Former tenants of the Leland House in downtown Detroit are still trying to retrieve their belongings from the empty and bankrupt apartment building, nearly two months after broken electrical equipment forced them out.
During a Wednesday, Feb. 4, hearing in U.S. Bankruptcy Court, a federal judge heard arguments for and against allowing the 37 or so displaced tenants back inside the low-rent high-rise at 400 Bagley to get their stuff.
Detroit Fire Marshal Donald Thomas said it would be too much of a liability to let the tenants back inside, especially with no working “fire protection systems.”
Attorneys for the Leland House Tenants Union claim that when the tenants were being evacuated from the building on Dec. 10, officials with the Detroit Fire Department and the city told them that their belongings would remain accessible. But the city proceeded to lock up the building and forbid anyone from entering.
Patrick Foley, a lawyer for the tenants union, told U.S. Bankruptcy Judge Maria Oxholm that the displaced tenants have a right to return to their apartments to gather their belongings and that they don’t like being treated “like chattel property.”
“They are tired of that,” Foley said. “They have legal rights.”
The next step for the Leland House building also is unclear.
Judge Oxholm last week rejected a proposal by Leland House’s owners to hold a fast-track online auction of the 22-story building. The proposed auction would have started March 9 with an $800,000 opening bid and a “stalking horse” bidder who would have been ready to buy the property for $3.5 million if no one bid higher.
(Several interested parties in the bankruptcy case, including a U.S. bankruptcy court trustee, objected to the proposed auction’s terms, including a $200,000 fee that the stalking horse bidder would get if they were outbid and contended that the planned $3.5 million minimal acceptable bid was far below a $19.4 million appraisal of the building from 2020.)
Judge adjourns without decision
Judge Oxholm ended Wednesday’s court hearing without deciding on the tenant union’s request to reconsider an earlier court order that only allows moving contractors to enter the building and pack up the tenants’ belongings at some point in the future.
Related:
- Judge OKs plan that would allow Leland House residents to stay
- Leland House residents face power shutoff, possible relocation
The court will reconvene Feb. 24 to continue discussions on the union’s reconsideration request. In the meantime, she asked that attorneys for the city, the tenants, the Leland House’s owners and DTE attempt to come up with alternative ways to get the tenants’ belongings out.
As of right now, the tenants are forbidden from ever going back inside — even to supervise as their apartments get cleared out.
The court-approved plan involving contractors has yet to go into action, primarily because Leland House has been without power and working elevators since the Dec. 10 electrical equipment malfunction that made the building uninhabitable. The residents’ apartments are on floors 6 through 21, making it hard to do heavy moving without an elevator.
A lawyer representing Leland House, Ryan Heilman, said about 23 tenants have given consent to have contractors move their belongings. The remaining tenants haven’t given permission.
Heilman said that moving contractors gave a $200,000 quote for the job of packing up every apartment and moving the items out. However, the price would drop considerably if electrical power happens to get restored and the elevator begins working again.
Right now there isn’t enough in Leland House’s $1.2 million debtor-in-possession loan to do the packing job, he said.
Leland House recently received a $75,000 maximum allowable cost quote for an electric contractor to restore partial power to the building — presumably enough to get an elevator and some lights working. Unfortunately, there isn’t enough money for that job, either, Heilman said.
Evacuated to Red Roof Inn
The city says it evacuated over 60 residents from Leland House on Dec. 10, after seeping water from melting snow was said to damage the building’s own electric transformers in the basement.
Residents who had no other place to stay were put up at a Southfield Red Roof Inn. DTE Energy initially paid their hotel bill before the city of Detroit took over.
A Detroit spokesperson said the city has spent $74,960 so far on accommodations for the former Leland House residents.
Displaced Leland House tenant Jerrold Foke attended Wednesday’s court hearing and left disappointed.
He disagreed with the Fire Marshal’s assessment that it’s too dangerous to allow residents back in to retrieve their belongings. He said he lived at Leland House for 23 years, during which time there were two fires on the sixth floor where he stayed and that each fire was easily contained.
“It’s a fireproof building,” he said.
Foke said he only had enough time to pack a few outfits during the building’s evacuation and that he has been staying at an AirBnb on his own dime.
He said he paid less than $700 a month in rent for his unique apartment at Leland House that consisted of three connected units. Foke is still determining his long-term plan, as he assumes he would need to pay three times that amount for a similar apartment in any other downtown building.
Leland House filed for Chapter 11 bankruptcy on Nov. 3. The building’s longtime owner, Michael Higgins, died in 2023.
Luis Ramirez, a representative for Leland House’s owners, issued a statement after Wednesday’s court hearing on the situation.
“We understand how important residents’ personal belongings are. We are working closely with the city of Detroit, the Detroit Fire Department, the court and residents to establish a safe process that will allow them to retrieve their belongings, and we hope that process is finalized soon.”
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl