February 5, 2011 at 1:00 am

Bing to crack down on absentee landowners of blighted properties

Detroit's biggest land speculator
Detroit's biggest land speculator: Michael Kelly has acquired more than 1,000 properties in the city, leaving some people unhappy about his methods and intentions.

Detroit —Mayor Dave Bing is promising to put pressure on absentee property owners as he progresses with his plan to reshape Detroit.

A spokesman for the mayor on Friday said Bing is getting tough with speculators and owners of nuisance properties who are investing in the city because of low real estate prices but fail to maintain their properties. The mayor is enlisting collection agencies for those who owe for delinquent blight violations and utilizing an ordinance that requires owners of vacant property to register with the city, the spokesman said.

"Under the Bing administration, the city of Detroit is cracking down on absentee property owners and working to address issues resulting from predatory speculators," wrote Dan Lijana, a Bing spokesman.

The promise followed a two-day series in The Detroit News about land speculation and its potential impact on Bing's signature initiative, the Detroit Works Project. The plan, which Bing is expected to unveil in the next few months, could include using incentives to consolidate residents in seven to nine neighborhoods and abandon underpopulated ones.

Public input on the proposal continues from 10 a.m. to 2 p.m. today during a forum at the American Siberian Hall, 19940 Van Dyke.

The News' investigation found that 10 private landowners — all but two of whom live outside Detroit — own more than 5,000 city parcels. Included in the total are scores of empty lots and vacant buildings that investors bought for as little as $500 after they were foreclosed for back taxes.

The largest private property owner, Michael G. Kelly of Grosse Pointe Woods, has used the tax auctions to amass 1,152 parcels throughout Detroit, according to city and Wayne County records. Much of his portfolio is vacant, and city records indicate he has owed nearly $100,000 in blight fines since 2005.

Kelly has disputed the fines and city records showing he's the top landowner, has questioned why the city is sitting on nearly 39,000 publicly owned parcels and said he has a vested interest in the city's comeback.

But Council President Charles Pugh said he worries that speculators could complicate the Detroit Works Project, potentially by demanding high prices for their properties or challenging the effort in court.

"We need to be spending our money on incentives to help people move, not (on) speculators," Pugh said. "It really angers me that people are taking advantage of the city right now."

Karla Henderson, group executive in charge of the Detroit Works Project, has said part of the city's strategy will be to use the newly formed Detroit Land Bank to acquire key properties before speculators have the chance to buy them. But the land bank hasn't started to acquire city or tax reverted properties yet.

The city has often struggled to hold owners of blighted land accountable. As of last year, the city Department of Administrative Hearings, or blight court, was owed nearly $41 million in fines. And buyers are flocking to the annual Wayne County tax auction. In October, the auction set a record, selling more than 4,300 properties with opening bids of $500.

But critics have said the city controls more blighted properties than any other landowner.

Sheila Cockrel, a former councilwoman, said there needs to be a more coordinated effort — through city and Wayne County government — to deal with Detroit's vacant land.

"There needs to be one strategy and not separate silos," Cockrel said.

"We need to find the most nimble real estate vehicles that are transparent and fair."

cmacdonald@detnews.com