Detroit Land Bank reaches deal with contractor over environmental violations

Christine Ferretti
The Detroit News

Detroit — A contractor penalized for violating rules in Detroit's federally funded demolition program has notified the city it intends to correct the problems.

Chicago-based McDonagh Demolition was ordered last week by the Detroit Land Bank Authority to replace soil at 16 demolition sites based on testing that revealed dirt used to fill holes where homes once stood exceeded acceptable levels of mercury, chromium and lead.

Chicago-based McDonagh Demolition was ordered in 2019 to excavate this site in the 13000 block of Maiden Street in Detroit after it was discovered that some demolition materials there had not been properly removed.

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The company told The News last week in a statement that despite obtaining the soil for the sites from a "commonly used" city supplier two years ago it was "prepared to take appropriate action."

The company used the soil to fill and level lots after razing houses.

"We have received written confirmation from McDonagh that they will perform the required Corrective Actions," the land bank said in an email. "In addition, administrative work on their end to start the process (such as getting approvals for disposal) have already begun so progress is being made."

McDonagh has an April 2 deadline to remove and replace the soil. 

“Weather permitting, McDonagh intends to complete the work according to the timeline issued in the corrective action plan," the company said in a Thursday statement. 

Land bank officials learned last summer that McDonagh failed to submit topsoil invoices for a handful of homes it tore down. The missing paperwork sparked an internal investigation into the source and safety of the soil used.

Detroit's federal program has a history of controversy and in recent years some city, state and congressional lawmakers raised concern over the potential of environmental contaminants in the dirt used at city demolition sites following a number of high-profile contractor violations, including by McDonagh.

The city is withholding $223,000 in federal demolition funding earmarked for McDonagh until the corrective work is done at the company's own expense. If McDonagh declined to handle the fixes, a portion of those federal dollars would have been used to hire another company for the work.

The land bank, in consultation with state regulators, has determined the dirt in question presents "No near-term health risk." 

An assessment of McDonagh's inventory of 89 demolition sites concluded dirt at eight of them exceeded acceptable limits and results from another eight sites were inconclusive.

The troubles are the latest for McDonagh which first had its projects in Detroit halted in February 2019 over claims it violated rules for filling holes at a handful of other sites. 

After that incident, the company was barred from taking part in any additional demolition projects in Detroit paid for with federal Hardest Hit dollars. 

The corrective work for the McDonagh sites delays the final reimbursements coming to Detroit under the federal program. The city has until the end of June to close the program and land bank officials said they remain confident that deadline will be met. 

The initiative, jointly overseen by the land bank and Detroit's Building Authority, took down 15,084 blighted houses in the city with $265 million in federal Hardest Hit funds beginning in the spring of 2014.

The city's federal demolition program came under scrutiny in the fall of 2015 over bidding practices and soaring costs. It has been the focus of city, state and federal reviews and investigations. In spring 2019, two men involved in the program pleaded guilty to rigging bids and accepting hundreds of thousands of dollars in bribes.