Old Detroit, New Detroit

Every week in a Wayne County Circuit courtroom in Detroit’s Coleman A. Young Municipal Building, the future of a shined-up, blight-free city is taking shape — one case at a time.

In Courtroom 701 of the Wayne County Circuit Court, Chief Judge Robert J. Colombo Jr. reserves a portion of his Friday docket to hear cases against a steady string of defendants made up exclusively of delinquent and derelict property owners. The plaintiff in every case is the newly empowered Detroit Land Bank Authority, which can take ownership of blighted property under the city’s nuisance abatement program.

In a city where absentee owners have allowed heavily damaged or deteriorating residential and commercial buildings to stand for years, the Land Bank’s recent court actions are yielding remarkable success.

Under the abatement program, the targeted owners can either sign agreements to fix up their property and ensure it is occupied within six months, or, if the defendant’s plan to remediate the property doesn’t pass muster, Colombo can assign the title over to the Land Bank.

Following a speedy review, the Land Bank moves to sell the reclaimed property at auction; if a structure is deemed not salvageable, it’s placed on the docket for demolition. The owners of historic properties are given extra time — nine months — to repair and occupy such properties.

In the two months after the program went into effect in May, the Land Bank took in more than $1 million from more than 70 sales that ranged in price from $1,000 to $97,000. The auctions averaged two sales per day; it’s a number that John Roach, chief communications officer for Detroit Mayor Mike Duggan, says will be expanded shortly. “We think with three (sales) per day we’ll easily get to 1,000 homes going on auction annually,” he says.

Block By Block: Blight removal in Detroit isn’t impossible, but it is difficult / Click Here

As of early August, the Land Bank authority had targeted 964 homes through the nuisance abatement program. Of those, 127 property owners signed agreements to clean up their properties and 31 abandoned homes were taken over by the city, while the balance is in the process of being adjudicated.

All this activity is being driven by what civic stakeholders describe as the most significant new weapon ever introduced to combat Detroit’s chronic blight. That weapon is a comprehensive survey completed earlier this year documenting every single real estate parcel — 380,000 of them — inside the city’s 139-square-mile border.

Under the survey, named Motor City Mapping, 150 paid workers used Google Nexus 7 tablets equipped with software develop-
ed by Loveland Technologies and Data Driven Detroit to catalog and take pictures of each parcel. Overall, the effort identified 84,641 blighted parcels, including vacant lots. Among those are 40,077 structures that need to be torn down, and 6,135 vacant lots that can be cleaned up.

The effort was funded by $1.3 million from JPMorgan Chase Bank, part of $100 million the bank committed earlier this year to help Detroit get back on its feet.

The data-collecting entered a second phase this summer with the introduction of a Blexting app (blight and texting) that allows residents to use smartphones to update information on blighted properties in their neighborhoods or take pictures when they spot any changes.

“The data piece of this process has really been the biggest victory out of the gate,” says Deb Dansby, vice president of Rock Ventures, an umbrella entity of Quicken Loans Inc. in downtown Detroit. “It will live with the city forever. It will be the one central repository of data for the city, long-term.”

Quicken Loans’ founder and chairman, Dan Gilbert, is joined on the newly-formed Detroit Blight Removal Task Force — a nonprofit organization designed to go out of business once the ruins of the industrial age are removed — by Glenda Price, president of the Detroit Public Schools Foundation; Linda Smith, executive director of U-Snap-Bac, a 25-year-old community nonprofit housing organization on the city’s east side; and an array of stakeholders and foundations.

In May, the task force issued a 341-page report on the status of blight in the city and estimated it would cost nearly $2 billion to clean up the entire city over the next six years. Dansby says the biggest challenge the city faced for decades was the lack of accurate data to assess blight within its borders. What’s more, past decisions were sometimes made based on data that was not accurate, she says.

