Detroit has directed $48.5 million in bond funding toward tearing down and stabilizing blighted homes, but some are raising questions over transparency in the city’s spending, who is getting the work and the neighborhoods seeing the least of it.
City voters in November 2020 approved the contentious $250 million plan to target upwards of 16,000 properties over five years for demolition or rehabilitation. Mayor Mike Duggan’s administration billed the measure as the city’s best option to keep blight under control after razing more than 15,000 houses with $265 million in federal dollars. But critics opposed having Detroiters cover the cost of more demolition work, citing eroded trust in government over the years of local, state and federal investigations tied to bidding, high costs and record keeping over the city’s federally funded demolition.
“It’s just too much money for anybody to just play with … and it’s our money,” said Rachel Saltmarshall, a District 1 resident and home repair contractor.
Saltmarshall said she didn’t support the bond to begin with, and, based on concerns from the city’s last massive demolition effort, said she doesn’t trust that Detroit will adequately manage the funding it’s being given in this endeavor.
“There’s too much room as far as fraud and everything else to go on,” she added.
Scrutiny of Detroit’s federal demolition program began in the fall of 2015, culminating with two federal convictions in 2019 for bribery and bid-rigging. Arandondo Haskins, a former employee of Adamo Group – one of the program’s most prominent demolition firms – and ex-staffer of the Detroit Building Authority, pleaded guilty to accepting more than $26,500 from a contractor while rigging bids. Former Adamo estimator, Anthony DaGuanno, pleaded guilty to taking more than $372,000 in bribes to rig bids connected to the federal program.
Despite past controversy, city officials say multiple controls are in place to monitor bidding and contractor compliance and Deputy Mayor Todd Bettison noted in a statement that about 70% of Detroit voters supported Proposal N because “they felt it was in the best interest of their city and their neighborhoods.”
“The feedback we receive from residents living in the neighborhoods being improved through Proposal N has been completely supportive,” Bettison told BridgeDetroit. “The mayor feels Proposal N has been doing just what he promised it would do, which is to bring blight removal to neighborhoods that had been waiting for years or decades, secure thousands of solid vacant homes for renovation and to provide greater opportunity for Detroiters and Detroit’s small businesses to benefit from the program.”
‘Getting on board’
Since Proposal N began in March 2021, the city has demolished 2,377 homes and stabilized another 1,053 properties – fixing severe structural damage or sealing doors and windows – as of Aug. 10. A BridgeDetroit analysis shows Detroit’s District 1, 2 and 5 have seen the least amount of demolitions so far, with less than 200 apiece.
The most work – or 586 demolitions – have been concentrated on the east side in District 4. District 7 has seen the second most, with 453 demolitions, followed by District 3 on the east side, and District 6 in southwest Detroit, with 445 and 404 demolitions respectively.
District 4 Councilwoman Latisha Johnson said Detroit City Council members are kept largely in the dark about the bidding process until the demolition contracts come across their desks.
“I’m sure there’s a lot of discussion that happens between the Detroit Land Bank Authority and the mayor’s office and his administration,” she said. “We see it when it comes via a contract for the demolition contractor.”
Johnson said she believes that her district has gotten so much demolition funding under the bond plan due to “decades and decades” of neglect of the housing stock on the east side.
“Overall, the eastside has not had as much attention focused on it as the west side has,” she said, “and that led to more of the decay of our properties over the decades.”
City Council President Pro Tem James Tate, who represents District 1, said he twice voted against sending the bond to the ballot. First, because the focus was too heavy on demolitions and didn’t have a plan to preserve properties. A later proposal, he said, was “rushed” and didn’t allow the city enough time to engage with residents, he said.
Despite his initial reservations, Tate said residents in his district are “relatively pleased.”
“I’m thankful that it has not ended in a catastrophe and that people are slowly getting on board,” he said.
Tate said he expected his district to get less of the bond funding because the area got more attention under the federal Hardest Hit Fund program. The last HHF-funded demolition was in August 2020.
The HHF program limited demolitions to specific geographic areas within the city. After it began in spring 2014, the program expanded its boundaries four times. But Detroit was still unable to touch all neighborhoods in need, with less attention going to Districts 3, 4 and 7.
The federal guidelines also prohibited giving preference to contractors based on race, gender or location, which is a priority under Proposal N.
District 7 has seen some of the most attention from Proposal N, but it’s still not fast enough for Littlefield Community resident Linda Gadsden.
“I don’t see the progress of it in my area,” Gadsden said, “and I don’t know exactly what they’re doing with that money.”
When the bond was pitched, city officials estimated that the average cost per demolition would be $20,000. According to Ryan Foster, a spokeswoman for the Demolition Department, at an average of about $21,000 per tear down, the city’s cost projections have remained “right on target,” despite staffing shortages induced by COVID-19 and rising inflation.
BridgeDetroit’s analysis pegged the average cost per Proposal N demolition at $20,231.69. The city’s District 5 has seen the highest average at $23,086.13 per property. The lowest average cost – $16,884.66 — is in District 1.
