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DANVILLE — When the governments of Vermilion County and a handful of its municipalities started the Vermilion County Land Bank in 2016, the aim was to spur revitalization through redevelopment of the county’s many abandoned properties, which can quickly become a nuisance to neighbors and a drain on local governments.

In the meantime, the Illinois Housing Development Authority announced it would be using some of the state’s share of a $25 billion national settlement for homeowners harmed by fraudulent foreclosure and mortgage practices to spur creation and growth of land banks across the state.

Looking to take advantage of these new funding opportunities, officials with the Vermilion County group decided it was time to expand, voting two weeks ago to open membership and welcoming new municipalities into what is now the Central Illinois Land Bank.

Pat O’Shaughnessy of Danville, who serves as the group’s unpaid executive director, said the board made the decision after realizing that a regional land bank pools more resources and creates a larger organization more likely to win future grant dollars. The initial hope is to hire a paid executive director who can focus solely on land-bank properties in the member areas.

The Rantoul Village Board voted to join in June, and St. Joseph’s board did the same in August. The Champaign County Board is weighing its invitation, with its environment and land-use committee set to discuss the issue at its Oct. 10 meeting.

Other communities, including Decatur, have also inquired about the possibility.

Pattern of success

Land banks, which have been successful in other states, including Ohio and Michigan, and even other parts of Illinois, specifically the Chicago area, are relatively new downstate.

But with the state housing development agency awarding feasibility study grants and seed money grants to launch these programs, there’s a flurry of land-banking activity taking root.

“I feel like this program started just over a year ago, and already we have a Northern Illinois Land Bank and a Central Illinois Land Bank,” said Nicki Pecori Fioretti, director of community affairs. “To me, it’s very exciting.”

Particularly after the housing market crash a decade ago that resulted in many foreclosures across the country, land banks have been a useful quasi-government tool that can make it legally and financially easier to either eliminate or transform abandoned, vacant and tax-foreclosed properties and put them back into productive use.

The array of tools afforded land banks depend on each state’s laws, but one, for example, is clearing the title on a property by eliminating all liens and past claims so a new owner can buy it without worrying about them.

Fioretti said one of the key benefits of land banks is reducing recidivism of properties in the tax sale cycle. She said she’s seen some go through the cycle as many as seven times, deteriorating all the while.

“It doesn’t take long for a building to go south,” she said. “A land bank can come in and break that vicious downward cycle, rehab it and put a young family and a new employee in the community in that home affordably.”

Fioretti said it’s better to get to a property early, especially in communities where the housing stock has great architecture.

“Demolition is never our first choice, so the land bank can help us get in there earlier and not have to demolish,” she said. “Breaking that tax cycle is the real beauty of this.”

Fioretti said for every dollar spent to clean up vacant properties, neighbors see $224 in increased property value and the community sees an additional $7.43 in tax revenue.

New resources

Champaign County Executive Darlene Kloeppel said municipalities and counties that find themselves owning property through the legal process lack the marketing or real-estate professionals who can focus on getting it back into the hands of responsible owners or developers.

“So a land bank is kind of a way for that to happen. They can contribute to the land bank, and that entity does have a person who does that,” she said, adding that a regional land bank it opens the door to other opportunities, like selling properties in more than one community to one party, instead of each municipality trying to strike its own deal.

“So it’s that sort of thing, a different way of trying to get the properties back into the private market,” Kloeppel said.

St. Joseph Mayor Tammy Fruhling-Voges said her village doesn’t necessarily have any specific properties in mind yet, but since it is not a home-rule village, there are things it cannot do when dealing with an abandoned or foreclosed property that a land bank could.

“It allows us to work with bigger communities to give us a better handle on what we can and can’t do, and professional help,” she said.

If the village winds up with an abandoned property or one with tax liens, for example, the land bank could help guide it through the procedures to get that property back on the tax rolls, Fruhling-Voges said, adding that it would be helpful just having an entity tracking such properties.

Fioretti said land banks are economic development tools that can help redevelop commercial property as well as single- and multi-family housing stock, which helps stabilize property values, especially in areas where those values are trending negatively.

“It’s about getting in there and stopping those downward spirals and creating upward spirals,” she said.


Tracy Crane is a Danville-based reporter for The News-Gazette. Her email is