Land Reuse Agency

LRAs are very similar to Urban Renewal Authorities. Key differences include that LRAs may operate in communities that lack comprehensive plans and redevelopment plans, may not exercise the power of eminent domain, may not compete with other purchasers at a tax lien sale, and may collect a portion of the property taxes on property it holds if authorized by the county taxing authority. Arguably, LRAs have fewer powers but have the potential to hold properties in a broader geographic area. Therefore, the creation of an LRA may be appropriate in communities where properties are very scattered and preparing redevelopment plans would be impractical.

LRAs may only hold property located within the jurisdiction of the entities that create them.¹ In other words, a municipal LRA may only hold properties within that municipality, and a county LRA may only hold property within that county. Two or more municipalities or counties may also establish and maintain an LRA by entering into an intergovernmental cooperation agreement.² In this case, the LRA may hold property within the jurisdiction of the authorizing municipalities or counties.³

Prerequisites

Local Ordinance: A county or municipality must adopt an ordinance to create an LRA. The ordinance must specify the (1) name of the LRA; (2) number of members of the board; (3) names of the initial board members; (4) qualification, manner of selection or appointment, and terms of office for members of the board; and (5) methods of community input.⁴

The ordinance must be filed with the Secretary of State and the West Virginia Housing Development Fund. After receipt of the ordinance, the Secretary of State issues the appropriate documentation indicating the formation of the entity.⁵

Consideration of Existing Land Use Plans: LRAs must consider all land use plans, such as a comprehensive plan, redevelopment plan, or overlay district within a zoning ordinance, in the disposition of properties.⁶ According to national research, the most successful land banks incorporate local land use plans in making their acquisition and disposition decisions.⁷

Advantages

• LRAs typically make acquisition and disposition decisions with the long-term interests of the community and surrounding property owners in mind. LRAs must consider land use plans and have a process to collect community input.
• Dedicated LRA staff may be able to address neglected properties in a more efficient and cost-effective manner than groups addressing properties on an individualized basis.
• LRAs are long-term landowners with the patience to hold onto property until an appropriate reuse can be identified.
• Property held by an LRA is tax exempt for 5 years or as long as the property is continuously leased to a non-profit organization or a governmental agency at substantially less than fair market value.⁸
• LRAs must maintain an inventory of their property that is available for public review and inspection.⁹
• LRAs have standing to file an action in circuit court to quiet title to real property in which they have an interest.¹⁰
• LRAs may receive a portion of the county’s real property tax if authorized by the taxing jurisdiction. See Funding Subsection below.

Disadvantages

• LRAs may not obtain property through eminent domain, directly or indirectly.¹¹
• LRAs may not acquire any interest in oil, gas, or minerals that have been severed from the property. ¹²
• If purchasing property from a URA, the property must be fee simple.¹³ For more information on fee simple properties, see Appendix I on Title Opinions.
• LRAs are not typically self-financing and may be expensive to administer. See Funding Subsection below.
• LRAs may purchase tax liens only when no other person at the tax lien sale makes a minimum bid on the taxes, interest, and charges owed.¹⁴
• In West Virginia, LRAs currently lack the right of first refusal during the tax sale (in other states, LRAs have a right of first refusal, which is the option to purchase property according to specified terms before any other interested third parties at the tax sale).

Funding

As with URAs, LRAs are not self-financing. Given the low value of most vacant and dilapidated properties, LRAs may find it difficult to earn significant income from sale, rent, or leasehold payments. However, LRAs are authorized to receive grants and loans from other public and private sources. LRAs may also issue a bond or mortgage their property. LRAs may collect a portion of the property tax revenue generated by their own properties if they are authorized by the county taxing authority and do not collect more than 50% of the aggregate property tax revenue generated by a property.¹⁵

Current State of the Tool

As of July 2015, no established LRAs exist in West Virginia.

Notification Requirements/ Special Procedures

LRAs must submit an annual report to the West Virginia Housing Development Fund within 120 days after the end of the fiscal year. The report must include an audit of income and expenditures and a report of activities for the preceding year.¹⁶

A duplicate copy of the annual report must be filed with the governing body of the jurisdiction that created the LRA and the political subdivisions participating based on an intergovernmental agreement.¹⁷

LRA boards must keep minutes and records of proceedings.¹⁸

LRAs are subject to the Open Governmental Meetings Act.¹⁹

LRAs must maintain an inventory of their property that is available for public review and inspection.²⁰

When filing an action to quiet title, LRAs must follow the procedural requirements outlined in the West Virginia Code.²¹ For more information on actions to quiet title, see Section on Title Opinions and Appendix I.

Key Similarities Chart

Key Differences Chart

* For excerpts on the relevant statutory language related to membership in URAs and LRAs see Appendix E.

1. W. Va. Code Ann. § 31-18E-9(f) (West 2015).
2. Id. § 31-18E-4(c).
3. Id. § 31-18E-9(f)(2)
4. Id. § 31-18E-4(a).
5. Id. § 31-18E-4(b).
6. Id. § 31-18E-10(f).
7. Frank S. Alexander, Local Support Corp., Land Bank Authorities: A Guide for the Creation and Operation of Local Land Banks 12 (2005), available at http://www. communityprogress.net/filebin/pdf/new_resrcs/alexander_land_bank_lisc.pdf.
8. W. Va. Code Ann. § 31-18E-9(a)–(b) (West).
9. Id. § 31-18E-10(a).
10. Id. § 31-18E-16. “For purposes of an action under this section, the land reuse agency shall be deemed to be the holder of sufficient legal and equitable interests and possessory rights so as to qualify the land reuse agency as an adequate complainant in the action.” Id. § 31-18E-16(a)(3).
11. Id. § 31-18E-8.
12. Id. § 31-18E-9(c).
13. Id. § 31-18E-9(d)(3).
14. Id. § 31-18E-9(g) (“[I]f no person present at the tax sale bids the amount of the taxes, interest and charges due on any unredeemed tract or lot or undivided interest in real estate offered for sale, the sheriff shall, prior to certifying the real estate to the auditor for disposition . . . provide a list of all of said real estate within a land reuse jurisdiction to the land reuse agency and the land reuse agency shall be given an opportunity to purchase the tax lien and pay the taxes, interest and charges due for any unredeemed tract or lot or undivided interest therein as if the land reuse agency were an individual who purchased the tax lien at the tax sale.”).
15. Id. § 31-18E-11 (“Allocation of property tax revenues in accordance with this subsection, if authorized by the taxing jurisdiction, begins with the first taxable year following the date of conveyance and continues for a period of up to five years and may not exceed a maximum of fifty percent of the aggregate property tax revenues generated by the property.”).
16. Id. § 31-18E-18(a).
17. Id. § 31-18E-18(b).
18. Id. § 31-18E-13(a).
19. Id. §§ 31-18E-13(a), 6-9A-6, 29B-1-1.
20. Id. § 31-18E-10(a).
21. Id. § 31-18E-16.