Chapter 82 Land Bank

A redevelopment entity designated by the City pursuant to Section 4 of the Local Redevelopment and Housing Law, P.L. 1992, c. 79 (N.J.S.A. 40A:12A-4); or

A county improvement authority designated by the City to act as a redevelopment entity pursuant to the County Improvement Authorities Law, P.L. 1960, c. 183 (N.J.S.A. 40:37A-44 et seq.) for the purpose of entering into a land banking agreement with said entity, without regard to whether the county improvement authority is otherwise acting as a redevelopment entity in the City; or

§ 82-2 Authority to designate a land bank entity.

The City itself, or one of its departments or agencies, but only if the City is executing redevelopment responsibilities directly pursuant to Section 4 of P.L. 1992, c. 79 (N.J.S.A. 40A:12A-4). In such cases, the designated redevelopment entity shall not need to adopt separate ordinances or resolutions, as appropriate, for the purpose of adopting a land banking agreement or amendments pursuant to Subsections d. and e. of Section 5 of P.L. 2019, c. 159 and the adoption of one ordinance to create the land banking agreement, and one ordinance for each amendment thereto shall suffice. Termination notice requirements, prescribed by Section 14 of P.L. 2019, c. 159, also shall not be necessary.

TRUST AGREEMENT

An agreement between a municipality and land bank entity, pursuant to Subsection f. of Section 5 of P.L. 2019, c. 159.

The City may enter into a land banking agreement with a redevelopment entity, and designate the redevelopment entity as its land bank entity; or

The City may enter into a land banking agreement with a nonprofit entity so long as the by-laws of the nonprofit entity provide that the Chief Financial Officer of the City serves on the board of the non-profit entity, ex officio.

§ 82-3 The land banking agreement.

The City of Rahway shall enter into a land banking agreement with a designated land bank entity. The land banking agreement shall meet the following requirements and follow the following procedures:

The land banking agreement shall establish the responsibilities of the land bank entity and shall specify the terms and conditions under which the land bank entity may acquire property on behalf of the City of Rahway, demolish and otherwise clear buildings and conduct other site improvements located on the property, maintain and secure the property, conduct other activities on the property, and, notwithstanding the provisions of the "Local Lands and Buildings Law," P.L. 1971, c. 199 (N.J.S.A. 40A:12-1 et seq.), lease or convey property held on behalf of the City of Rahway.

The land banking agreement shall provide for such City oversight of the land bank entity as the City of Rahway deems necessary and appropriate and shall establish the manner in which any costs and revenues, including proceeds of the sale or leasing of land bank property shall be distributed.

The land bank entity shall not lease any land bank property for an individual term of more than 99 years. Land bank property that is leased, or conveyed by the land bank entity, shall be subject to ordinances adopted pursuant to the "Municipal Land Use Law," P.L. 1975, c. 291 (N.J.S.A. 40:55D-1 et seq.), any redevelopment plan enacted pursuant to the "Local Redevelopment and Housing Law," P.L. 1992, c. 79 (N.J.S.A. 40A:12A-1 et al.), and other applicable state statutes following the lease or conveyance.

Prior to submission of the land banking agreement for approval by the City Council of the City of Rahway, the administration shall hold a public meeting to solicit the advice of the public on the substance and intent of the land banking agreement.

The ordinance comprising the land banking agreement shall include findings establishing the need for land bank activity in the City of Rahway, the public purpose that Rahway intends the land bank entity to pursue, and the qualifications of the land bank entity to carry out the responsibilities established pursuant to the New Jersey Land Bank Law.

The land banking agreement shall be adopted by an ordinance of the City Council of the City of Rahway and then by resolution of the Governing Body or board, as appropriate, of the land bank entity.

The land banking agreement may be amended at any time by an ordinance of the City Council of the City of Rahway and then by resolution of the Board of Commissioners of the land bank entity.

The City may authorize a land bank entity to hold property in trust on behalf of the City. The land banking agreement shall establish whether a trust agreement shall provide authorization to the land bank entity to convey property, lease property, and conduct other land banking activities without City authorization for each individual conveyance, and other action. If provided in the land banking agreement, each trust agreement shall provide the land bank entity with all the powers of property ownership, subject to the potential termination of the land banking agreement pursuant to Section 14 of P.L. 2019, c. 159 and § 82-8 of this chapter.

The land bank entity is not subject to the requirements of the Local Public Contracts Law, P.L. 1971, c. 198 (N.J.S.A. 40A:11-1 et seq.), in accordance with a land banking agreement or with contracts entered by the land bank entity in accordance with the land banking agreement. Public bidding is not necessary to enter into a land banking agreement, or, unless otherwise stated in the land banking agreement, for contracts entered into by the land bank entity in accordance with the land banking agreement.