“This new data has allowed us to have a lot more conversations in effective planning and effective implementations because it opens the door to truly articulate the situation,” she says. “It’s a model that can be replicated in other cities, and it’s a model that really has great potential. Residents who live in an area can update the city so, if something happens, the city has knowledge of that without five years passing by.”

Reflecting the can-do attitude of Gilbert, her boss, Dansby is optimistic that the sticker shock from the $2 billion cleanup bill is just that — sticker shock. She says there’s an ample amount of available money, and more in the pipeline, to sustain the project to its completion. “If you were to lay out a timeline, I don’t think anyone is stressed about the money side of it at this point,” she says. “I do think it’s possible. The target is 1,200 demos a month, to reach a five-year goal (for cleaning up blight.)”

Dansby admits that the biggest chunk of money that could immediately propel the task force’s recommendations over the longer term is the $368 million Detroit could realize if emergency manager Kevyn Orr’s plan for bringing the city out of bankruptcy is successful.

Orr has penciled that amount for the city into his proposed $1.4 billion post-bankruptcy restructuring and reinvestment funding. Even if Orr is successful, however, that money isn’t guaranteed, as it’s contingent on projected future cost savings and revenue for the city. Reductions in city savings and revenue will shrink the $368 million.

One of the early beneficiaries of Motor City Mapping is the Marygrove neighborhood in northwest Detroit, just south of the campus of Marygrove College at McNichols and Wyoming. The 16-block neighborhood is one of sturdy brick one- and two-story homes. Some are well-kept with tidy yards, flower beds, and mowed lawns. Others are succumbing to years of neglect.

Using the information from Motor City Mapping, the city in April posted notices on 90 vacant homes, summoning the owners to Judge Colombo’s courtroom. At that time, Duggan promised residents they would see positive action in their neighborhood within 90 days. 

In July, Duggan, Marygrove College President David J. Fike, Deputy Wayne County Treasurer David Szymanski, City Council President Brenda Jones, and Land Bank officials returned to report the progress to the residents.

Duggan said of the 90 homes that were posted, 35 homeowners responded and signed consent agreements to renovate and occupy the homes. Judge Colombo ordered ownership titles turned over to the city for 22 homes. Another 10 were deeded to the Land Bank by the Wayne County Treasurer’s office after it took possession of them for various delinquencies.

“We’re about two-thirds of the way through the 90 properties,” Duggan says. “We are going to get every single one of them addressed. My guess is we’re probably going to save 70 and demolish 20 (houses).”

Pictures and information of all of the homes in the Land Bank inventory are listed on the agency’s site. “People in this neighborhood, six months ago, would think it’s a pipe dream to demolish only 20, but we intervened early enough that I think we’re going to get 70 occupied,” Duggan says.

The mayor says one of his favorite anecdotes from the Marygrove blight offensive came from a resident who called 911 to report a scrapper on a ladder at a blighted home, pulling on a gutter. “When the police cars arrived, the guy said, ‘I’m a contractor, not a scrapper,’ ” Duggan chuckles. “The lady who called said, ‘I’m sorry, but it’s been so long since anybody in this neighborhood did any work on their house, I thought you had to be a scrapper.’ ”

The rehabilitation of the Marygrove neighborhood is receiving the kind of boost from the business community that the mayor and the blight task force said is a critical part of retaking the city. For example, Troy-based Talmer Bank and Trust, the third largest bank in the state, has embraced the neighborhood.

David T. Provost, the bank’s CEO, and Gary Torgow, chairman of  Talmer Bancorp Inc., the bank’s holding company, are so enthusiastic about the Land Bank’s efforts they’re putting up $1 million to help pay for the renovation of homes bought through the Land Bank-sponsored auctions.

“The program is very simple. Once you buy the house, we’ll lend you $25,000 interest-free, and for every year you live in the house we’ll forgive $5,000 — so it becomes a forgivable loan,” Provost says. “We want you to live in the house; this isn’t for flippers.”
Provost says the bank was comfortable in joining the cleanup effort because of the confidence he gained from reading the recommendations and portions of the Detroit Blight Removal Task Force’s report.

