City considering legislation for derelict properties

Published 10:40 am Wednesday, November 15, 2017

Franklin’s City Council is considering adopting legislation that would both incentivize and compel owners of properties deemed derelict to repair or demolish them. The matter was discussed during a work session held one hour before the council’s regular scheduled meeting on Monday.

The draft ordinance defines “derelict” to mean a residential or non-residential building or structure, whether or not construction has been completed, which might endanger the public’s health, safety or welfare and, for a continuous period in excess of six months, has been vacant, boarded up in accordance with the building code and not lawfully connected to electric service from a utility service provider or not lawfully connected to any required water or sewer service from a utility service provider. Should the city deem a building to be derelict, the proposed ordinance would require the city to notify the owner and require the owner to submit to the city a plan, within 90 days of notice, to demolish or renovate the building to address the items that endanger the public’s health, safety or welfare.

Donald Goodwin, the city’s director of community development, explained that the classification of “derelict” would be different from that of an “unsafe structure,” for which the city already has legislation in place. An unsafe structure, he said, is one that is in imminent danger of collapse, while a derelict building could be an eyesore or unsuitable for habitation but not in danger of falling down. Statutory authority for a locality to require removal or repair of buildings deemed derelict is granted in Virginia Code 15.2-907.1.

Should the city not receive the owner’s plan within the 90-day time frame, the proposed ordinance permits the city to use city personnel and funds to correct the problem, either by razing or renovating the structure, and then charging the cost of doing so to the owner in the form of a tax lien on the property. However, Goodwin said it was highly unlikely that the city would use its own personnel and funds to renovate a derelict building rather than raze it.

The proposed ordinance also incentivizes property owners to voluntarily request that the city deem their vacant properties as derelict. Those who do so and plan to demolish a derelict structure will have their demolition permits expedited, and refunded if the demolition is completed within 90 days of the permit issuance. Those who plan to renovate a building deemed derelict will also qualify to have their building permit, site plan or subdivision application expedited, and may qualify for a full or partial refund of the associated fees. The ordinance also caps any permit, site plan or subdivision fees at 50 percent of the standard fees established for building permits, site plans or subdivision applications for the proposed use of the property or $5,000 per property.

Additionally, real estate taxes on the amount equal to the cost of demolition or the amount equal to the increase in fair market value of renovations shall be abated for at least seven years in accordance with Virginia Code Section 15.2-907.1 (8), and would be transferrable with the sale of the property.

Goodwin gave the example of the recently-renovated Main Event building on Main Street to explain how the tax abatement would work.

“He [the owner of Main Event] could have talked with the commissioner of revenue before he touched it, determined what was its assessed value, done the entire renovation, then have the assessor come back and do a new assessment based on the new renovation and then gotten a tax credit based on the new value, spread over seven years,” Goodwin said.

However, the tax abatement process may not be available for any property that is either a registered Virginia landmark or is determined by the Virginia Department of Historic Resources to contribute to the significance of a registered historic district.