“Rising costs have marginally impacted contractor productivity in recent months – think fuel costs and subsequent trucking cost increases – but they aren’t expected to significantly impact our overall goals,” Foster said.
The city, she said, doesn’t anticipate that it will run out of funds before its 2025 goal of getting the identified houses down and others stabilized.
“(But) if by chance costs exceed estimates, we’d get through as many properties as possible with the existing funds, then potentially seek additional funding as necessary,” Foster said.
Some residents also said they feel under informed about which companies are getting contracts for the demolition work and why.
BridgeDetroit’s breakdown of Proposal N demolition data showed Detroit-based Gayanga Co. has been awarded six contracts worth about $18.45 million – the most of any contractor under the program. Lansing-based SC Environmental has eight contracts valued at $13.5 million and Dundee-based Salenbien was awarded four contracts totaling more than $11.2 million.
Homrich Wrecking in Carleton – a company involved in a large portion of the city’s federal demolition work – was awarded four contracts, valued around $10.9 million, and Inner City Contracting in Detroit has seven contracts totaling $10.4 million.
Salenbien has been doing demolitions in Detroit since the city’s HHF program. Andy Salenbien, president of Salenbien, said Proposal N is ”doing a lot of good for the city” and that the city is able to keep better track of the work contractors are doing. Federal demolition work in Detroit was jointly overseen by the Detroit Land Bank Authority and Detroit Building Authority. The city has since reinstated an in-house Detroit Demolition Department.
“I believe the Hardest Hit funds may have had a final completion date, but the Proposal N, with these benchmarks, it’s an easier way to track contractors’ productions throughout the life of the contract,” Salenbien said.
The city grades contractors on how they can meet benchmarks after being awarded a contract, Salenbien said. Some of the criteria the city grades contractors on are timeliness, meeting the standards outlined in the contract bid, and hiring Detroiters to work on demolition projects.
“If you fall short of a City of Detroit residency percentage they have outlined, (the city) has a mechanism in place where you have to pay a reimbursement to the city for any percentage that you fall short,” he said.
According to an executive order, 51% of construction jobs in publicly funded construction projects that cost at least $3 million, including projects that get tax breaks, must go to Detroit residents.
John Roach, a spokesman for Duggan, said the city’s Department of Civil Rights, Inclusion and Opportunity (CRIO) is responsible for ensuring contractors are hiring Detroit residents for the demolition and stabilization projects. If a company isn’t hiring enough Detroiters, the company has to contribute a certain percentage of the money awarded in the contract to a job training fund.
“Even if the number of Detroiters hired on a work site aren’t up to the 51%, at least we know that and we can balance that off with the fact that the employers involved are contributing to a training fund to help train more Detroiters for those jobs in the future,” Roach said.
Representatives from Gayanga and SC Environmental Services did not respond to multiple requests for comment on Proposal N and officials with Homrich declined to comment.
Although an itemized cost for each demolition is not posted in publicly-accessible data, Foster stressed that costs among contractors aren’t easily comparable, since “no two demolition groups are the same.”
“While the amount of properties is sometimes the same, the houses will differ,” she said. “Those differences range from size of the houses, difficulty of access to the houses and degree of abatement required.”
Foster said costs also factor in labor, equipment and abatement, but the city did not provide BridgeDetroit with details of how the city budgets for each category when soliciting bids for demolitions, stabilizations or abatements.
The city’s Office of Contracting and Procurement determines the “cost reasonableness” of bids before selecting a demolition contractor, Foster said.
“Cost reasonableness is an analysis of the bid cost performed through the city procurement process,” she added. “For the Demolition Department, it’s a drilled down look of the bid cost on an individual property and phase basis.”
The Demolition Department publishes weekly average costs via social media, reports on contractor violations and an ongoing tally of completed Proposal N demolitions on the city’s Demolition Dashboard, but there is no detail about how money is being spent, the city’s process for awarding contracts, or how the Demolition Department decides where to invest its resources within the city.
For the city’s stabilization work, Foster said, early projections for the per property cost was $15,000. But that average is significantly lower, at $6,891.60. Despite the savings, Foster said demolition is more cost effective for the city.
“When we rehab, we’re essentially stopping the property from getting any worse – not necessarily making it move in ready for a buyer,” she said. “The combined cost for us to stabilize the property and the buyer’s costs associated with getting it move-in ready will almost always be more than the average cost of a residential demo.
“Similar to demos, there is a chance price per property could increase as we continue to weather this stretch of higher fuel costs,” she added, “but it’s not a major concern as fuel prices are seemingly leveling out.”
The city has committed to a goal of awarding more than half of all Proposal N demolition contracts to Detroit companies and has promised that Detroiters would get preference for acquiring salvaged homes.
Detroit Demolition Director LaJuan Counts said the majority of companies contracted to do demolitions in Detroit – 21 out of 23 – are based in the city.
Foster said that the city’s procurement office and CRIO are tasked with certifying whether the contractors are based in the city. Roach said CRIO gives contractors “credits” for being based in Detroit and companies use those credits during the bidding process. The credits, along with other factors like timeliness and cost, help the city select which company will get the contract.
