Myth #5: Duggan Tore Down the Abandoned Houses and 'Cleaned Up' the City
Seriously? Have you drove around the city lately? Like, the REAL city? Sure Midtown™ is nice, but the rest of the city looks basically the same as it did during the Great Recession, while we are being told over and over that "Detroit is coming back." Correction: downtown is coming back...but it's only coming back for people who have money. Still plenty of abandoned buildings and rubbish-filled overgrown lots everywhere else, but who cares, right? The part that yuppies go to is clean, and that's what matters, eh?
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| LeDuff grills Duggan over the demolition scandal. |
Here's the facts. Duggan has demolished about 19,000 abandoned houses as of 2020, which, granted, is a lot. He *claims* he can eradicate all blight from the city by 2025. Conveniently, that's the year after his third term ends, assuming he is reelected. And, Duggan says he can only do it if he gets another $250M funneled into his demolition program that has been under investigation for mishandling funds since it started. That was where Proposal N came in.
Here's the problem. Every step of the way along Duggan's Quixotic demolition crusade has been absolutely riddled with corruption, lack of transparency, lack of oversight, and mismanagement. Worse yet, he doesn't understand that the only way to stop blight is to address the underlying poverty that causes it, not demolition. Or he doesn't care. When invited to a 2017 town hall discussion on poverty Duggan not only failed to attend, but actually declined the invitation. That was during his reelection campaign to be the mayor of the most impoverished city in America, so you tell me...
Every mayor since Coleman Young has tried to demolish the abandoned houses, and yet we always seem to have more and more of them. The science of modern urban planning (as well as every urban study since the Kerner Commission of 1968) has already found the answer to the problem, yet Duggan is still tied to the old "wrecking-ball" school of thought from the 1960s. Maybe the fact that he has so many close ties to the big Metro Detroit demolition companies explains why he is so enthusiastic about demolition? Maybe he doesn't give a damn about blight at all, and is just out there scoring payoffs for his campaign donors? Another interesting point to note is that Dennis Kefallinos, a local slumlord notorious for his many long-abandoned buildings, was one of Duggan's biggest donors...
Hey, why don't we take a peek into Duggan's campaign donor list, shall we? A 2017 report found that corporations and wealthy individuals from outside of Detroit accounted for about 90 percent of campaign contributions to Duggan's mayoral campaign...
Suspiciously enough, Duggan also received a significant amount of donations from companies in the predatory lending business. According to Motor City Muckraker,
"Duggan received 56 donations exceeding $1,000 from out-of-state residents, including six executives from JP Morgan Chase, which reached a $55 million settlement with the government in January 2017 over allegations that it discriminated against thousands of black and Latino mortgage borrowers. Many of the out-of-state donations came during two fundraisers in New York City. Duggan raised $31,519 on the 20th floor of 277 Park Avenue, where JP Morgan Chase’s world headquarters are. More than two dozen executives with Detroit-based Quicken Loans, which the federal government also accused of predatory lending, contributed nearly $73,000 to Duggan’s re-election campaign. In early July, a federal judge ruled that Quicken Loans officers brokered illegal loans in excess of fair market value by relying on excessive home appraisals. Another company that profits off of foreclosures, Ohio-based Safeguard Properties, also donated to Duggan’s campaign. Founder and chairman Robert Klein and his wife Ita Klein each contributed the maximum $6,800. The company clears out bank-foreclosed homes."
Duggan is also tied to all the big demolition contractors operating in the city—Adamo Group, Farrow Group, Homrich, MCM Management, etc., none of which are actually based in the city. Which makes you wonder why they would be donating tens of thousands to a mayoral campaign in a city they are not constituents of. I think we can safely say it isn't philanthropy!
There were also plenty of conflicts of interest, with the heads of these demolition companies sitting on the Detroit Board of Examiners for Wrecking Contractors...a board which in addition to recommending who gets wrecking licenses, also has the power to recommend license suspensions and revocations. Sounds like a fiefdom to me. Better yet, "unlike other board appointments required to go before City Council for approval, wrecking board members are appointed by Mayor Mike Duggan to serve three-year terms, with no other approval needed."
"The appointment of two contractors—one currently suspended from bidding in Detroit's demolition program—to a board that awards wrecking licenses in the city is raising questions about whether it's a conflict of interest for them to see the inner workings of potential competitors during the application process. The city's Board of Examiners for Wrecking Contractors is comprised of seven members, two of whom are Richard Adamo, the owner of Adamo Group, and Michael Farrow, owner of Farrow Group. The remaining members include employees of the Buildings Safety Engineering Department, Detroit residents and an engineer."
Better yet, it's a family affair: Richard Adamo was appointed by Mayor Duggan in May 2017, to replace his brother, John T. Adamo Jr.! Allowing board members to also be active bidders within the city's demolition program is an "odd way to set up a review system," wouldn't you agree?
In 2015 and 2017 it was revealed that the heads of Adamo, MCM Management, and Homrich were given "uncommon accommodations" in the bidding process for demolition work, after donating thousands of dollars to Mayor Duggan...
https://www.metrotimes.com/news-hits/archives/2017/01/25/two-companies-involved-in-detroit-demo-probe-donated-thousands-to-mayor
Are we surprised yet?
