News Story

Questions Raised About Land Bank Conflict of Interest

Government land bank blocks private bidders, is now being sold by bank advisory council member's company

A property the Kent County Land Bank blocked from sale to private bidders is now listed for sale — by a company owned by one of the land bank's advisory council members.

5076 Montauk (click for picture), would have been available for bid at Kent County's tax auction this summer, but the land bank coordinated with county officials to block the property from sale. According to staff comments, the land bank requested the property be held because, "Revenue from this project will go a long way to help fund the Land Bank."

Just four months after the land bank acquired the property, 5076 Montauk is now listed by Greenridge Realty, a company headed by Tom Paarlberg, who sits on the land bank's advisory council. The asking price is listed at $169,900.

Paarlberg did not respond to requests for comment about whether the listing was a conflict of interest. 

"This points to our original concerns when you have a government entity involved in the real estate enterprise," said Eric Larson, spokesperson for the Kent County Taxpayers Alliance, a vocal critic of the land bank. "People will have to use connections and special favors with government bureaucrats to gain an edge. This is a perfect example of the cronyism that Kent County is at risk of with the land bank's activities." 

Land bank meeting minutes indicate that Paarlberg sat on a committee that chose which real estate companies would represent the land bank, and Kent County Board of Commissioners meeting minutes indicate that Paarlberg spoke in support of the move to block 5076 Montauk and other properties from tax auction.

Realtor Rusty Richter said that "it certainly appears that Greenridge Realty has a conflict of interest — and Tom Paarlberg in particular — because of his standing in three different groups. One, he is an advisory board member of the Kent County Land Bank Authority. Two, he was on the selection committee to choose realtors to represent the land bank. And three, he's the president of the Grand Rapids Association of Realtors."

Area realtors and developers (including Richter) recently filed a lawsuit against the Kent County Land Bank for blocking properties from tax sale. In the suit, the plaintiffs argue the land bank's actions violate state law that requires tax-foreclosed property to be put up for tax auction before being taken by a land bank.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.