ASHLAND — The man who helped start the Ashland County Land Reutilization Corporation in 2018 was a banker for 42 years before dipping his toes in the land bank world.

When he learned Ashland’s land bank — a quasi-governmental agency that operates with a mix of public and private money — works a bit differently from others, he was taken aback.

Here are the facts, based upon a three-month review by Ashland Source.

• The land bank voted at least once on a purchase of a property through email, a purchase that never showed up on the board’s subsequent minutes.

• The land bank does not have a public records retention policy.

• The land bank does not have a public information officer dedicated to handling requests to inspect or review records. Those responsibilities instead fall on the organization’s lone employee, who happens to work the job part-time.

• The land bank does not regularly consult with a lawyer.

• The land bank has missed deadlines for financial filings set by the Ohio State Auditor.

• Angie McQuillen, the county’s treasurer, said she wouldn’t participate as a member of the land bank’s board if she wasn’t required to by state law.

• The vote conducted by email resulted in the purchase of a property owned by a fellow board member — a move that Ashland County officials have characterized as problematic and a possible ethical violation.

Hal Sheaffer, 74, said he volunteered his time at first. When the land bank became established as a nonprofit four years ago, the board at the time decided to compensate him for the service.

But when it came to hiring him to serve as its director — a reasonable next step — the board did no such thing.

Four years later, Sheaffer can only speculate as to why.

“I did all that work for them, but I wasn’t going to do everything they wanted me to do without first thinking about it,” he said. “My impression now is that it’s being run like a private club. That’s exactly why they didn’t hire me.”

Let’s review some basic information.

What is the land bank in general terms? How does it work? How is it organized? And does Ashland’s inner workings align with the way others around the state operate?

Land banks have existed since the 1960s and 1970s, though there are some differences between the modern land bank and those from the early days.

First, land banks — at least the modern construct — are public authorities or nonprofit organizations created to acquire, hold, manage and sometimes redevelop property in order to return those properties to productive use, according to Local Housing Solutions, an organization that tracks housing policies.

Today’s land banks cover a wider area. The land banks of old were limited by jurisdiction, making it difficult for numerous agencies to address properties in various locations.

Modern land banks also streamline the process by establishing the primary method of acquisition through tax foreclosures.

The new land bank model allows for the entities to secure sources of funding without creating new taxes. As a corporation, the land banks are legally distinct from local government.

The modern land bank model originated in Flint, Michigan — the birthplace of General Motors. The city is the seat of Genessee County, the state’s fifth-largest population at 425,790 people. At the turn of the century, the auto industry began to close plants.

Flint’s GM plant closed in 1999, devastating the county’s economy and leaving the once-filled houses empty and rotting. The new reality led to the formation of the Genesee County Land Bank, the modern land bank, in 2004.

Since then, the land bank reports more than 55% of all its sales resulted in home ownership. The land bank has demolished around 8,300 structures since 2004 and currently has 14,359 properties that await demolition or rehabilitation. In 2021, the land bank’s 579 sales transactions generated $2.6 million in revenue.

By 2009, Cuyahoga County in Ohio started a land bank for similar reasons.

“You are left with all those vacant, abandoned homes,” said Bart Hamilton in a 2017 Richland Source article.

Hamilton serves as Richland County’s treasurer and is that county’s land bank chair.

“The home market was just so destroyed that you are never going to get enough people back to fill those houses. The longer they sit, the more damaged they become,” he said.

Richland County formed its land bank in 2013, after seeing success with funds available to county treasurers through the state’s Attorney General’s office under a program dubbed Moving Ohio Forward.

The program helped communities around Ohio repair and rebuild the mortgage foreclosure crisis and led to the demolition of blighted homes in Mansfield, Bellville, Lexington, Plymouth and Shiloh in Richland County.

Today, the Richland County land bank oversees the demolition of around 50 blighted houses every year, using funds from a Mansfield income tax levy, interest and penalty fees assessed to property owners who fail to pay their property taxes, grants and proceeds from sales.

As a nonprofit, Richland County’s land bank can legally accept donations and raise money.

