The Challenges of Blighted Properties and How to Address Themby Noel Purdy, President, Downtown Chambersburg Inc.
Did you have a chance at IceFest to share what you’d like to see happen to this building on S. Main Street between Molly's Restaurant and Ludwigs Jewelers? Have you often wondered why someone doesn’t do anything about this particular building?
It’s easier said than done.
First of all, you can’t do anything with a property that you don’t own or are not in control of. It helps to have a property owner who is willing to sell, but in many cases of blight, the property owner is often absent and has no interest in improving the building. In other cases, the property owner is asking for a price that is far above market value. Other constraints and minutia that can prevent a sale or site control are title issues, economies of scale and resources.
This particular property has had a string of outside investors since 2009 who have done nothing with the building. They don’t pay the taxes or utilities. The local municipality has to file claims/liens with the courts in order to collect on delinquent payments.
These types of properties are often on a track for some kind of public sale facilitated by the taxing authority. According to public records, this particular property was most recently purchased at a tax sale in 2013 for $36,000 by Matthew Dunleavy from Philadelphia, who then sold it to the Tafari Property Trust which is located in Philadelphia for $90,000, which was financed by The Entourage Group, LLC - also located in Philadelphia (and all of these parties are affiliated). This property is on track for judicial sale later on in 2017, which would allow an investor to purchase it free and clear of all liens.
What Can Be Done with Blighted Properties?Municipalities and redevelopment authorities have certain tools they can use to help remediate blight. One tool is called eminent domain. In order for eminent domain to be used, a property has to meet the definition of “blighted” and/or be “condemned” by the local municipality. In this case, 115-117 S. Main Street has been condemned. Most municipal entities and redevelopment authorities do not want to use eminent domain because it can be an expensive and long legal process that is politically distressing. Any citizen can ask the local municipality to consider eminent domain.
Another tool that can be used is conservatorship, a relatively new tool in Pennsylvania, where a nonprofit or redevelopment authority can petition the courts to gain control of a blighted property. The nonprofit must come up with a plan to remediate blight if it should be granted the authority to be a conservator. Utilizing this tool can also be time consuming and expensive; an attorney must be hired.
Other communities have land banks; ours does not. Land banks are quasi-governmental entities created to return blighted properties into tax-producing properties. Land banks can receive real property directly from a taxing authority, thereby passing public sales and mitigating risk of another poor investor from acquiring it.
The Future of this Blighted Property...The biggest consideration, is what to do with the property once an investor or intermediary has control of it. This particular property needs significant rehabilitation. Many potential investors have looked at this property but, for many of the aforementioned constraints, have hit a wall with it.
During IceFest, a grassroots campaign sought feedback from the community on what they would like to see in the space. More than 400 people gave their input by writing on a sticky note and taping it to one of the front windows. Bakery, pet store, bookstore, vegan/vegetarian restaurant, arcade/game store and ice cream shop are just a few of the businesses people would like to see there. Cat café was one of the most popular responses, which is a new trend in cafés where patrons can watch and play with kittens and cats while enjoying their coffee, sandwiches and salads.
What would you do if you could gain control of the property? Share your thoughts by leaving a comment!