“You’ve got to have a plan,” he says.” I appreciate all the work people did to get that plan together, and now we have a blueprint. You can’t build a skyscraper unless you have the foundation. We worked with the mayor and picked this neighborhood because it was right on the cusp — there were a lot of nice houses that were vacant, and it was a great opportunity to help a neighborhood.”

When the first eight Marygrove homes went on the Land Bank’s auction in July, Provost toured each of them. “They’re nice core houses that can be fixed up and, for the right family, it would be a great opportunity,” he adds.

The banker in Provost also found it a good opportunity to do a little business. “I’m getting to meet the neighbors and we’re starting to do regular mortgages for people who live there, and that’s fun. There was one lady there who had a mortgage that was at (an) 18 percent (interest rate). We were able to get her a mortgage with a 4-percent interest rate, and that saved her hundreds of dollars a month and thousands of dollars a year.”

The plan is to move the program from neighborhood to neighborhood. “The week after we filed (lawsuits) in Marygrove, we went and filed in East Indian Village,” Duggan says. “The week after that we went to the Bagley neighborhood, north of McNichols, then we went to the Old Redford neighborhood behind where the new Meijer just started.

“Every week now, our Land Bank team targets another neighborhood, and this process is going to repeat itself over and over. So by sometime this winter, you’re going to be able to drive through a lot of different neighborhoods and see the transformation.”

Other lending institutions are joining in. Liberty Bank and Towne Mortgage Co. are offering rehab mortgage assistance for those who occupy the homes they purchase from the Land Bank, and First Merit Bank’s rehab program for homebuyers is open to Wayne County residents.

While the Land Bank continues to add housing stock weekly, it has run into at least one serious challenge city officials may not have anticipated. The Detroit News reported in late July that of the 8,600 houses the Land Bank owns, 1,800 of them are occupied by squatters — many of whom, including one driving a BMW and possessing several other pricey imports — are resisting eviction.

Other obstacles can be seen in the backstories of two buildings — one a notoriously blighted four-story ruin in the heart of downtown on Bagley Street, near Washington Boulevard, the other a graceful nine-unit apartment building in Midtown.

The apartment building is owned by a husband-and-wife team who poured more than $300,000 of their savings into it, restored the building, and completely renovated four of the units before financing dried up with the 2008 recession.

Because it’s an apartment building and not a single-family home, the city issued building permits to the contractor, not the owners. The initial permit cost nearly $10,000, as the couple had to pay for new architectural drawings of the building because none could be located at city hall.

Now, to complete the renovations with a new contractor, the owners have to pay nearly half as much for new permits to be issued to the second contractor.

“My problem is because I didn’t do the entire building back then, those permits are only good for one year, so I’ll have to go back and pay for new permits to do the other side of the building,” says the husband, who asked not to be identified because he fears retaliation from city inspectors with whom he has had differences.

“We took an old building, almost 100 years old when we got it, we gutted it, there’s new electrical wiring, new plumbing, new fixtures, and central air conditioning,” he says. “We’re attracting a better clientele, people who can actually pay money and spend money in the downtown area. You would think we would get a medal for this, and not be harassed.”

In a gesture the mayor and the blight task force would appreciate, the building owner also bought a nearby abandoned building to demolish it, fearing it would affect his investment.

“The city is actually holding money from the previous owners to tear it down,” the man says. “But before I can tear it down, I’ve got to have a $1,000 permit from the city and I have to have an asbestos review done to make sure there are no contaminants. I have to pay about $1,800 for two permits to certify the gas and water are turned off. Then I have to hire a certified demolition company to take the building down. The idea that you have to go through these headaches to knock down an old building you want to get rid of — and they want you to get rid of —  just pisses me off.”

As for the four-story building on Bagley, it’s one of the city’s most notorious symbols of blight, in far worse condition than the celebrated pinup of ruin, the Michigan Central Station in Corktown.

The decapitated building at 139 Bagley, adjacent to Grand Circus Park, stands forlornly on the west side of a site cleared nearly 10 years ago for development. The larger parcel was the site of the Statler Hotel, one of the city’s most famous hotels from the Roaring ’20s. The Bagley building was damaged by a fire that started in its roof, while the hotel was razed in 2005.

Over the years, fans streaming to Comerica Park or Ford Field have gawked at it. The elevated People Mover train runs by it, giving passengers a bird’s-eye view of at least one tree and some scraggly bushes growing out of what’s left of the roof, most of which collapsed years ago down to the second floor.

The windows are blown out and graffiti covers the crumbling four-story-high brick wall on its north side. The ground floor front door is sealed, and a metal fence hugs the building.

The city sued the owner in Wayne Circuit Court, asking Judge Colombo to rule it a dangerous nuisance that must be demolished. Ironically, the building’s owner, businessman Tony Pieroni, is a longtime downtown real estate survivor who stuck with the city during the most challenging times. In addition to the dilapidated structure, he owns the 13-story Michigan Building on the other side of Bagley, a Beaux-Arts structure built in 1925 that originally included a 4,000-seat theater. Since converted into a parking garage, the spectacularly painted, vaulted theater ceilings have attracted major movie producers from around the country.

To hear the city’s lawyer, Charles Raimi’s, side of the story, Pieroni is a greedy opportunist who’s blocking a $40 million apartment development planned for the former hotel site by Village Green in Farmington Hills, which owns the neighboring Detroit City Apartments (formerly Trolley Plaza). Raimi came to court armed with photographs showing the devastated condition of the building that he said posed a direct threat to the public.

Raimi told Judge Colombo that Pieroni rejected the developer’s offer of $1 million for the building, plus paying the cost to tear it down. He said Pieroni is asking for $4 million — a price Raimi said was 10 times more than the assessed value.

The city lawyer added that after a fire started during the demolition of the Statler, an insurance company paid off the rest of the building’s lease through 2015, and Pieroni pocketed $1.5 million the insurance company paid to repair the building.

“There’s no constitutional right to blight,” Raimi told the judge.

Michael R. Wernette, a lawyer for Pieroni, told Judge Colombo that private experts who examined the building recently, without going inside, said it was in no danger of falling down in the next three to five years. No one has ever been hurt from bricks falling off it, he said. “By the grace of God,” the judge responded.     

Wernette said the city was trying to take his property and hand it over to a developer who didn’t want to meet Pieroni’s price for the building.

“Why is it that a building sits for nine years and nothing is done to develop it or take it down?” the judge asked Wernette.

Wernette says his client is ready now to renovate and develop the building. He also reminded the judge that there are numerous similar buildings across the city and state.

“Everybody else doing it is not a legal defense,” the judge said — a retort that Mayor Duggan, blight removal task force members, and the Detroit community would applaud. 

To settle the matter, Judge Colombo gave the city and Pieroni one more chance to return to court with their experts to convince him that the building is either dangerous to the public, or is an eyesore that is structurally sound.

Following the proceeding, a work crew was seen boarding up windows on the structure at a furious pace. But the action may prove to be too little, too late.

In early August, after distilling the vastly contradictory expert’s testimony, and likely weighing the lost tax revenue from the city-owned Statler site, Judge Colombo appeared to apply his own eyeball test of pictures of the building and common sense to rule that the structure is dangerous and presents an imminent danger to the public.

“He has had eight years and $1.5 million to repair the damage and did nothing,” the judge said of Pieroni. “Not until this lawsuit was filed did he take any action, and that action was too late and totally insufficient.”

Judge Colombo ordered Pieroni to begin demolishing the building by Aug. 15, an order the owner’s lawyers said they would appeal. db