Detroit taxpayers will likely bear the burden of millions of dollars in fixes related to testing and replacement of contaminated backfill at hundreds of demolition sites across the city.
Detroit’s top attorney said Friday that the contractor responsible for the “dirty dirt” is unlikely to have the resources to cover the costs and, absent state or federal grants, the bill for remediation will most likely fall on Detroiters.
“Unfortunately, what we have is a cost burden to the citizens that they should not have to bear, directly related to what we believe to be at least significant contractual violations if not criminal behavior that has resulted in all of these costs,” Corporation Counsel Conrad Mallett told BridgeDetroit following a special session of the Detroit City Council.
The city has grappled with a $20 million-plus price tag to address 655 questionable sites stemming from the work of the now-defunct contracting firm Gayanga Co., which is now the subject of city, state and federal investigations, as well as a site in Milford that provided the contaminated backfill dirt.
Mallett’s Friday statements come after the Law Department previously signaled that Detroit would pursue a cost recovery action against Gayanga for total damages, which Tim Palazzolo, director of the city’s Demolition & Construction Department, told BridgeDetroit Friday is “pushing the $20 million mark.”
Detroit-based Gayanga Co. and its owner, Brian McKinney, have been accused by the city of using contaminated dirt to backfill demolition sites. The company and McKinney have been the focus of federal, state and city investigations.
Mallett said Friday that investigations being conducted by the state’s Department of Environment, Great Lakes, and Energy (EGLE) and the Detroit FBI office are ongoing. The city’s Office of the Inspector General suspended Gayanga and McKinney last fall from doing work in Detroit based on the contaminated dirt findings. Gayanga had been awarded tens of millions in city demolition contracts since 2018.
McKinney announced in May that Gayanga was shutting down and filing a defamation lawsuit against the city, noting the court action, “arises from false and materially misleading public statements.” On Friday, Mallett said that McKinney had not yet been served with legal action from the city.
Detroit City Council President James Tate, who convened the Friday meeting, asked Mallett whether Detroit could recover testing and remediation costs from Gayanga.
“I don’t have good news,” Mallett told council members. “I think that the Gayanga organization, if not bankrupt, soon will be. Therefore, our ability to collect for what we think is, in fact, bad acts will be difficult.”
Additionally, the city’s environmental insurance company “is resisting, forcefully, responsibility for this particular program.”
Steps can be taken by the city for future contract language, Mallett said. At this time, Detroit will continue to focus on the insurance company for recovery. Iron Horse, the Milford site that supplied much of the contaminated fill dirt, Mallett noted, did not have a contract with Detroit when the material was provided. Rather, it was an approved site for dirt based on a consultant.
Mallet said Friday that he wanted to assure the council that, thus far, the contamination concerns appear to be isolated.
“There has been no evidence that we have discovered ourselves that would suggest that this was a systemic problem that extended beyond Gayanga,” he said.
Detroit officials said Friday that the city expects costs of around $12 million to remediate the remaining demolition sites with contaminated dirt.
Palazzolo said that the majority of the sites identified – 533 overall – are owned by the Detroit Land Bank Authority. Of the publicly-owned sites tested, 500 have not met safety standards.
As of Friday, 380 haven’t yet been excavated – and 195 sites present an “elevated risk,” Palazzolo said.
“The nature of contamination (for the 195 parcels) is such that it could evaporate and rise up through the soil and potentially get into adjacent structures and cause unsafe air over time to those areas,” Palazzolo said Friday. “Those are properties with the biggest concern. Those are the properties we need to remediate first.”
Palazzolo pegged that fix at around $6.7 million. The estimated replacement cost per property is $34,554, he said. The city has divided the remaining work into three priority tiers. The first two are slated for completion by 2029 based upon the time it will take for contracting, approvals and seasonal limitations, Palazzolo told BridgeDetroit.
A dedicated cost center was established within the Construction & Demolition Department’s budget for the remediation work via blight funding. Palazzolo said Friday that $8.4 million remains from the original $15 million set aside in late 2025 to address the site testing and remediation.
“One of the things I want to make clear is that this fund of money is not used for any other purpose,” said Palazzolo, adding within the department’s current fiscal budget there’s separate dollars for emergency demolition and stabilization work.
Council Member Angela Whitfield-Calloway argued Friday to Detroit’s Chief Public Health Officer Ali Abazeed that the city should declare a public health emergency over the contamination.
“This is, to the public health director, a public health emergency. It may not be in your opinion, but it really is and should be declared as so,” said Whitfield-Calloway, noting that the temporary orange fencing around the sites “is not containing the dirt.”
“It’s still seeping out into the air. There are air particles that, if there’s a wind, the dirt is flying everywhere. It’s traveling everywhere. I don’t know how far it’s getting on people’s properties, cars. Kids are walking through it, adults are walking through. It’s landing on the sidewalk. It’s not contained.”
Abazeed, who joined the department this spring, said he can’t speak to how things were handled before he arrived. But under Detroit Mayor Mary Sheffield, health officials are closely scrutinizing the potential health impacts, he said.
The department, he said, is taking the issue “seriously and urgently,” but stressed to council members that “contamination does not always equal exposure.”
Council Member Denzel McCampbell said he wants assurances that the city won’t encounter similar issues in the future with soil supply sites and contractors.
Mallett acknowledged Friday that there were past “hiccups” in the city’s contracting process, and some contractors did not have adequate documentation in place before contracts were authorized. But those “have been corrected” and they “won’t happen again,” he said. The city, he said, is also exploring whether it can secure its own fill dirt in the future.
Although the great majority of sites being reviewed for contamination are publicly owned, the city is also contending with 120 privately owned parcels.
The city reached out to those property owners earlier this year, seeking permission to test those sites. Fifty of those owners have approved the request, seven others have denied the city’s request, and Detroit did not get responses from 63 others. If the city doesn’t hear from those remaining property owners by spring, the city will pursue an administrative warrant.
“What I want to assure the public is, if there are public health implications in which we are consulting with the health department about, we will move more quickly than the springtime that I talked about,” Mallett added after the meeting.
As another measure toward process improvements, Palazzolo reiterated Friday, is that the demolition department now sources its backfill materials from just seven public pits with native gravel and soil from longstanding operations – down from 14 source sites previously. Two of the sites are located in Milford, and the others are in Pinckney, Washington Township, Petersburg, Milan and Maybee. The sites are inspected monthly by the demolition department and its environmental consultants. The soil is also sampled and analyzed before it leaves the source sites.
Earlier this year, the council approved a $3.5 million contract increase with Mannik and Smith Group, environmental consultants conducting due diligence related to the dirt issues. Originally, a $1 million contract was approved with Mannik and Smith for general environmental consulting services. The $3.5 million amendment was to cover costs associated with backfill testing.
For more information about locations and progress on testing and excavation, visit this webpage on the testing, removal and replacement process and an FAQ. Questions can be directed to demo-info@detroitmi.gov or (313) 224-4737.
BridgeDetroit reporter Jasmine Snow contributed to this report.
