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1400 Regular Council Meeting September 26, 2011 Page 6 Mr. Bolster said he and the City Attorney had discussed ways to re- market these properties. Mr. Bolster said he thought the way to do this was to do an abatement, similar to those granted to industries. Mr. Bolster said he initially told Mr. Mcllyar that abatements could not be done on residential property. Mr. Bolster said he had done additional research earlier that day, and that they could do abatements on residential property. Mr. Bolster said that a reinvestment zone would need to be created and that it could only apply to residences that qualify for assistance under the Federal Housing Community Development Act. He said he thought it was basically low and middle income distressed neighborhoods. Mr. Bolster said that he read the Act and that it was difficult to figure out the qualifications. He said basically if you could qualify for some type of Federal assistance in re- developing a neighborhood, then you could call that neighborhood a residential reinvestment zone and then that means property owners qualify for abatements. Mr. Bolster stated an Ordinance could be drafted designating the re- investment zone, but that he thought that the City would have to actually execute an abatement with each and every individual owner that comes forward, which would be a lot of paperwork. Mr. Bolster said the abatement works great for someone who purchases a lot and wants to build a new house. He questioned what happens to an existing house that is old that is in need of repair. He said there was no limitation in the Tax Code of what could be considered historical, and that it was up to the City Council to determine what was historical and what was not historical. Mr. Bolster said he thought that the City could use the historical exemption in the Tax Code to address property that was purchased and was going to be refurbished. In summary, he said there were two ways to handle these items. Mr. Bolster said they could sell the vacant lots to developers and go with an abatement type of Ordinance. He also said for people who purchase abandoned property and planned to do a thorough re- furbish of the property, that he thought that the City could use the historical exemption in the Tax Code. Mr. Bolster said every City faced the problem of how to re- develop their distressed neighborhoods and how to get property back on the tax rolls. Mr. Bolster said they would work closely with the City to do this, but that it would be a continuing struggle. Mr. Bolster welcomed questions from City Council. Council Member Pickle said he believed in this and would like to pursue this. Council Member Wright said they needed to come up with a set of ground rules. Mr. Bolster said the maximum for an abatement was ten years and that it was not an all or nothing proposition. He said on any abatement the City would still have to tax the individual for the value of the property. He said that the City could not tell individuals they did not have to pay taxes for three years, because they would be required to pay taxes on the lot value. With regard to dilapidated structures, Mr. Bolster said the individual would be required to pay the value of the dilapidated structure for three years and after expiration of that term, the individual would be required to pay taxes on the real value of the refurbished structure. Council Member Grossnickle asked about the properties located close to the Rails to Trails and said they were trying to develop safe sidewalk areas within the City. Council Member Grossnickle inquired about lots that were struck off could be used for creating safe routes to school, if the property was in the proximity of the Rails to Trails. Mr. Bolster said that the entities had been very good about working together for betterment of the community. Mr. Bolster said if the City had a lot they wanted to use for charitable purposes, to point it out to him and he would do the paperwork to be submitted for approval by all of the taxing entities. It was a consensus of the City Council that Mr. Mcllyar and Mr. Anderson study these items and bring them back to the City Council.