Friday, April 23, 2010

If LRA properties were free, would you take one?

The city has a major budget deficit. It also holds title to a lot of abandoned real estate through the Land Reutilization Authority (LRA). The land owned by LRA costs the city money to maintain and does not generate any tax revenue. The city offers these properties for sale but still has a heavy cost burden maintaining the inventory.

What if these properties were offered to the public for free? Not all of them say, but starting with just the vacant lots? If you could acquire a vacant LRA lot for free, with a guaranteed tax bill of say $100 per year and requirements to keep the lot cut, would you want one? Two?

What would you do with the property? Assume it has a collapsed building buried under the ground. Cost to excavate and haul away the old building would likely run in the $10,000 - $15,000 range. If you left it there, the land wouldn't be good for much construction, and it would be hard to grow trees with all the brick and stone debris just a few feet below the surface.

Nonetheless, you'd own the ground - and everything in it. Over time, if development came your way, the land might be worth something. If you were a neighbor, you could fence the lot and expand your own yard. And you'd be saving the city money.

Free land. Would you take the offer?

11 comments:

Nicholas said...

I would jump at the opportunity if I knew of it. That would be awesome.

Anonymous said...

I would take alot or two for free in a heartbeat.

Rick Bonasch said...

If you took the property, what would you do with it? How would you manage the asset?

Anonymous said...

How about building a miniature golf and karaoke bar?

STLhistory said...

It's not the cost that generally makes people shy away -- it's the requirement to develop the land. LRA property is basically free already; if the city did away with the requirements to have a plan to develop the land, then you would see more interest in LRA property.

The solution to the problem of too much city-owned land and not enough interest in it is to make the land cheap and the value high; the land already is cheap, but the value is too low in this market for it. Put a police car every four blocks, put up some CCTV cameras to monitor alleyways and commercial districts, and rebuild the streets and sidewalks, and I think you would see interest in city land perk up.

Just my two cents.

Ben S. said...

I agree with STLHistory's first paragraph. LRA currently has a high barrier to entry that keeps them from moving their inventory, which is their requirement that buyers show a plan to develop (or rehab) and full financing in place to complete the project within 18 months of purchase. This is good, in a sense, in that it keeps speculators from just buying the land or buildings and sitting on them...but isn't that just what LRA is doing?

STLhistory said...

Maybe a little speculation would do some good in depressed areas of the city, as long as the grass were cut. And as the post noted, bringing in taxes (even minimal) would be better than having the city pay to maintain the land.

Another issue with LRA is even without the development plan requirement, the most basic abatement of environmental issues (that demolished building buried under the soil) and fixing sewer, gas, electric and water lines for future development is often cost prohibitive.

Mark Groth said...

At $100 taxes per year I'd jump on one for an urban raised bed garden. I already pay $50 for 2 beds in the Holly Hills community garden, so $100 would be a bargain. But like the others mentioned above, the LRA would have to lift their development requirements.

Vanishing STL said...

There are several problems with the way LRA manages the property it owns. LRA used to basically give away buildings for a dollar. The problem comes with the restrictions that LRA puts on how the property gets rehabbed. They force you to get a general contractor, which is more expensive than doing it yourself.

Many of our great neighborhoods such as Soulard and Lafayette Square are what they are because people had the opportunity to come in and get a big beautiful house for little money and rehab them themselves over time into great homes. The way LRA works, this ability to put a lot of sweat equity into a house is diminished.

With vacant property, the problem is that LRA does a lot of land banking waiting for that magical big developer to come along and do 10 blocks of new houses at once. While this has occurred in some areas, the ability for small developers or individuals to develop property can be an issue. The issue is that it is up to the Alderman what happens to the land. This power needs to be take away from the alderman and there needs to be consistent policy that is applied to the whole City.

Anonymous said...

To Mark Groth - Maybe LRA would take you up on a proposal to develop a raised bed urban garden. It just might work, especially with letters of neighborhood and/or aldermanic support. You should try and see what happens,

To Vanishing St, Louis - Isn't the condition of most buildings owned by LRA worse than the condition of most shells saved in Soulard and Lafayette Square?

If you want to see an area where the condition of vacant historic buildings has really gone downhill, check out Hyde Park. Soon, the only future for these buildings will be demolition. The ironic thing is, Hyde Park is one of the city's oldest National Register historic districts.

peachgirl said...

I could do a lot with some properties (co-op's & community centers) and vacant lots (community gardens, edible landscaping, and places for these kids to play that are currently running the streets!