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Funding structure for Syracuse's land bank slightly clearer
It began sending out foreclosure notices for the first time last month, but a long-term funding source for Syracuse and Onondaga County's newly formed land bank is just starting to come into focus; though some details remain to be worked out.
The Greater Syracuse Property Development Corporation has been working since May on a way to tackle Syracuse's large vacant property problem without a solid funding structure in place. By next week, it could at least have an agreement in place that will guarantee it some cash flow.
The corporation estimates its operating costs will be about $500,000 for the period between those foreclosure notices being processed - March, 2013 - and when it could start getting a cut of the increase in back tax payments - October, 2013.
Line of credit
The land bank is close to securing a $500,000 line of credit from Home Headquarters, a nonprofit housing agency, as well as grants from several nonprofit foundations, according to board members.
The Syracuse Common Council is a little less confident on those outside funding sources coming through.
On Monday, it will vote to make available a $250,000 loan to the land bank and agree to share a portion of the expected increase in back tax payments the city anticipates collecting thanks to the land bank.
"This is our offering, this is our suggestion of where the money comes from," says Councilor Jean Kessner, who introduced the bill. "And this is ‘lets get it going,’ we want to see our city turn around."
Kessner says by her whip count, the loan and agreement will pass.
While the money for the loan would come from better-than-projected sales tax revenue the city collected last year, it's uncertain it will ever be spent. The mayor's administration does not think the loan is necessary, according to Tim Carroll, the mayor's director of special projects.
At one point, the council put forward a $500,000 loan, but that measure was withdrawn. The county legislature may put up $250,000 of its own money - if the city matches it - according to Kessner.
At a board meeting Tuesday, the chairman of the land bank, Vito Sciscioli, said the loan is unnecessary. Instead, he said, the land bank would rather see a solid plan to share the increased back taxes put together.
The land bank wants to use the revenue-sharing plan as its long-term funding structure.
"The revenue sharing agreement is the end game. We can't go forward without it," Sciscioli said during the meeting.
A plan put forward earlier this year by the council, and then withdrawn, established a structure for how much would be given to the land bank, based on what the city historically collects in back taxes each year.
The city would have kept the first $3.2 million collected - what it usually gets every year - and the land bank would get the next million dollars. Sharing would continue up to a total of $2.25 million going to the land bank. Anything over that amount would go to the city, though Kessner says collecting more than an addition million dollars total is unlikely.
Details on hold
The measure to be voted on Monday says the city and land bank will work out a sharing arrangement in October 2013, when it knows just how much money the foreclosure notices scared up. Kessner pointed at the mayor's office for killing the more detailed revenue-sharing plan.
Syracuse's land bank was one of five established earlier this year under a new state law as a tool to deal with vacant and tax delinquent properties in urban areas. About 9 percent (roughly 3,900 properties) of Syracuse is tax delinquent to the point its eligible for foreclosure.