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A Lot of Lots

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Land is often considered a smart investment. After all, they're not making any more of it.

But Shelby County government has about 3,000 parcels of ground that it can't give away.

"We have a huge inventory," says county deputy CAO Sybille Noble, "but there's nothing you can accomplish with it."

As part of the County Commission's core city initiatives ad hoc committee, county government

is exploring ways to fight blight and, starting in New Chicago, give small lots back to the community.

Under state law, the county is required to bid on and receive tax-delinquent properties at auction. Developers, community housing corporations (CDCs), and the city of Memphis Housing and Community Development division usually take the properties that have potential for renovation or redevelopment.

"What is left for the county are undesirable lots," says Noble. "A lot of times they are in undesirable neighborhoods or it will be a single lot on one street. No developer wants to come in and develop one lot."

But what starts as a tax problem for one property owner remains a tax problem for the surrounding community. The county isn't earning any property taxes from it — and actually is expending money to maintain it — and the vacant land may contribute to a decline in property values neighborhood-wide.

At an ad hoc committee meeting last week, a real estate services department plan recommended creating a county land bank, budgeting $3 million for a housing trust fund, and a side lot disposition policy that transfers property to surrounding homeowners.

The county owns various small, unbuildable lots, usually slivers left over from road construction projects, and hopes to give them to the adjoining property owners. (The county is required to transfer the lots at fair market value, but as Noble says, "If the fair market value is zero, then that's what it is.")

Many times, however, the neighbors aren't interested in owning the extra land because of the extra taxes they anticipate — rightly — that are attached.

Starting with the New Chicago area, the county is testing a new approach. The assessor's office will determine how much each parcel will cost in property taxes each year. Noble hopes that figure, which she says is often minimal, will help adjoining property owners decide to take the slivers.

The plan also creates a functioning land bank, something that city leaders have been talking about for the last few years.

"We essentially have a land bank because we have an inventory of property, but the only thing our land bank does is retain the property until it's sold," says Noble. "While we have it, though, we have to maintain it."

Instead of simply mowing the grass or cleaning up debris, the ideal land bank would be able to purchase HUD foreclosures and assemble chunks of land it would then be able to transfer to CDCs or private builders for redevelopment.

"Right now, there's a lot here and a house here. If we could go in and assemble several parcels on a block, I think we could transform the neighborhood," says Noble. "Building or rehabbing one house on a block doesn't change the block."

The real estate plan proposed an initial budget of $3 million for a housing trust fund. In addition to assembling parcels, the money would pay to demolish existing structures on otherwise desirable property and for beautification projects. A more specific proposal on fees and funding sources is expected for the next core city initiatives ad hoc meeting.

"You're not going to transform neighborhoods without investing the money," says Noble. "You can do little things, but you cannot transform a neighborhood."

Memphis city government has ongoing efforts to revitalize its older neighborhoods in combination with local CDCs and federal programs. But there is more than enough work to go around.

For instance, the city does about 700 demolitions a year. While there are currently about 1,200 properties on the city's condemnation list, city officials estimate there may be as many as 10,000 properties citywide that need to be demolished.

The county is quick to say that it wants to supplement the city's efforts, not supplant them.

But, as those who own real estate know, you either maintain it or watch it deteriorate.

"If we really want to make a difference in some of our declining neighborhoods, at some point we have to invest in them," says Noble. "For a long time, Memphis and Shelby County have depended on private investment. Private developers do a lot in neighborhoods, but some [neighborhoods] are in such decline, they just can't go in there."

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