“We’ve never had money given to us. We’ve never had a fundraiser,” said Amy Hamrick, the Richland County Land Bank’s manager.

“I wouldn’t mind it, though,” she said, chuckling.

She said the land bank has, however, received donated property in the past.

Prior to 2015, state law prevented counties with smaller populations from having land banks. But the law changed to eliminate the population requirement. Now, counties of any size are able to form a land bank.

Ashland’s land bank formed in April 2018 and it is loosely modeled after Richland County’s. It is also a nonprofit. It receives funds through interest and penalty fees assessed to property owners who fail to pay those taxes — also known as Delinquent Tax Assessment Collection — grants and proceeds from property sales.

The land bank received $15,000 from the City of Ashland and the county when it first formed, along with $25,000 from the Ashland County Community Foundation as seed money.

Ashland’s land bank also receives anonymous cash donations.

The Ashland land bank, for example, used anonymously donated funds to purchase one of its first houses, a multi-unit residential house at 118 Fourth St., for $115,000.

That house was soon demolished using a $37,500 grant from the Neighborhood Improvement Program, a state grant program intended for the demolition of homes that could cause surrounding property values to decrease, according to information from the program’s website.

As of Dec. 31, 2021, Ashland’s land bank had $401,323 in total assets, according to financial statements prepared by Tim Baker, an accountant hired by the land bank.

According to the organization’s tax filings for 2018 through 2020, the latest year available, the land bank has received a total of $474,441 in contributions.

The only known contributors, as shown in 2020 tax filings, are the City of Ashland and Ashland County. That year the organization’s tax filing showed the city contributed $15,000. The county contributed $93,153.

The land bank’s tax records for 2019 show the organization received “government grants” in the amount of $147,305 and “other contributions” at $148,980 for a grand total of $296,285.

Hal Sheaffer

The land bank was required to file a “Schedule B” as part of its tax filing for that year. It did, but the contributor is only listed as “restricted.”

Bill Harvey, the land bank’s manager, said the land bank’s 2021 taxes have not been prepared yet because the deadline has been extended to Nov. 15.

The acceptance of anonymous, private donations is just one area that Ashland’s land bank differs from Richland County’s.

Richland County has a staff of two part-time employees and one full-time. Ashland has one part-time employee, Harvey.

Ashland’s board has nine members. State law mandates a land bank’s board must have five, seven or nine members. They must be comprised of the county’s treasurer, two or all three county commissioners, a representative from the largest municipality and a township representative if at least two of them have a population of 10,000 or more.

Hamrick said she and the staff are technically employees of the Richland County Treasurer’s office.

“But there are 64 land banks across the state. No two of them are run the same,” she said.

Ashland County’s land bank would have been similar to Richland County’s had its treasurer, McQuillen, felt as if she could have made it part of her office’s already-stretched operation.

“I didn’t want to establish one myself as a treasurer because of our limited manpower,” McQuillen said, adding her office has just three employees. “There are certain counties where the treasurers establish the land bank.

“I didn’t see the real need for it and it takes an awful lot of time to do.”

She said Ashland County’s process for acquiring blighted properties worked before the land bank through an auditor’s sale — which is triggered when a property does not sell after two attempts in a sheriff’s sale.

“We had that process working. I just didn’t see that many properties in the county that I guess fit in to the land bank reasoning,” she said.

McQuillen sits on the board, but only because she’s obligated by state law. She said she doesn’t have anything against the land bank.

“I just think things were working fine the way they were and why create another area of bureaucracy when I didn’t think we really needed it?” McQuillen said.

Sheaffer helped establish Ashland’s land bank in April 2018. He said when it came time to hire him as its director, the board vacated his role indefinitely, citing financial concerns.

Instead, the board compensated him for the time it took to establish it — a payment of $4,000.

The board then utilized Erin Collins for administrative support. At the time, she worked as the project coordinator for Ashland Area Economic Development. She eventually moved into a director role for the land bank, a position she held while she also worked as a business administrator for the Ashland County Board of Commissioners.