In June, the city’s Office of the Inspector General imposed a 90-day interim suspension for Inner City Contracting, its president Curtis Johnson, and associates Laura Durocher and Gerald Durocher II for allegedly submitting fraudulent documentation to CRIO to receive certification as a city-based and headquartered small business.
Counts said she could not comment on the allegations against Inner City Contracting, but said that the company “performed excellent work for the city.” Inner City could not be reached to provide comment.
‘We should know more’
The city has spent more than $10 million demolishing 453 blighted homes in District 7 since 2021, according to data compiled by BridgeDetroit. Gadsden said she fully supports tearing down the dilapidated structures in her neighborhood, but wishes the city removed them more quickly, given how much money is being spent.
BridgeDetroit’s analysis found that Gadsden’s Littlefield Community neighborhood, which sits between Grand River, Wyoming and the Jeffries Freeway, has seen 34 demolitions under Proposal N. Meanwhile, the Midwest neighborhood – between the Jeffries Freeway, Edsel Ford Freeway, Roselawn Street and Warren Avenue – has had 345 demolitions since March 2021.
The Mapleridge neighborhood on the city’s far east side bounded by Seven Mile, Gratiot, Kelly and Whittier has had 223 houses torn down – the second most of any other city neighborhood. The Airport Sub, Outer Drive-Hayes, and Brightmoor neighborhoods round out the rest of the top five neighborhoods – all with at least 90 demolitions completed.
The city has spent $ 11.6 million tearing down or stabilizing houses in District 4 alone. Of that, nearly $4.4 million was directed toward demolition work in Mapleridge.
That level of spending isn’t evident to Terran Taylor, a 30-year resident of the neighborhood.
“The city needs to be more open about where the money is going, because $11 million in demolitions, where did that price come from,” Taylor said. “Renting the trucks and vehicles? The labor and the people actually doing the work?”
On the city’s west side, $2.7 million has been spent on demolitions and stabilizations in District 1 – the least amount of Proposal N money in any district.
Shari Bryant, a resident and renter in District 1, wants more public engagement from the city on why some districts are receiving more demolition funding than others.
“We should know more about how the city is spending the money because as taxpayers, we’re the ones giving them the money,” Bryant said.
Despite criticisms, some residents are strong supporters of the program. Sandra Pickens, a longtime Littlefield Community resident in District 7, has been pointing out “dangerous” vacant properties in and around her neighborhood to city officials since 2014.
Pickens said she’s informed the city of about 50 vacant homes that she wants to see torn down. Her effort, which she said has resulted in about 15 homes being razed, was born out of the love she has for her community.
“I love our seniors and I love the children. And I want the children to feel like when they walk down a street, they can feel comfortable with it,” Pickens said. “They don’t have to walk past abandoned houses, where trees and bushes are a mess and the house itself. So that’s my goal.”
Understanding the plan
Before the prior Detroit council narrowly approved the bond measure for the 2020 ballot, the panel had rejected an earlier version of the plan, citing controversy stemming from the federal program and a lack of hiring guarantees for Detroiters. Although the bond went to voters, concerns lingered over public awareness and understanding of the plan.
Donna Givens Davidson, President and CEO of Eastside Community Network, said the Detroit City Council’s ultimate decision to put Proposal N on the ballot mirrors the trend of Detroiters feeling like they don’t always have clear-cut options for improving their neighborhoods.
“What ends up happening is people have to choose between seeing any demolition, any investment, or nothing at all, and a lot of people are persuaded that it was a good idea to demolish,” Givens Davidson said.
Givens Davidson said she doesn’t outright oppose demolitions, even though she was against the blight bond, which she said doesn’t do anything to address the causes for blight, such as evictions and property tax foreclosure.
“You can’t demolish your way into sustainability,” she said, “so if you’re continuing to demolish homes at this rate and people continue to lose homes and homes are continually being abandoned, then it’s like this never ending cycle.”
Givens Davidson said she believes that the program’s problems far outweigh its successes.
“Overall, I think there’s just been a lack of coordination, a lack of transparency, and some neighborhoods are being unnecessarily razed when there’s other possibilities for those properties,” she added.
Since Duggan took office in 2014, the city has spent about $456 million overall on demolition between the $265 million awarded through multiple rounds of the federal Hardest Hit program and $116.5 million from the city’s General Fund since fiscal year 2017, according to Roach.
Roach said another $95 million from American Rescue Plan Act funds are being allocated for industrial and commercial blight remediation, but none of that money has been spent yet. The city has earmarked $16.4 million more for blight removal in its 2023 General Fund budget.
Pickens said she’s seen a lot of families come and go since her family moved to the west side in 1963, and she has witnessed houses that were once beautiful go uncared for and fall apart. Pickens said she’s hopeful that the city’s efforts under Proposal N will help reverse that trend.
“We just wanted to see, along with the changes, improvements,” she said. “If it means that there’s some houses that can get torn down, let’s do that.”