§ 82-4 Authorized activity of land bank entity.

Pursuant to the land banking agreement or any subsequent amendment thereto, the land bank entity may be designated by the City of Rahway to:

Acquire properties on its behalf through contribution, gift, grant, bequest, purchase or otherwise, whether or not the property is located in an area designated as a redevelopment area or an area in need of rehabilitation; and

Act as its agent, or in place of its municipal officer, with respect to acquisition of property, including but not limited to purchase of tax and other liens, foreclosure of tax and other liens, and individual abandoned property takings pursuant to paragraph (2) of Subsection c of Section 37 of the "New Jersey Urban Redevelopment Act," P.L. 1996, c. 62 (N.J.S.A. 55:19-56), on behalf of the City of Rahway and to acquire and hold in trust such properties on behalf of the City of Rahway; provided, however, that nothing in this Section shall authorize the use of eminent domain beyond that use already permitted by law; and

The City of Rahway, through the land banking agreement, may authorize the land bank entity to hold in trust on behalf of the City any property or properties held by the City and not being used for any public purpose, whether or not the property is located in an area designated as a redevelopment area or an area in need of rehabilitation, without public bidding and at such prices and upon such terms as the City deems reasonable in accordance with parameters that may be established in the land banking agreement. The trust agreement with the land bank entity shall be conditioned on the City's ability to regain control of the properties pursuant to Section 14 of P.L. 2019, c. 159 and § 82-8 of this chapter; and

The City of Rahway, through the land banking agreement, or through the adoption of a separate ordinance, may assign any tax liens or other liens to the land bank entity, subject to the provisions of R.S.54:5-112 and R.S.54:5-113, except that the liens may be assigned with or without consideration and at such prices and upon such terms as the City deems reasonable; and

If the City Council adopts an ordinance pursuant to Subsection D and permits the land bank entity to retain a portion of the interest payments on one or more tax liens, or the proceeds from one or more sheriff's sales or short sales, or both, then the City shall retain the authority to, at any time, by ordinance, restrict the amount of one or both of these funding sources that may be retained by the land bank entity following the date of adoption of the ordinance. The terms of a tax lien assignment pursuant to this Subsection shall remain intact, without restriction by a subsequent ordinance, for no less than one year; and

The land banking agreement between the City and a land bank entity, may provide that properties held by the land bank entity in trust on behalf of the City pursuant to Subsection A, B, C, or D of this section, are held in trust by the entity on behalf of the City for a public purpose and shall be exempt from property taxation until or unless leased or conveyed by the entity on behalf of the City or used by the entity for a purpose that is not eligible for exemption from taxation; and

In leasing or conveying land bank property, unless the property is part of an area in need of redevelopment, a redevelopment entity shall not be subject to the provisions of Section 9 of P.L. 1992, c. 79 (N.J.S.A. 40A:12A-9), but shall be subject to any terms and conditions set forth in the land banking agreement; and

With the approval of the City Council, the land bank entity may act as a land bank entity for more than one municipality at the same time, subject to the provisions of the "Uniform Shared Services and Consolidation Act," P.L. 2007, c. 63 (N.J.S.A. 40A:65-1 et seq.).

§ 82-5 Property taxes on land bank properties.

The City of Rahway through the land banking agreement or a separate ordinance, may provide that a limited series of annual payments shall be made by the City to the land bank entity following one or more fiscal years during which a conveyance of one or more land bank properties from the land bank entity to a private owner occurs, provided that:

Each payment that the City commits to making pursuant to this subsection shall be anticipated in the City budget adopted for the fiscal year during which the payment shall be made.

A payment budgeted pursuant to this subsection shall be limited by the terms of the ordinance, but this payment shall not exceed 50% of property taxes or payments in lieu of taxes due and payable in the fiscal year for all properties that had been land bank properties within the 10 fiscal years prior to the fiscal year for which the payment is budgeted. If a property has been conveyed by the land bank entity more than once, then property taxes and payments in lieu of taxes due and payable for that property shall not be applied to increase the annual limitation established pursuant to this chapter.

An ordinance adopted pursuant to this section may only be applied to real property on which no property tax has been paid, or payment in lieu of taxes collected, for at least two years prior to the property becoming a land bank property; and such ordinance may be applied to any individual conveyance, any group of conveyances, or all future conveyances that fit these criteria.

The distribution of any proceeds associated with the sale and leasing of land bank property shall be addressed in the land banking agreement itself and in amendments thereto. Distributions to the land bank entity pursuant to this subsection may be made in addition to payments provided pursuant to Subsection A and adhere to the following:

Proceeds associated with the sales and leasing of land bank property, and all other proceeds obtained by the land bank entity on behalf of the City under the ordinance, shall be maintained in one or more accounts, separate from all other accounts maintained by the entity serving as the land bank entity.