She resigned from the commissioners’ office in January for another job in another state.

The board also hired Clint Leibolt, of Critchfield, Critchfield and Johnston as its attorney in its early days. Tax filings do not show payment for legal services until 2020’s filing for $270, listed under expenses for “legal.”

Leibolt did not respond to requests for comment.

Richland County pays an attorney, John Burton, to advise on several facets of the organization’s operation.

“I talk to him almost everyday,” Hamrick said. “I go to him with everything, because, he’s basically a genius.”

When reached by phone, Burton declined to comment because he has represented Ashland’s land bank in the past, though it’s “been a while.”

When first established, Ashland County’s land bank also hired Baker as its accountant. He was paid $1,425 in 2018, according to the organization’s tax records for that year. In 2019, he was paid $1,692.

Harvey, who also works as a real estate agent with NextHome Next Stepp, earned $9,614 in 2018 and $15,300 in 2019, according to tax filings.

The Ohio State Auditor performed a “basic audit” on the Ashland County land bank from years ending Dec. 31 2019 and 2018 that found “the (Ashland County Land Reutilization Corporation) did not file their Financial Statements … in a timely manner.”

It also found it “has not established a records retention schedule nor appointed a records manager. In addition, a public records policy has not been posted at the office.”

From a financial standpoint, the auditor’s observations are insignificant, said Mark Kovac, a spokesman for the auditor’s office.

“We see those kind of routinely in our audits,” he said.

Kovac said the auditor’s office is in the process of completing an audit that would look into 2020 and 2021 and that it would be published later this year.

The Ohio Land Bank Association’s president and general counsel, Gus Frangos, said in an emailed statement that “OLBA promotes and emphasizes the highest level of best practices and ethical integrity of its members,” and then deferred a reporter’s questions to “local officials and representatives in Ashland County.”

Harvey said the late filing in 2018 and 2019 were before his time with the organization.

“So I don’t know the reason as to the late filing, or if penalties were levied,” he said. (Kovac said there is no record from the auditor’s office that a fine or penalty was levied for the late filing.)

The land bank has posted its general public records policy on its website.

The records policy, however, is not currently posted at its office, which is located at the Ashland County Mental Health and Recovery Board along County Road 1095.

Harvey said the land bank’s office is “used sparingly for board meetings and property transfer closings.”

The Richland County Land Bank has permanent space at the county administration building, where all its meetings are held.

“But, as the organization’s sole employee, I generally work out of my home office,” Harvey said. “Similarly, as to a records retention officer, since the organization only has one employee (the director), then the director would be the record retention officer. And that would currently be me.”

Sheaffer said he believes the land bank is a force for good, and he doesn’t regret working to establish the organization four years ago.

“Even in Ashland, there’s a need,” he said, describing a hypothetical situation in which a homeowner gets in trouble financially and leaves a house vacant in a neighborhood. “The land bank is a way to get something done. That would be the purpose.”

Sheaffer said he just wishes the land bank operated differently. The purchase of Ashland County Commissioner Denny Bittle’s house through a vote conducted via email is an example of an action that gives the appearance of impropriety, he said.

“What they do, it should be public, clear and available. I mean, it’s part of the county, for gosh sakes,” he said.

He also pointed to an Ashland Source article that revealed the county has paid nearly $300,000 on the empty Pump House building since purchasing it in September 2020. Sheaffer said the Pump House was on the land bank board’s radar around the time he worked on establishing it.

Sheaffer said the board “couldn’t stop talking about the Pump House project” and how getting the building was “the first project we were going to do.”

But he said there was never a clear plan on what that all meant.

“All I heard was ‘We’re gonna do the Pump House — don’t worry about it,’” he said. “Well, I was a banker for 42 years. I have a concept on what it costs to do something to an old building. I wasn’t going to do stuff that doesn’t make sense,” he said.

This is the first of two parts in a series that looks into how the Ashland County Land Reutilization Corporation operates. The second part, found here, looks into a purchase of a property previously owned by an Ashland County commissioner and land bank board member.

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