Madeline Fletcher”™s newly renovated office in downtown Newburgh occupies what was a one-story wing of the former Brutus W. Hodge Funeral Home, whose business name still hangs in faded gold letters  on the red-awninged 19th century brick building next door at 13 Chambers St.  Some detritus and tools of the mortuary trade remained on the premises, Fletcher said grimacing, when the organization that she leads as executive director, the Newburgh Community Land Bank, took over the property and relieved the city of one of the 300 vacant buildings it holds and on which it pays school and county property taxes.
Built around 1895 and included in the city”™s East End Historic District, the four-story Hodge building shows a representative architectural style from Newburgh”™s industrial heyday on the Hudson River. It is one of the first two buildings that the 2-year-old nonprofit land bank has sold to private owners, who will restore and return the properties to the city”™s tax rolls.
Fletcher said the former funeral home will be renovated for upper-floor two-bedroom apartments and first-floor commercial space. The new owner, Hudson Valley architect Jeff Wilkinson, plans to move his firm across the river from Beacon”™s Main Street to Brutus Hodge”™s former haunt.
From a sunny, many-windowed conference room in the land bank office, Fletcher pointed north across a vacant lot to another boarded-up commercial building on Chambers Street. Its new owner, artist John Delk, a Newburgh resident, plans to use the building as his studio-gallery, she said.
“Typically, governments are not good owners and managers of property,” said Fletcher, a Brooklyn-raised attorney who came to the newly formed land bank from Pathstone Community Improvement of Newburgh, a housing-preservation nonprofit. “It”™s not their wheelhouse. It”™s not where they should be.” Community land banks relieve municipalities of that role and serve to return properties to the real estate market and to commercial and residential occupancy, spurring broader community development and employment in the process, she said.
Fletcher traced the origins of the community land bank initiative in Newburgh to the Land Use Law Center at Pace Law School in White Plains, which in late 2010 received a Ford Foundation grant “to look at Newburgh issues,” she said. That study recommended a three-pronged approach that included streamlining the city review and approval process for developers, improving city code enforcement and forming a land bank.
Pace law students examined Newburgh”™s buildings registry, which listed 200 vacant buildings. Fletcher said. The students, however, identified 700 vacant buildings, or 10 percent of the city”™s inventory of 7,000 buildings.
“I think it”™s a similar problem that you see everywhere” in urban communities, Fletcher said, where “white flight” to suburbia and downtown-leveling urban renewal projects have left blighted neighborhoods and shuttered business districts.
At the time of the Pace initiative, no land banks existed in New York, Fletcher noted. “It was very much a tool of the Midwest, the Rust Belt.” Instead, housing advocates in Newburgh started a housing development fund company that would qualify for state funding.
In 2011, the state Legislature adopted legislation that initially authorized the creation of 10 community land banks statewide under New York”™s Not-for-Profit Corporation Law. The nonprofits were to acquire vacant, abandoned or foreclosed properties and rebuild, demolish or redesign them. The authorizing legislation, though, provided no funding for the new organizations.
The Newburgh Community Land Bank was one of the first five land banks formed in 2012. “For 18 of those 24 months” of its existence, “we had basically no money,” Fletcher said.
In 2013, the Newburgh nonprofit was awarded $2.43 million from the $13 million fund allocated by state Attorney General Eric Schneiderman to his Land Bank Community Revitalization Initiative. The money, which Newburgh received only last March, came from New York”™s share of the $25 billion national mortgage settlement negotiated in 2012 by Schneiderman and other states”™ attorneys general with the nation”™s largest banks.
At an August appearance in Newburgh, Schneiderman announced a second allocation of $20 million for which Newburgh and eight other land banks around the state, from Suffolk County to Niagara County, will compete. He called land banks “a critical tool for helping communities plagued by vacant and abandoned properties recover from the housing crisis.”
According to the attorney general”™s office, the statewide inventory of vacant buildings rose 27 percent in the boom-and-bust decade of 2000 to 2010.
For the fledgling Newburgh organization, “The value of that $2.43 million cannot possibly be overstated,” Fletcher said. “With this very specific funding, we”™re able to be more flexible and approach things more differently than just housing development.”
“Our goal is to make it easier for development. We”™re not developers.”
Reaching out to large and small developers, Fletcher said she posed the question, “”™Why aren”™t you in downtown Newburgh?”™”
Environmental obstacles, and asbestos removal in particular, “were really the biggest barriers” cited by developers, she said. “People were like, ”˜It”™s just too much risk.”™ And the (Newburgh real estate) market is challenging”¦Right now, the market is so deeply dysfunctional.”
Rather than focus on developing single properties, “We want to remove barriers for a lot of buildings,” Fletcher said. To do that, the land bank has budgeted $75,000 for each building it acquires to cover asbestos abatement and structural stabilization costs and predevelopment expenses before selling the properties to well-vetted buyers.
“We expect to sell them to the new owner for a small fraction of that,” she said.
Fletcher said the community land bank owns about 25 properties and is scheduled to close with the city on another 11 building purchases, each priced at a nominal $1. She said Wells Fargo has donated three foreclosed properties that came with cash awards from the bank of $15,000 to $25,000 per building ”“ “which is enough to help us batten them up.”
“Right now we have more parties interested (in buying) than we have properties,” Fletcher said. But the land bank has not rushed to dispose of those buildings. “We”™d rather hold them than pass them on to bad owners. We”™re expecting a number of proposals from regional and national groups that actually do good work.” Among those nonprofit developers, The Community Builders Inc. is at work in Yonkers on Schoolhouse Terrace, a $63 million redevelopment project with the Yonkers Municipal Housing Authority that will create 120 apartment units for families and seniors with mixed income levels on the former site of an abandoned public school.
Though the Newburgh Community Land Bank is only 2 years old, Fletcher already is envisioning its demise.
“At the end of the day, our endgame is go out of business,” she said. “We want to survive until we have a functional market.”
“Right now, we”™re just trying to figure out the best way for us to make those connections” that will bring private developers to Newburgh”™s historic commercial and residential blocks. “We”™re also trying to enable more comprehensive community development” by hiring local contractors and employing local residents applying skills learned in job training programs. “We”™re going to have a million bucks”™ worth of work to do that hopefully will attract contractors.”
“If we do all those things well, in 10 years we”™ll be history,” Fletcher said.
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