units/buildings in
the state of Ohio to be appro imatel 10,000 buildings. We believe the total square
footage of these buildings approaches 100,000,000 square feet. A recent surve b
Western Reserve Land Conservanc received responses from 29 of the land bank
counties      hich at that time totaled 56 counties. That surve obtained responses
from about one third of Ohio counties and revealed almost 4,500 abandoned
buildings ith appro imatel 40,000,000 square feet of space. The range from
the smaller commercial structures ith ground floor retail and one or t o floor of
apartments, to industrial comple es in e cess of 1,000,000 square feet. The cost
of demolishing these buildings, using an $8.00 per square foot demolition cost, (an
average based on hat the Cu ahoga Count land bank spends on demolition)
 ould be $800,000,000     but that is not the onl cost facing these communities. It
is actuall considerabl higher than that as man of these buildings have asbestos
issues. In addition, some are even more to ic than that as e cite in this paper ith
e amples like the Ne Boston Coke Plant in Warren, or the abandoned St. Joe s
hospital comple . Some of these e amples include:

   x The abandoned Wagner manufacturing site in S dne , Ohio. This comple
      has been abandoned since 2008, hen the last o ners of the compan ,
      Master Vision Polishing, alked a a from the propert . Estimates for
      demolition and remediation run bet een 2.2 and 2.5 million.
x The Baron Steel Manufacturing Plant in Toledo, Ohio. Built in 1904 and
   closed in 2003, this facilit is responsible for 250,000 square feet of
   abandoned industrial space.
x The Republic Rubber Factor in Youngsto n as ell as the RRI Tire
  Rec cling facilit in that cit . Both of these facilities have been abandoned
  for over 20 ears.



                            Republic Rubber
RRI T
x The abandoned St. Joe s Hospital in Warren, Ohio. This hospital as
   abandoned b its third o ner in 2010. It is 274,000 square feet and is a
   major blighting influence in the north est neighborhood of Warren. The
   cost to remediate and demolish this building, according to Warren cit
   officials, is estimated to be 4.5 million dollars.
x In Pomero , Ohio, a communit of 1,900 people in Meigs Count , there are
  t o abandoned hospitals   the old Veterans Administration Hospital
  closed in 2001, and the old Meigs General Hospital closed in 2003-both
  a aiting demolition.

                            General Hospital




                              VA Hospital
x In Buc rus Ohio, the Ponderosa Restaurant has been vacant for more than 20
    ears. As it is along a heavil -travelled state route, it provides an instant
   negative impression to area visitors.
x In Coalton, Ohio, a g mnasium from the long since demolished Coalton
  School as intended to be used as a recreation/communit center. Due to
  insufficient funding, the building as never repurposed and has since fallen
  into disrepair. Abandoned schools are a particular problem throughout Ohio
  as man of these are located ithin residential communities.
x In East Liverpool, Ohio, there are various abandoned commercial buildings
   in the center of to n. Buildings like these ground floor retail ith
   apartments above are the most common abandoned commercial properties in
   smaller Ohio communities.

     Dresden A enue                                        Webber Wa




     Dresden A enue                                       Ra ine Street
x Galion, Ohio, also contains man abandoned commercial buildings, along
    ith larger abandoned industrial buildings.
x In Mansfield, Ohio, there are a variet of ha ardous abandoned buildings
   including a school that has alread been the site of multiple fires, a junk ard
   containing radioactive materials, a bio- aste management facilit , and
   numerous small commercial buildings from no -defunct businesses.




                              Bio- aste facilit
  Abandoned school




Various other structures
x In Martinsville, Ohio, an abandoned auto repair shop has been offered to the
   count land bank. Ho ever, the land bank is reluctant to take it as the do
   not have sufficient funding for necessar environmental cleanup and
   demolition.
x Mingo Junction, Ohio contains a variet of abandoned commercial buildings
  in the center of to n.
x In Oak Hill, Ohio, a dilapidated former dair bar needs to be demolished
   before an adjoining propert o ner can take o nership.
x In Sandusk , Ohio, there is an abandoned 20,000-foot iner . The cit has
  been aggressive in removing man of its abandoned commercial structures,
  but is out of funding for these kinds of projects.
x In Steubenville, Ohio, there are various large abandoned commercial
   structures that are completel overgro n and in a state of utter disrepair.
x In Wellston, Ohio, one side of E. 2nd street is completel vacant and blighted
    ith the e ception of a single building.
x In Wellsville, Ohio, there are various abandoned buildings that once had
   shops on the first floor and residences located above.
                                     Req e

The Ohio Count Land Bank Association asks on behalf of its members and Ohio
communities for a commitment of at least 200 million dollars to begin to deal ith
the nightmarish conditions that so man of these abandoned structures pose for
Ohio cities, villages and to nships. Because the blighted propert problem
continues to be an issue ith residential structures, e are looking for funding that
is fle ible that e ould generall characteri e as nuisance abatement funding.
This funding ould have to include environmental clean-up dollars as so man of
these properties pose environmental risks. The nuisance abatement categori ation
might also give these land banks the fle ibilit to save properties b preserving
them, as opposed to demolishing them. Count land banks have rehabilitated
thousands of Ohio single famil homes through innovative programs like the Deed
in Escro program in Cu ahoga Count , and man counties have asked that
monies allocated allo that fle ibilit as ell.


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