Many New York municipalities now have a powerful new tool to fight blight within their borders. The recently enacted “Land Banks Act” lets governmental entities with the power to foreclose on tax liens create a not-for-profit corporation to facilitate the return of vacant, abandoned, and tax delinquent properties to productive use. They cannot force the sale of property under NY’s eminent domain law.
The Land Bank Act was established under Article 16 of the New York State Not-for-Profit Corporation Law (the “Act”). To be considered for approval as a Land Bank, the municipality must meet the following requirements:
1. The applicant must be a Foreclosing Government Unit (“FGU”).
2. The applicant must have adopted a local law, ordinance or resolution which specifies:
i. the name of the land bank;
ii. the number of members of the board of directors, which shall consist of an odd number of members, and shall be not less than five members nor more than eleven members;
iii. the initial individuals to serve as members of the board of directors, and the length of terms for which they are to serve;
iv. the articles of incorporation for the land bank, which shall be filed with the secretary of state in accordance with the provisions of the Act.
3. If two or more FGUs and/or municipalities agree to create a single land bank, they must execute an intergovernmental cooperation agreement which includes provisions for dissolution of the land bank.
4. If a school district participates in a land bank, it must execute an intergovernmental cooperation agreement with the FGU(s).
5. The composition and activities of the land bank’s board must comply with Section 1605 of the Act.
There are a couple of significant limitations:
- Only ten land banks can be formed within the state.
- The Land Bank must be approved the New York State Urban Development Corporation, dba Empire State Development.
- March 30, 2012 is the deadline to submit an application for approval to form a land bank.