ST. LOUIS 鈥 After halting new sales for over six months, the board overseeing the city鈥檚 land bank on Monday approved new policies governing the sale of the nearly 10,000 properties in its inventory and said sales could resume by the end of March.
The Land Reutilization Authority鈥檚 new rules will limit how many lots buyers can purchase or put under option and require proof of financing before the LRA board approves sales or option contracts. The LRA board won鈥檛 even entertain most offers without proof of at least a quarter of a project鈥檚 financing, potentially limiting speculators buying LRA land without a plan.
鈥淧roof of financing is a key part of this process,鈥 said LRA Director Lance Knuckles.
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Other changes will limit the length of options LRA approves to as long as five years for larger projects and require developers to maintain vacant lots (but not buildings) while they are under option.
鈥淭hat shift is being made because the property is actually off the inventory, thus preventing anyone else from making an offer,鈥 Knuckles said. 鈥淭hat luxury does come with a responsibility to help us manage the inventory.鈥
The revamp of the LRA鈥檚 sales processes follows a shakeup at the city鈥檚 largest property owner, including the April ouster of Director Laura Costello and the installation of Knuckles.
LRA officials announced the sales pause June 6, a few days after three aldermen were charged with accepting bribes for official acts that included helping a businessman buy land from the land bank. And while land bank officials and Mayor Tishaura O. Jones said the pause was in response to the indictments, one real estate industry veteran said LRA officials had been weighing a pause for months in order to revamp the authority鈥檚 policies.
Some aldermen have complained that there weren鈥檛 clear guidelines for their involvement and how LRA decided which offers to approve. A recent LRA survey of more than 500 people found one-third were frustrated with the LRA sales process and among the most common request was to clarify the application process and why some offers were rejected.
The LRA is the oldest land bank in the country, created more than 50 years ago to take title to the exploding number of abandoned properties in St. Louis during a decadeslong exodus to the suburbs that slashed the city鈥檚 population by more than half to around 300,000 people today. The LRA is supposed to try and return the land to private ownership, though by the time properties make their way through the tax foreclosure process, they鈥檝e often been vacant for years and have deteriorated to the point of being unattractive investments.
With about 8,500 vacant lots and 1,400 buildings in its inventory, many of them concentrated on the beleaguered north side of the city, the LRA has struggled to keep up with grass mowing on its roughly 8,500 vacant lots and board-ups at its 1,400 buildings.
The LRA has begun stabilizing some of its properties using the Prop NS fund approved by city voters in 2017, limiting further deterioration and making them more attractive to potential buyers. And it has worked to demolish some of the buildings in the worst condition to reduce its inventory.
Earlier this month, the LRA approved an agreement with the St. Louis Regional Crime Commission to demolish potentially hundreds of properties and stabilize dozens using $15 million in federal pandemic relief money Missouri lawmakers last year appropriated to the nonprofit commission.
The LRA also hopes to pare its inventory by streamlining how smaller, undevelopable lots are sold. Those lots were previously sold to adjacent homeowners through the LRA鈥檚 鈥mow to own鈥 policy. That policy has now been scrapped in lieu of a blanket policy putting side lots available for sale to adjacent property owners for $100, plus closing costs of about $85. About 1,000 such properties are eligible for sale to neighboring landowners under the new side lot policy.
LRA鈥檚 new pricing policies are still being hammered out, Knuckles said, and will be presented to the board in the next month. The new sales guidelines will be available on LRA鈥檚 website, and interested buyers can submit offers by Feb. 15 for consideration at LRA鈥檚 March 29 meeting.
This article was updated to clarify that the LRA board will consider new offers at its March 29 meeting.