"The companies—Adamo, MCM Management and Homrich—were among four that attended an invitation-only pre-bid meeting in 2014, as the city was beginning its ambitious effort to demolish thousands of blighted homes with federal Hardest Hit funding. That program is now the subject of a federal investigation, with the Special Inspector General for the Troubled Asset Relief Program and FBI looking into bidding practices and the rising cost of demolitions under Duggan. Recently-released subpoenas issued by SIGTARP to the Detroit Land Bank and Detroit Building Authority requested communications pertaining to the three companies and others."
Are we surprised yet?
"The companies—Adamo, MCM Management and Homrich—were among four that attended an invitation-only pre-bid meeting in 2014, as the city was beginning its ambitious effort to demolish thousands of blighted homes with federal Hardest Hit funding. That program is now the subject of a federal investigation, with the Special Inspector General for the Troubled Asset Relief Program and FBI looking into bidding practices and the rising cost of demolitions under Duggan. Recently-released subpoenas issued by SIGTARP to the Detroit Land Bank and Detroit Building Authority requested communications pertaining to the three companies and others."
So if Duggan is heavily tied to donors in the foreclosure and predatory lending businesses, donors in the real estate business, and donors in the demolition business, do we trust him when he says he is trying to remove blight? You do understand that campaign contributions are essentially promises of political favors, right? Anyone who gives money to a campaign expects to get something back for their money, once their boy gets into office. That's how American politics works; it's called buying a politician. Our votes mean little by comparison.
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And now let's shed light on the fact that Duggan was financing his demolition crusade by misusing federal money originally intended to help people save their homes from foreclosure...
According to the Metro Times, with a surplus of "unused" money (wink, wink!) during Duggan's first term, Michigan became the first state to demolish homes using money intended to save them.
The idea was that demolitions would revitalize neighborhoods "by increasing the property values of surrounding houses, attracting new homeowners, and reducing crime rates." However, MetroTimes wrote that a report commissioned by the Skillman Foundation and Rock Ventures (both tied to Duggan and Dan Gilbert) found that for each demolished home in Detroit, the value of adjacent homes only increased by a whopping 4.2%. Meanwhile, the US Treasury Department's decision to allow use of these anti-foreclosure funds for demolition came under fire "because the federal government created no rules or controls to prevent fraud, waste, and abuse, according to a 2016 SIGTARP investigation," which found that demolition programs are "vulnerable to the risk of unfair competitive practices such as bid rigging, contract steering, and other closed door contracting processes" because the "Treasury conducts no oversight." That right there is a perfect breeding ground for some good ol' Dugganery. It was when Duggan ran out of those federal "Hardest Hit" funds, that he came up with Proposal N to get more money.
Not surprisingly a report to Congress that April slammed the state of Michigan for "skyrocketing demolition costs," MetroTimes wrote, indicating that the average price to raze a house had increased 90 percent, from $9,266 to $17,643 by the second quarter of 2016. You may remember Mayor Duggan having to go on TV with Charlie LeDuff to 'splain that one...
Not surprisingly a report to Congress that April slammed the state of Michigan for "skyrocketing demolition costs," MetroTimes wrote, indicating that the average price to raze a house had increased 90 percent, from $9,266 to $17,643 by the second quarter of 2016. You may remember Mayor Duggan having to go on TV with Charlie LeDuff to 'splain that one...
Gee, you think those rising demolition costs might have something to do with the fact that Duggan lets his friends in the business set their own prices?
Jerry Paffendorf of Loveland Technologies, a Detroit-based property and mapping company told Metro Times that "Many of the houses now being demolished could have been saved if there wasn't a lack of preventing foreclosures. If you don't prevent foreclosures, you're going to have more houses to demolish."
So let me wrap this up neatly for you...instead of directing efforts toward preventing foreclosures, Duggan instead redirected federal Hardest Hit funds so that there would be more abandoned houses for his buddies in the demolition business to tear down, so that his donors in the foreclosure and predatory lending industries could profit from higher foreclosures, and so that his donors in the real estate industry could capitalize on land speculation in the wake of this turnover, and build high-end hipster rentals where there were once single-family homes that had been paid-off decades ago. Then when the federal money runs out, he comes up with Proposal N to bilk the Detroit taxpayer out of another $250M. This is a master class in gentrification, and Duggan is the professor.
Jerry Paffendorf of Loveland Technologies, a Detroit-based property and mapping company told Metro Times that "Many of the houses now being demolished could have been saved if there wasn't a lack of preventing foreclosures. If you don't prevent foreclosures, you're going to have more houses to demolish."
So let me wrap this up neatly for you...instead of directing efforts toward preventing foreclosures, Duggan instead redirected federal Hardest Hit funds so that there would be more abandoned houses for his buddies in the demolition business to tear down, so that his donors in the foreclosure and predatory lending industries could profit from higher foreclosures, and so that his donors in the real estate industry could capitalize on land speculation in the wake of this turnover, and build high-end hipster rentals where there were once single-family homes that had been paid-off decades ago. Then when the federal money runs out, he comes up with Proposal N to bilk the Detroit taxpayer out of another $250M. This is a master class in gentrification, and Duggan is the professor.
