City Takes Legal Step In "Zombie" Property Fight

September 28, 2017 Niagara Gazette - By Phillip Gambini

OFFICIALS: Citizens Bank served with court summons as part of effort to reclaim deteriorating properties in Niagara Falls.

City officials have filed what they say is among the first regional legal claims under a new state law meant to arm governments against the spread of urban blight.

Citizens Bank, which earlier this year was subject to a public shaming campaign led by the Niagara Falls Department of Community Development, was served on Tuesday with a summons to the Niagara County division of state Supreme Court at its offices in Rhode Island and Virginia.

The legal claim is in relation to five Cataract City properties, including: 502 77th St., 8220 Frontier Ave., 8414 Lindbergh Ave., 2444 LaSalle Ave., and 763 16th St.

According to the department’s filing, the houses were inspected and deemed “abandoned” or “vacant” - either left behind by previous owners or otherwise in limbo - waiting for the bank to initiate or complete foreclosure proceedings. 

Community Development Director Seth Piccirillo called the structures “unacceptable in Niagara Falls neighborhoods.” 

“The Citizens Bank legal complaint is tangible proof of our level of seriousness on zombie properties,” he said.

All of properties named in the filing were publicly identified this summer when the community development department posted signs on the lawns of the homes that read: “How Did This Zombie Get Here? We’re Looking At You, Citizens Bank!”

Under new state legislation, formally known as the 2016 Zombie Property and Foreclosure Prevention Act, the city will have a legal course in an attempt to compel upkeep and collect fines for what the law classifies as “property neglect.”

The signs were placed on July 10 in conjunction with a seven-day notice sent to the bank asking it to join the city in an effort to expedite the foreclosure process. In addition, the notices demanded the vacant properties be brought in compliance with state law and state property maintenance code.

According to the department, “exterior code violations” were identified earlier this summer at all five properties in a review conducted by team members of the Zombie Project Initiative, an endeavor led by coordinator Christine Marino. 

The court filing states that the bank has “failed to inspect, maintain or secure the properties sufficiently.” From the time of the July notice to date, 79 days have passed, including weekends. Under the law, that would amount to nearly $39,000 in potential fines. 

The tab will continue to grow until a final order on the matter is submitted to state Supreme Court, though the presiding judge in the case could exercise discretion over the sum of the fine.

Marino previously said the department’s intention was to work with the banks in an attempt to address the zombie homes, but those attempts have not proved fruitful.

“The minimal response we have received from Citizens Bank was not solution focused,” she said. 

“We stated in our initial letter to Citizens Bank that, per the law, if the properties are not brought to code, it is our responsibility to the community to take legal action, and that is what we are doing, on behalf of our residents,” Marino said.

Marino’s initiative and position are funded through a $250,000, three-year grant from the state Attorney General’s Office, a portion of a $12.6 million cash pot set aside from settlements obtained by the state in the wake of the 2008 financial crisis. 

A spokesman for Citizens Bank, Rory Sheehan, said the bank declined to comment on the matter “due to pending litigation.”

The five homes named in the lawsuit represent a small slice of at least 120 zombie homes cataloged thus far by the department.

The city has a pair of other recently acquired tools aimed at stemming blight, including:

• A land bank organization it signed on to earlier this year, which will allow the city to purchase and orchestrate rehabilitation of zombie homes and other vacant properties with a trio of Niagara County’s most populated municipalities. It is also funded with competitive grants through the state AG’s office and

• Ongoing reforms to its annual foreclosed property auction to stop predatory landlords from cyclically purchasing neglected city homes.

Together the aim is, not only to slow the dilapidation in city neighborhoods, but also to find a way to offer them up for sale, thereby increasing property values and the potential for private homeownership in the Falls, officials said.