First Sheriff’s Sale Since Formation Of Land Bank Sells Six Lots Out Of 22

By Gordon HopkinsSix lots out of 22 were sold to bidders at a sheriff’s sale in Jefferson County the morning of Monday, August 12, 2024. The remaining 16 lots will become property of the newly created South Jefferson Land Bank. This was the first sheriff’s sale to be held since the formation of the land bank.None of the properties offered for sale had buildings. All were empty lots.A sheriff’s sale is a public auction at which property that has been repossessed is sold by court order in order to compensate unpaid creditors. In this case, the properties were offered for sale due to unpaid taxes. There is a 30-day stay on properties sold at sheriff’s sales in which the original owner can come back and pay in full and then retain said property.According to the rules of the land bank, if no bid was received or the bid was less than the taxes due, the property reverts to the land bank. The unpaid taxes are then forgiven and no taxes are accrued while the property is in the possession of the land bank. A land bank is an entity created by a municipality which generally allows for the acquisition, maintenance, development and disposition of real property for the purpose of returning it to productive use. The Nebraska Municipal Land Bank Act, Neb. Rev. Stat. §§ 18-3401 et seq. (Act), was first passed in 2013, applicable primarily to Omaha and Lincoln, and subsequently amended in 2020, expanding application to the remaining classes of municipalities. The League of Nebraska Municipalities (LONM) has created resources for setting up land banks, including templates for formation and organization, which are provided with this memorandum for reference. Fairbury City Councilperson Brad Kuzelka has been vehemently opposed to the land bank from the time it was first proposed. He posted on Facebook shortly before the sheriff’s sale, “It will be as I said it would be. The land bank will be using your tax dollars to bid against you at the upcoming sheriff’s auction.”The land bank does not actually bid on the properties at sheriff’s sales. However, bidders were required to bid at least the amount due in taxes. If there was no bid equal to the back taxes due, then according to the Sheriff’s Sale Announcement, “then such land bank shall be deemed to have bid the total amount of taxes, interest and costs due theron and such bid shall be accepted by the sheriff.”Kuzelka told FJN after the sale, “The land bank had the initial bid. They just plain outbid a lot of people. Historically these lots will sell for much less.” Once the land bank acquires a property, it can then sell or give the property to another for development.At a recent meeting of the South Jefferson Land Bank committee, it was noted that some people interested in properties are opting not to bid at the sheriff’s sale at all but instead wait for the property to be transferred to the land bank, so that they can acquire the lots without the burden of paying the back taxes. President Jaime McDaniel said, “I have only had one person approach me, a contractor with somebody that wants to potentially build on one of the properties, but they’re not interested at the price that’s listed there below. So, they’re hoping that it goes through to share yourself to us.”Likewise, Laura Bedlan, Development Services Director for the City of Fairbury, noted, “I have also had two properties come to my attention, or been brought to my attention, that people are interested in the land bank getting so that they can potentially be transferred to them as well.”

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