But wait—there's more! Demolition contractors working under Duggan's Land Bank have been in trouble multiple times for tearing down the wrong house!
And back in 2018 there was also a kerfuffle involving a scam regarding the dirt used to fill in all the house foundations after demolition...
There was initially a plan to get a good deal from MDOT on the leftover fill dirt after their huge I-96 reconstruction project. However, as Charlie LeDuff reported, "the mayor and his boys decided we couldn't use the dirt from the freeway because it contained too much road salt residue from winters past. The mayor said it was too salty. So, it was too salty." Then Duggan allowed demolition contractors to source their own fill dirt, and gave them permission to charge whatever prices they deemed appropriate. "That's why the price of demolitions doubled since Duggan took office," LeDuff wrote, "At least, that's what Hizzoner keeps telling anyone who'll listen. Good dirt is expensive."
In other words, Duggan intentionally created a "dirt shortage" by rejecting the MDOT dirt, and then allowed his favored contractors to set their own prices. "Why worry about salt when the city now allows concrete and brick from the demolition jobs to be ground up and thrown back into the holes, thus double charging you for hauling it away, and then hauling it back and charging you for 'clean' fill?" LeDuff asks.
The dirt scam resurfaced in the media again in both February and March of 2019:
https://www.freep.com/story/news/investigations/2019/02/26/detroit-land-bank-contractor-razed-homes-hid-debris-under-dirt/2978137002/
https://www.freep.com/story/news/investigations/2019/02/26/detroit-land-bank-contractor-razed-homes-hid-debris-under-dirt/2978137002/
I myself have video footage of demolition contractors burying debris containing asbestos tile on the Land Bank lot next to my house.
In February of 2021 Detroit News dug up even more dirt on the demolition program:
In a nutshell, in order to steer contracts to his favored campaign donors, and in order to fulfill the bill of goods voters were sold on Proposal N regarding hiring of 51% "Detroit-based" contractors, Duggan allowed suburban demolition companies to get a Detroit address by merely setting up a PO Box or registering a Detroit address at the UPS Store on Woodward, while keeping all of their physical assets in the burbs. Some companies made this address change even after the deadline to apply—as late as December 31st—and somehow still got to the front of the line.
Granted, that has been going on for a LONG time, and not just with demolition. But four out of seven of these companies had also committed some sort of ethics or code violations, such as dumping asbestos containing materials, failing to report certain activities, failure to complete demolitions, etc. And let's also not forget that right before Proposal N was passed, the requirements for contract bidders was changed so that only companies with a certain amount and type of heavy equipment were able to bid, which of course favored the big suburban demo contractors and edged out the smaller black owned Detroit-based contractors. But no one is really anxious to push back too hard on these issues because no one wants to look like they are an impediment to keeping the demolition machine rolling in the city...every voter has an abandoned house on their block that they been trying to have torn down for decades now, so demolition promises are a political "sure thing." The issue is really oversight, not demolition, but whatever.
Then this article came out the very next day:
Kevin Woods, the suburban owner of an asbestos abatement company with a key role in Detroit's federal demolition program was arraigned on multiple felony and misdemeanor counts, including false pretenses, money laundering, bribery, violating air quality statutes, and defrauding the Michigan Department of Licensing and Regulatory Affairs out of $26,600 in fees. Altogether the crimes are worth 20 years in prison if convicted.
And of course there's Detroit Future City, touted as the shimmering master redevelopment plan of the city post-bankruptcy, which would decide what neighborhoods rise and which ones get put out to pasture (in other words, get cut off from city services to save money). It's another Duggan puppet-entity, with two of his top advisors sitting on its board, as well as a Dan Gilbert mole. Detroit Future City also received foundation money disbursements that he approved to be distributed via the Kresge Foundation, prior to his reelection campaign, to ensure their loyalty.
You may also remember the "Detroit Mower Gang," a group of volunteers who went around cleaning up trash and mowing abandoned Detroit parks, becoming a minor media sensation in the 2010s. Mayor Duggan eventually got sick of those do-gooders and began spying on their group so as to learn the locations they planned to mow before they got there, according to one member. Duggan then dispatched city mowing crews to those parks a day in advance, in order to steal the Mower Gang's thunder and keep them from getting good press...because I guess in Duggan's mind, they were making him look bad, or ineffective? Well Mr. Mayor, if you had the resources to keep these abandoned parks mowed all along, why the covert, underhanded tactics? Makes you look really petty.
And the hits keep on coming. In June of 2021, we were STILL finding out about new corruption in Duggan's blight program:
A federal investigation discovered that another $13M went to demolition contractors between 2017 and 2019 that could not be accounted for, and besides, Michigan was one of the few states still using Hardest Hit funds.
If this all wasn't enough to convince you, see also my other post, about Duggan's Proposal N:
