Neighborhood developments on hold after Indianapolis Land Bank program suspended

Program on hold after grand jury indictment

INDIANAPOLIS - The redevelopment efforts in one of the city's most distressed neighborhoods are on hold following the indictments of two city employees.

Mayor Greg Ballard has ordered the immediate suspension of the Indianapolis Land Bank program.

St. Clair Place on the city's near east side showcases the potential of the Indianapolis Land Bank. Twenty-four of the 58 homes rehabbed in the neighborhood came through the Land Bank, bringing tax base, a lower crime rate and affordable housing.

"If the program isn't continued, it would be hurtful to a lot of neighborhoods," said John Hay, executive director of Indy-East Asset Development. "Properties remain abandoned. Abandoned homes continue to deteriorate."

The program came to a halt early Tuesday when the FBI seized boxes of Land Bank records. A federal grand jury indicted city employees Reggie Walton and John Hawkins for accepting bribes and kickbacks.

They're accused of arranging transfers of properties to a shadow non-profit who in turn sold them at a deep discount to for-profit groups. The city's development director admits the land bank remains on indefinite hold.

"We're going to have to find a way to move quickly, because the problem doesn't go away because we had two bad employees who made these poor choices," said Adam Thies, director of the Department of Metropolitan Development.

Sales and closings of more than 1,200 homes in the Land Bank inventory remain on indefinite hold, 12,000 homes remain vacant and abandoned city-wide, and neighborhood leaders rue even the temporary hold put on a program that builds communities.

"It makes me so angry when we get a good program that helps the neighborhoods, and helps people, and some scuzzball has to come in and try to rip money off for it," said Ruth Shaw, president of the Eastern Avenue Block Club.

It's unclear when the Land Bank program might be reinstated.

Follow Jack Rinehart on Twitter: @jackrinehart6

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