Former residents of the Leland House apartments in downtown Detroit are to each get $15,000 as part of a bankruptcy court settlement that a judge approved the week of Nov. 2.
The settlement, which could exceed $500,000 in total, was obtained by the Detroit Tenants Union on behalf of the 37 residents, who were forced to evacuate the 21-story downtown high-rise last December after an electrical outage caused by broken equipment in the building.
Steven Rimmer, chair and executive director of tenants union, described the settlement, which was approved Thursday, Nov. 5, as a significant victory for the displaced renters and an outcome that doesn’t happen often in Detroit for those in similar situations. The money is to be dispensed in the coming weeks.
“Residents lost their homes, were separated from their belongings and were left to navigate a crisis that turned their lives upside down,” Rimmer said in a statement. “They could have been forced to face this alone. Instead, they organized, stood together and fought.”
The Leland House, 400 Bagley St., was known for its cheap rents and all of its tenants were on month-to-month leases. The equipment failure and forced evacuation happened about a month after Leland House declared bankruptcy.
U.S. Bankruptcy Judge Maria approved the settlement, with money for the $15,000 payments to come out of the proceeds from the building’s recent $3 million sale.
Court documents say that money was available for the tenants because city officials were willing to forgo “a large portion” of Detroit’s own claims in the bankruptcy court case.
Because some of the displaced tenants had nowhere to go, the city for months paid the bill for them to stay at a Red Roof Inn in Southfield. The tenants also had to wait nearly five months for permission to go back inside the shuttered apartment building to retrieve their belongings.
Conrad Mallett Jr., the city’s Corporation Counsel, told the Free Press on Friday, Nov. 6, that the city ultimately incurred over $750,000 in costs for temporary housing for the Leland House residents, and anticipates collecting less than $150,000 from the bankruptcy case.
“To be sure that the tenants could live their lives in a hopefully new and better circumstance … we absolutely chose to forgo dollars that would have reimbursed us, in an effort to make sure that each family could get started anew,” he said.
The bankruptcy judge approved the sale of the empty building this spring for $3 million to a limited liability company called Mudhish Development, linked to businessman Raad Gobah.
Gobah previously declined to discuss his group’s future plans and did not respond Nov. 6 to messages seeking comment.
Mallett, the city’s attorney, said he is also unaware of what the building’s new ownership may be planning to do.
“Saying that you’re going to redo the Leland House is a herculean task,” Mallett said. “So we’re interested in what the new owners plan, and to the degree that they approach us with a solid plan, we would certainly be interested in trying to be supportive.”
The building opened in 1927 as the Detroit-Leland Hotel and was renamed Leland House in 1964, when the property became a mix of hotel rooms and apartments.
The late Detroit landlord and developer Michael Higgins bought the building in 1980 and went on to open a popular nightclub inside, known as Leland City Club, which was known early on as a hard-core punk venue and that evolved over time with more techno, goth and industrial music.
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl