Detroit explores razing some blighted properties itself

Christine Ferretti
The Detroit News

Detroit building officials are contemplating an in-house demolition department as one of several measures to curb the rising costs associated with tearing down blighted properties in the city.

The concept — and several others — were floated to Detroit City Council on Tuesday during an update of Detroit’s demolition activities amid an internal audit of the program.

Brian Farkas, special projects manager for the Detroit Building Authority, said the plan is in its initial stages and could lead to the city buying or leasing equipment to perform some demolitions in-house. The department could start by tackling about 10 houses per week and relieve some of the pressure on contractors.

“We are going to be vetting it rigorously,” Farkas told the council. “We are looking under every corner for increased capacity right now.”

Officials say it’s not yet clear how much the city could save by demolishing some of the properties itself.

Council President Brenda Jones questioned how the process would work and cautioned that “we’ve been in that business before.” She said that since Detroit rid itself of its demolition equipment, creating a department to raze buildings would be “going around again in a circle.”

The city conducted demolitions in-house starting in the 1980s and continued until the early 2000s.

Other areas being examined include more cost-effective processes for fill dirt storage and usage, and bidding asbestos abatement and demolition separately, rather than packaging that work together.

Farkas noted that asbestos surveys for the properties can be costly. It’s not unusual, he said, to see a house with abatement costs that exceed the price tag of demolition. For example, demolition could run $6,000-8,000, with another $10,000 tackled on for abatement.

“... that is one of the issues we deal with,” he told the council.

Since May 2014, 7,608 properties in the city have been knocked down through various funding sources.

The city is averaging about 50 demolitions each week. By spring, officials hope to ramp back up to 125 to 150 per week, says Carrie Lewand-Monroe, the Detroit Land Bank Authority’s new executive director.

The demolition program is the centerpiece of the Duggan administration’s plan to deal with an estimated 40,000 blighted properties throughout Detroit.

At 125 knockdowns per week, those properties could be managed within six years, Lewand-Monroe said.

The program has been under scrutiny in recent months, following news reports questioning the bidding process, rising costs and the program’s true progress.

In 2014, demolition costs in Detroit under the federal Hardest Hit Fund program were around $14,000 per home. By 2015, that total increased to more than $16,000, Mayor Mike Duggan has said.

On Tuesday, Lewand-Monroe said the average cost for all residential demolitions conducted from September to December was around $13,800.

The average price per home was nearly 65 percent higher than it was under former Mayor Dave Bing, who had pegged the cost of tearing down vacant homes at about $10,000 apiece.

Duggan has defended the effort, saying the increases were tied to new environmental standards and protocols.

But the cost concerns prompted the council in October to request an audit of the Detroit Building Authority and land bank’s demolition activities.

A December report crafted by the council’s legal staff includes responses from the administration to questions about the program. The Legislative Policy Division notes it had “not vetted nor established the validity of the responses.” The legal staff stressed that a thorough audit would be the best route.

But the report added that based on the questions raised, increasing costs and media reports, “there appears to be high risk for impropriety, waste and abuse embedded in the city’s accelerated demolition process.”

Detroit’s auditor general Mark Lockridge said his office is evaluating the internal controls associated with the demolition program. If staff members uncover impropriety, he added, it will be handed over to authorities.

“We are aggressively performing our audit,” he said. “We have been doing it every single day and discussing it every single day.”

An October news report alleged that high-ranking members of the city’s building authority improperly met with local and national contractors to negotiate a pricing model for large-unit demolition work.

Duggan previously told The Detroit News that there was nothing unusual or improper about the bidding process for the bulk demolition initiative, a pilot program that was discontinued when it failed to lower costs.

The pilot’s pricing for bulk demolitions — 52 cents per cubic square foot — was crafted to increase production and attract large national contractors, officials have said.

Lewand-Monroe said 1,453 properties were demolished under the pilot before it was discontinued in 2014.