City to be strategic in selling property

This property on Lee Street has been vacant since the City acquired it in 2009. Its sale is pending.

New formal guidelines seek best uses for vacant buildings, land 

COVINGTON, Ky. - At last count, the City of Covington owns over 150 parcels of property.
They’re of different sizes. They’re spread throughout almost 20 neighborhoods. Their original uses ranged from single-family residential to multi-use commercial. And their current appearance runs the gamut from vacant lot to rundown eyesore to hillside to decent fixer-upper to a sliver of land too tiny to do anything with.
But they all have one thing in common:
They are not contributing to either the public good or to tax coffers. In fact, most of them create negative return to citizens in the use of tax dollars for upkeep and safety.
That needs to change, City leaders say.
“These properties should be working for the citizens of Covington,” City Manager David Johnston said.
Since the reorganization of City Hall last year and the creation of the Neighborhood Services Department, the City has put a higher priority on returning vacant and abandoned property to use.
Over the last year, the City has sold or is preparing to sell a number of properties to different people for different purposes and using a variety of methods. Using what they’ve learned, officials are developing formal guidelines to govern the sale and/or transfer of City-owned buildings and properties to the private and non-profit sector. Those guidelines will be presented to the Covington City Commission at its caucus meeting tonight.
The goal is to create a process that’s methodical, strategic, and legal, Neighborhood Services Director Ken Smith said.
“The ultimate goal is to get these properties back into productive use - highest and best use for that property, which of course depends on its location and surroundings,” Smith said. “These are public assets, and we want to dispose of them in a manner that both benefits the City and complies with state law.”
The City is writing formal guidelines that require Commission approval because it wants to create a level playing field for all would-be buyers as well as an effective way for the City to be proactive, where appropriate, to seek interested buyers for identified properties or groupings of properties.
But people should not misinterpret the City’s intentions, Smith said. 

“This is not a fire sale,” he said. “We are not getting rid of properties and vacant buildings for the sake of getting rid of them. If we wanted to do that, we could hold a public auction and get rid of this whole collection in a day. But that wouldn’t be very strategic.”
Once approved by the Commission, the guidelines will be posted on the City’s website. They create a formal application process for acquiring real estate that is based on several fundamental requirements: 
  • Following state law governing the disposal of real estate by local governments.
  • Excluding purchasers who aren’t in good standing with the City.
  • Appraisal of all property to determine fair market value.
  • A case-by-case evaluation of proposals for purchase.
  • Flexibility in the methods used for the sale of property. Depending on the property, the process might use a sealed invitation for bid, a request for development proposals, a request for qualifications, or a straightforward purchase contract. 

This commercial property on Greenup Street had been off the tax rolls for over a decade. Now it’s being rehabbed into a coffee shop and bakery.

A Real Estate Disposition Committee would assess purchase proposals and make a recommendation to the City Commission based on a number of factors, including the feasibility of rehab/redevelopment plans and their proposed public benefit, whether the plans create jobs, whether the new use for property contributes to the surrounding neighborhood, whether it expands the City’s tax base, the proposed purchase price, and the potential leverage of other investment.
“We’re not just selling to the highest bidder - we want the best-end use,” Smith said. “And we reserve the right to say ‘no.’ ”
The City gained ownership of the properties in a number of ways, including during a previous administration’s anti-blight program, Smith said. Only about 15 of the properties have structures on them. 

This lot on Philadelphia Street is in a group being recommended for sale for eventual single-family housing.

Recent transfers:
In the last year of so, the City has sold or is in the process of selling a number of properties, using a variety of processes: 
  • 1118 Lee St. - The house had been vacant since the City bought it in 2009. After the City sought development proposals, its sale is pending to CURB Development LLC for rehab into a single-family home.
  • 1136 Holman St., 1138-40 Holman St., 1129 Banklick St., and 1130 Banklick St.- After an RFP process, the City entered into a preliminary development agreement in June 2018 with The Center for Great Neighborhoods to develop these four contiguous parcels of land into a mixed-use residential and commercial project.
  • 951, 954 and 956 Philadelphia St. - After an RFP process, City staff will be recommending the sale of these vacant lots for redevelopment into single-family housing.
  • 1316 Greenup St. - The vacant, blighted commercial property had been off the tax rolls for 13 years and was sold to BHB Properties LLC in August 2018 to be developed into a coffee shop and bakery.
  • 249 Pershing Ave. - The two-story, single-family home was sold for rehab to the highest of three bids received in May 2018.
  • 1213 Wheeler St. - This residential parcel of land - which the City has owned since 2008 - was approved for sale to a neighbor for its appraised value in November 2018.
The City sold this home on Pershing Avenue last year after seeking, receiving, and evaluating bids.
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