LINCOLN — Omaha has 15,273 vacant and abandoned properties, mostly east of 72nd Street.
But a new approach to get such lots assembled for redevelopment — “land banking” — ran into a wall of questions Wednesday in the Nebraska Legislature.
The proposal would allow Omaha and cities in Sarpy County to create a public authority, or land bank, that could obtain tax-delinquent properties and assemble them into larger parcels that could be sold for new housing, businesses or parks.
State Sen. Heath Mello of Omaha said land banking has been successful in getting vacant properties back on the tax rolls in cities such as Cleveland and Flint, Mich., and that land bank laws have been passed in four states recently.
Current state law, Mello said, allows a land reutilization commission in Omaha to obtain vacant properties that no private buyer wants.
A land bank could go much further, he said, by bidding on vacant lots, assembling adjacent lots into a larger parcel, keeping some property tax revenue to finance purchases and pay taxes, and then seeking redevelopment of the land.
The City of Omaha, Habitat for Humanity, the Greater Omaha Chamber of Commerce and banking and builders groups are among those supporting the land bank proposal.
But some lawmakers wondered if a land bank would be unreasonable competition for private developers.
Sens. Bill Kintner and Jim Smith, both of Papillion, were among the lawmakers questioning whether a new government entity was necessary. Kintner raised concerns about giving priority to bids by the land bank over private entities to obtain certain problem properties.
Sen. Ernie Chambers of Omaha raised another issue: whether inner-city residents would have any say in the development plans, when mostly bankers and real estate agents would sit on the land bank board.
Mello said the free market isn't working to redevelop these dilapidated lots, while a land bank could work with banks and philanthropic groups to assemble parcels for reuse.
In Cleveland, he said, a land bank worked with banks and foundations to get vacant, hazardous buildings torn down so that land would be redeveloped.
The City of Omaha, said supporters of Legislative Bill 97, lacks the money to tear down such structures. The city razed only 36 of the more than 600 properties that had pending demolition orders in 2011.
The Legislature adjourned Wednesday before the bill could be advanced. Mello said he's working on amendments to address concerns.
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