West Virginia Secures the Future of Land Reuse Agencies with SB 538

A Permanent Right of First Refusal for Land Reuse Agencies 

An important milestone for West Virginia’s land reuse agencies is now on the horizon after the recent signing of Senate Bill 538 by West Virginia Gov. Patrick Morrisey. This bill ensures that land reuse agencies and municipal land banks maintain their right of first refusal—an essential tool for revitalizing tax-delinquent properties that are vacant, abandoned, or dilapidated. By making this right permanent, the legislation paves the way for more strategic economic and community development. 

SB 538 was championed by legislators from the NRGRDA region, Sen. Brian Helton (Fayette) and Del. Bill Roop (Raleigh), in collaboration with the NRGRDA team. Their efforts are also helping to advance local conversations about the role of land banks in supporting strategic economic and community development.

Why the Right of First Refusal Matters 

Legislators first approved the right of first refusal for land reuse agencies in 2017, recognizing its importance in addressing vacant and blighted properties. This tool allows land reuse agencies to acquire these properties before they go to public auction, ensuring strategic redevelopment rather than speculative ownership. This approach helps communities transform neglected spaces into housing, commercial enterprises, or community assets. 

Jina Belcher, Executive Director of the New River Gorge Regional Development Authority (NRGRDA) and Chair of the Fayette County Land Reuse Agency, emphasized the importance of targeted property selection: 

“We’re very strategic in which ones we select because we want them to be put back into productive reuse and be taxable again.” 

With the sunset clause on this right set to expire on July 1, 2025, SB 538 ensures that land reuse agencies can continue their vital work without interruption. Additionally, the bill includes measures to prevent bad actors—those with a history of tax delinquency—from acquiring properties, ensuring that redevelopment remains a priority. 

Criteria for Land Reuse Agencies to Execute Right of First Refusal 

To ensure that Land Reuse Agencies focus on the worst of the worst properties, the right of first refusal can only be used on properties that meet at least one of the following criteria: 

• Have an assessed value of $50,000 or less. 

• Have been condemned. 

• Have municipal liens on the property that exceed the amount of back taxes owed. 

• Have been on a vacant property registry for 24 consecutive months or longer. 

• Were sold at a tax sale within the previous three years, were not redeemed, and no deed was secured by the lien purchaser. 

Strengthening Economic Development in West Virginia 

In regions like southern West Virginia, where available properties for development are scarce, land reuse agencies serve as key partners in economic growth. By acquiring and repurposing properties, these agencies contribute to job creation and revitalization efforts. According to Belcher, land reuse agencies collaborate with economic development authorities to ensure properties are put to productive use. 

Since its establishment in 2023, the Fayette County Land Reuse Agency has exercised the right of first refusal twice in addition to acquiring properties through other avenues. Once acquired, NRGRDA assists in determining the best redevelopment strategy, which typically falls into three categories: 

1. Housing Development: Removing dilapidated structures and marketing properties for new residential projects. 
2. Industrial/Commercial Development: Consolidating adjacent properties to attract businesses and create jobs. 
3. Community Spaces: Converting vacant lots into parks or other public assets. 

SB 538: Key Provisions and Protections 

Beyond eliminating the sunset clause, SB 538 introduces new safeguards: 

• Preventing Speculators & Bad Actors: Land reuse agencies have the authority to refuse to sell acquired properties to adjacent property owners if they or an entity they own have outstanding state or local taxes or unpaid municipal fees. The bill also ensures that individuals or entities with a history of noncompliance, tax delinquency, or previous unpaid auction purchases cannot gain access to properties. 

• Annual Reporting Requirement: The West Virginia Land Stewardship Corporation must submit an annual report on land reuse agency activities to the Joint Committee on Government and Finance. 

A Proven Strategy for Community Reinvestment 

Since its inception, the right of first refusal has played a significant role in West Virginia’s redevelopment efforts. Out of the state’s 16 land reuse agencies at least a dozen have utilized this tool to acquire and repurpose over 300 neglected properties. Of these, 160 have already been returned to productive use. 

Jim Reed, Executive Director of the Nitro Land Reuse Authority, reinforced the importance of this right: 

“The right of first refusal is critical for land banks to succeed.” 

Legislators initially questioned why land reuse agencies should bypass public auctions, but Reed highlighted a key issue: out-of-state speculators often purchase properties sight unseen and leave them abandoned, perpetuating the cycle of vacancy and neglect. By contrast, land reuse agencies ensure these properties are revitalized and reintegrated into the local economy. 

Looking Ahead: A Brighter Future for West Virginia Communities 

SB 538 represents a significant step toward addressing West Virginia’s vacant and blighted properties. By securing a permanent right of first refusal, the state empowers land reuse agencies to continue their mission of revitalizing communities, fostering economic growth, and ensuring responsible property development. With this legislation, local governments gain the tools needed to take a proactive, strategic approach in reclaiming their communities—one property at a time. 

With the passage of SB 538, West Virginians can look forward to a future where neglected properties are transformed into thriving spaces that benefit both residents and businesses alike.