Norfolk plan to resell vacant lots is bogged down in red tape

NORFOLK

In 2004, city leaders began seizing hundreds of vacant lots across the city, saying they wanted to control redevelopment and get the lots back on the tax rolls.

They called the effort the GEM program – not an acronym, but rather a description of the jewels the city hoped to create.

The idea was to combine adjacent lots and make them available for development, or sell narrow and odd-shaped ones to neighbors who wanted to expand their yards.

But four years later, the housing boom has come and gone, and the GEM program is adrift, mired in bureaucratic inefficiency and political concerns.

Norfolk hasn’t sold a single property in the past two years, despite a list of willing buyers. The city also has been stuck with maintaining more than 450 parcels, none of which creates tax revenue. About a quarter of Norfolk’s city-owned property is in the GEM program.

A growing number of angry developers and residents eager to purchase properties complain that the city has dragged its feet.

“It’s frustrating,” said city teacher Lanier Lebby, who in March applied to purchase a vacant lot next to her Chesterfield Heights home. She hasn’t heard from the city since.

“I wanted to increase my property, have a garden, and maybe someday increase the size of the house,” she said. “You want to do something with the property – you don’t want it just sitting there collecting trash.”

Forty-three lots have been recommended for sale, but most have sat for longer than a year awaiting the City Council’s approval.

City officials say they’re still working out details of the program.

“It’s a busy world, and quite frankly, I haven’t had the time,” Assistant City Manager Stanley Stein said last week. “I’m deeply sorry there are people out there waiting. But I have to do my due diligence.”

Stein said the city needs to make sure that the program’s land sales are fair to surrounding property owners and that civic leagues approve of applicants’ plans.

Stein promised action this summer in a string of e-mails sent to developers and obtained by The Virginian-Pilot through the Freedom of Information Act. “You are at the top of the 'food chain,’” he told one developer .

“My goal is to get the GEM lots moving and stop endless processing,” he told Norfolk Redevelopment and Housing Authority officials last November.

“I think I am getting it all ready to move forward,” he wrote in July.

Bill Osborne, a real estate agent and developer who applied a year ago to buy property in Campostella, said city leaders have no intentions of moving forward with the program.

“They keep shifting the goal line,” he said. “There’s somewhere in there where it’s purposely being done.”

When it began, officials in the city manager’s office said the primary objective of the GEM program was to “get properties back on the tax rolls.”

Norfolk seized 457 parcels worth less than $50,000 that had liens or back taxes totalling at least half of their assessed values. In some cases, the properties were small slivers of land. In others, they were lots too narrow to build on.

The city’s Neighborhood Design Center, which oversees the program, determined that 351 of the properties could be sold. The others would remain in city hands as green space or wetlands. The original timeline called for most of the parcels to be sold by 2008.

Norfolk sold five properties right away, lots that were used to build two new houses and a Habitat for Humanity home.

Since then, staffers in the design center have examined more than 50 applications and have recommended that the City Council approve most of them. Planning Director Frank Duke said the office plans to review a dozen more applications before the end of the year.

“A lot of these properties, especially the side yards, they really have no value except for the people right next to them,” said Acquanetta Ellis, who oversees the center. “And from a broader community perspective, we get rid of a blighted property that wasn’t adding anything to the neighborhood.”

Inside City Hall, there’s a different sentiment about the program’s purpose. Some say the hang-up is the city’s aversion to allowing houses to be built on lots less than 37 feet wide. But none of the applications calls for building on such parcels.

Stein and Vice Mayor Anthony Burfoot described the GEM program recently as a “land bank” effort to accumulate properties and hold on to them in anticipation of larger development years later.

Burfoot used the example of Douglas Park, where the city has long-term plans to create an office park. Selling GEM lots – 41 are in that neighborhood – to private owners would only increase values and make it harder to complete the project, he said.

“The goal when we started acquiring these properties was to take a step back and take a look at what was in inventory, and where we were,” he said. “The goal was not to sell them. The goal was to create a plan.

“It doesn’t matter how long we take as long as we get it right.”

But efforts to hoard certain properties have carried over to all the parcels within the GEM program. That’s left some politicians balking at City Hall’s prevailing desire to do nothing.

“If people want to buy properties to add to their lot sizes, that’s the sort of thing we should be doing,” Mayor Paul Fraim said Friday. “One way to grow the tax base is to put more of the tax-exempt properties back on the tax rolls. We should be very vigorous about that.”

Potential buyers are also frustrated and confused.

Osborne came to Norfolk a year ago with plans to combine two small vacant lots – one privately owned, one a GEM lot – and build a new house on a street in Campostella.

The city told him he needed to purchase the privately owned lot before moving forward, so he did, spending $16,000. He paid to have site plans drawn up and lined up a buyer for the home. He went through the city’s design review process – a requirement of the GEM program that makes sure houses are built to standards.

The program’s board recommended approval of his plans in March.

But so far, nothing has happened. The buyer for the home he wanted to build has moved elsewhere, and Osborne said he’s now stuck with half a property too small to build on.

“They handcuffed us and threw us in the water,” he said.

“I could do a lot to help the city put things back on the tax rolls, but they won’t budge.”

His story isn’t unique.

The city’s Redevelopment and Housing Authority has asked for more than two years to buy lots in Park Place that, when combined with other properties the agency owns, could be used to build about a dozen new homes. NRHA’s project alone would add roughly $25,000 to city real estate tax revenues each year.

But the agency’s request has sat waiting for council approval for 14 months.

Stein said last week that NRHA’s request will be reviewed by the council later this month. He declined to provide a timeline for the other requests.

Janice Long and her husband, Kirk, have waited since September 2007 for approval to buy a small side lot next to their Marshall Avenue house. They’d like to build a garage there, Janice Long said.

“Whatever additions we were going to make, it was going to help the neighborhood, not hurt it,” she said.

“We’re trying to help the city make some money. We’ve done the applications, we’ve met with the design center, but we’ve never heard anything.”

City officials said one of the hang-ups is determining how much buyers should pay for the properties.

Other cities sell vacant properties for as little as $1 in order to spark redevelopment and collect taxes. Wilmington, Del., has won national awards for a program that took more than 160 properties off city books as long as residents came up with a plan for reuse.

Duke and his staff recommended in a memo in April that the city manager’s office sell the lots for half of their assessed value, saying that many residents couldn’t afford to pay $10,000 or more for an unusable side yard.

Other benefits – such as putting the property on the tax rolls, and getting it off city maintenance schedules – would prove more important in the long run, Ellis said.

The manager’s office hasn’t responded to Duke’s memo.

NRHA officials said that, despite the delays, they remain confident that the city eventually will disburse the properties. They’ve described the GEM lots in Park Place as a “linchpin” for redevelopment along 27th Street.

“I think we will eventually get the lots,” said Steve Morales, the authority’s development operations manager. “But we had that hope last year, too.”

 Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com