Pittsburgh one step closer to new taxing agreement for land bank

Pittsburgh has moved one step closer to finalizing a taxing agreement that would allow the land bank to operate more easily and cheaply.

City Council members gave preliminary approval to two pieces of legislation Monday afternoon, one of which will create an agreement between the city, Allegheny County and Pittsburgh Public Schools so that the land bank can waive back taxes on abandoned homes.

Last September, the Pennsylvania Legislature passed a law that allows land banks to more efficiently clear those liens through sheriff’s sales. But Pittsburgh’s land bank cannot take full advantage of the law until the agreement with the county and school district is finalized.

“This is the next step … in really being able to fully utilize that new tool,” Kyle Chintalapalli, the city’s chief economic development officer, said during a council meeting Monday afternoon.

Being able to clear the back taxes more quickly allows the land bank to get these abandoned homes back on the city’s tax roll more quickly, he said.

The city is able to forgive its own back taxes on these properties but needs this agreement with the other taxing bodies to forgive the rest of the taxes.

If this agreement is approved, the land bank would also be able to acquire properties from the sheriff’s sale, rather than just through a treasurer’s sale which is how it currently is operating. A final vote on the legislation could come as early as next Tuesday.

The sheriff’s sale often takes half the time as the city’s current process, but in the nearly decadelong history of Pittsburgh’s land bank, it has been unable to use that process because it would have to pay back all taxes on the properties.

Last summer, City Council passed a different version of the tri-party agreement, which allowed the land bank to take in the abandoned properties and sell them to developers and community groups.

If the other taxing bodies — the county and the school district — agree to enter into an agreement, other issues will still have to be worked out. The land bank is proposing a flat fee for the sheriff’s sales; that fee would have to be agreed upon.

Additionally, once a property goes back onto the tax rolls, 50% of the city’s tax from that property will go directly to the land bank for the next five years. The land bank is hoping to come to a similar agreement with the county and the school district to help boost the land bank’s revenue, Sally Stadelman, the land bank manager, said Monday.

“In some aspects, we will be a little more self-sustaining,” she said.

Last summer, City Council cut the land bank’s budget from $7 million to $3.5 million. Bringing in more revenue from other sources will help operations, Ms. Stadelman said.

Discussions between legal representatives for the three taxing bodies have already begun, Mr. Chintalapalli said, but once council gives final approval to the agreement, there will likely be “regular meetings” to work out the details of the agreement.

The legislation in front of council allows them to approve entering into an agreement, but council members will not get a chance to approve the final details of the agreement. It’s unclear why council members would not get final approval over the specific terms of the agreement.

From there, Mr. Chintalapalli estimates the final agreement could be finished in a “few months.”

Finalizing the agreement would be a huge step forward for the land bank, which struggled for years to sell even one property until 2023.

Councilman Bobby Wilson, who currently sits on the land bank board, said this agreement was “essential” for moving forward.

The second piece of legislation will expand the land bank board from nine to 11 members, giving one seat each for a representative from the county and the school district.

As it stands, the legislation does not list any eligibility requirements for those representatives, which was a concern for some council members.

“The county could appoint a stockbroker from New York City,” Councilwoman Deb Gross said Monday. “It’s so loose they could appoint a venture capitalist from San Francisco.”

Council President R. Daniel Lavelle, who co-sponsored the legislation, said members could work on an amendment that would require the appointments to live within city limits, but warned against getting too specific in the requirements.

Mr. Wilson noted that to work for the county or be a Pittsburgh Public School Board member, a person wouldn’t have to live in the city.

“The ultimate goal is for them to have a seat at the table,” he said.