§ 82-6 Responsibilities of the land bank entity.

The account or accounts shall be deemed to be government records and subject to the provisions of P.L. 1963, c. 73 (N.J.S.A. 47:1A-1 et seq.), commonly known as the Open Public Records Act.

For the purposes of this section, "conveyance" shall not be construed to include a lease.

After entering a land banking agreement, the land bank entity may modify its bylaws or other governing documents to address actions taken on land bank property, including, but not limited to, the leasing and conveyance of land bank property so long as such modifications are consistent with the provisions of the land banking agreement.

Within six months after designation by the City of Rahway, if the land bank entity is a nonprofit corporation, the land bank entity shall create a community advisory board, which shall consist of representatives of recognized community associations and nonprofit organizations operating within the City, including those associations and organizations active in areas where the land bank entity anticipates holding properties.

The land bank entity shall adopt policies and procedures to ensure that the community advisory board is provided with adequate information and opportunity to provide valued input into the decisions of the land bank entity in its capacity as a land bank entity.

In coordination with the City of Rahway and the community advisory board, the land bank entity shall, within a reasonable time, create, maintain, and make publicly available on its website, a database listing all current and former land bank properties, each owner of record since each property became a land bank property, and the sales price of each land bank property that has been purchased by the land bank entity on behalf of the City.

Beginning 30 days after the land bank entity publishes a database and every six months thereafter, in accordance with the guidance provided by the Division of Local Government Services in the Department of Community Affairs, the land bank entity shall update those state agencies identified by the division concerning any changes to the database. To the extent that the database includes properties in foreclosure proceedings, and properties foreclosed within the six-month reporting period, the land bank entity shall take reasonable steps to ensure that the information provided is both accurate and consistent with any corresponding information provided by any state agency, or by the Judiciary.

In coordination with the City of Rahway and the Community Advisory Board, the land bank entity shall incorporate into the online database:

A list of all vacant and abandoned properties within the City; and

A mechanism to allow the public to offer suggestions concerning what properties should be labeled as vacant and abandoned; and

§ 82-8 Termination of land banking agreement.

An interactive mapping component to allow the public to visualize the impact of land banking and the extent of vacant and abandoned properties within the City.

On an annual basis, the Community Advisory Board shall report on the accuracy, integrity, accessibility, and comprehensiveness of the database established. Each annual report shall be accessible to the public through the website of the City of Rahway and the land bank entity.

The land bank entity shall provide an annual report to the City Council of the City of Rahway and the public describing the properties being held by it as a land bank entity and the activities that it carried out during the year as a land bank entity.

§ 82-7 Authorization to borrow funds.

To the extent that the statute under which a redevelopment entity was established, Section 4 of P.L. 1992, c. 79 (N.J.S.A. 40A:12A-4), confers on that entity the power to borrow funds and incur debt, the redevelopment entity may exercise those powers in furtherance of its land banking obligations subject to the conditions and limitations set forth in Section 4 of P.L. 1992, c. 79 (N.J.S.A. 40A:12A-4) or P.L. 1960, c. 183 (N.J.S.A. 40:37A-44 et seq.).

To the extent that the statute under which the redevelopment entity was established, Section 4 of P.L. 1992, c. 79 (N.J.S.A. 40A:12A-4), provides that the City may guarantee its debt or other borrowing, the City may also guarantee its debt or other borrowing under the same terms and conditions, in furtherance of the entity's obligations as a land bank entity.

The guaranteeing of debt and borrowing of funds permitted under Subsections A and B of this section shall only be permitted so long as the land banking agreement itself also explicitly permits these actions.

The City may, by ordinance, terminate the land banking agreement at any time, with or without cause, by providing the land bank entity with one year's notice of termination from the date of the adoption of that ordinance subject to:

Termination of the land banking agreement under Subsection A, shall not affect the status of any transaction properly entered into by the land bank entity prior to termination.

Within 90 days following the date of termination, the land bank entity shall convey and transfer to the City, possession of all land bank property without consideration; provided, however, that the City of Rahway and the entity may agree to allow the entity to retain possession and control over any properties that are the subject of a pending transaction by the entity until completion of the transaction, and until the end of any lease.

With or without one year's notice to the land bank entity, the City may, by ordinance, terminate the land banking agreement upon notification of a determination from the County Prosecutor, or the Corporation Counsel, that the land bank entity, or a director or officer of the land bank entity while acting in their official role, has breached an essential duty of the land banking agreement based upon an act or omission:

In violation of the land bank entity's duty of loyalty to the City and the general welfare of the residents of the City;

Involving a knowing violation of criminal law; or