Gilchrist ailing Detroit apartment building sold for $190K

Candice Williams
The Detroit News
253 and 257 Marston Street in Detroit. The property was bought in 2016 by Garlin Gilchrist II from the Detroit Land Bank Authority.

Detroit — The fire-damaged Detroit apartment building Lt. Gov. Garlin Gilchrist owned has been sold.

The eight-unit apartment building at 253 Marston near the New Center area sold for $190,000 to Detroit Renaissance Fund LLC, said Alyssa Strickland, spokeswoman for the Detroit Land Bank Authority, which had to approve the deal. The sale closed Feb. 21.

The listed buyer is essentially a shell company with scant public information. The registered agent is listed as Incorporating Services Ltd. with a Plymouth address, and it was organized under Delaware law and managed by a corporation company out of Florida.

In a Michigan filing, the company described its business plans as "rental or residential real estate.”

“We are excited about the fact that I get to serve the people as lieutenant governor,” said Gilchrist on Thursday following his keynote address at the Detroit Policy Conference. “That sale has happened, and we were able to close.”

Gilchrist bought the building from the land bank for $13,500, taking advantage of a 50-percent discount as a city employee in 2016. He will not owe any money to the land bank because he sold it at a loss after spending about $226,000 trying to restore it.

Gilchrist’s office has said he has been focused on his new role as lieutenant governor.

The building became an issue during the fall campaign with Gov. Gretchen Whitmer when neighbors complained about the eyesore.

At the time, Gilchrist said he made progress on the renovations, but that it wasn’t in the condition he wanted it to be in. He said he struggled to get loans.

A government official selling to a shell company could raise some concerns, said Craig Mauger, executive director of the Michigan Campaign Finance Network.

“The potential risk is someone could be selling a property for over what it’s worth and that could be a benefit to a public official,” he said. “It could be a potential concern that someone that has interest in public policy that could be before the gubernatorial administration could be purchasing the property.

"... That’s why transparency is important. Knowing who is behind the entity would be a critical piece of information.”

Mauger said the reason the property came to the attention of the public was because of the campaign. Michigan is one of two states in which state officials aren’t required to file personal financial disclosures. The other is Idaho.

“This is a situation where we knew he was selling the property,” Mauger said. “Most frequently, we don’t know anything about instances like this. This sale could be perfectly legitimate and totally be on the up and up. If there was someone that wanted to take advantage of the secrecy of the system, you could see how someone could. We know a sale has taken place. That’s at least a positive thing. To dig around and find out who is behind the LLC, that’s the fun part.”

Gilchrist was delinquent in 2017, his first year owing taxes on the property, when he failed to pay his summer and winter bills on time. The delinquency prompted the city of Detroit to send Gilchrist's case to Wayne County for collections, but Gilchrist paid off $935.18 in delinquent taxes and fees on June 5, 2018, according to county records.

He also was late, but not delinquent in paying his 2018 property taxes.

Strickland said the new owner must adhere to the terms of the original purchase agreement, including compliance requirements.

Twitter: @CWilliams_DN