Blight developer drops out, says Detroit wanted control

Tom Greenwood and Christine MacDonald
The Detroit News

Detroit — The city of Detroit likely will gain control of more than 6,000 mostly dilapidated properties, after private developers pulled out of deal to buy them.

One of the businessmen, John Page, said the deal collapsed because it became clear Detroit wants to control the land that includes about 2,000 vacant lots, 3,000 properties that needed to be demolished and 1,000 salvageable homes.

“They had their game plan more or less set,” John Page, owner of Eco-Solutions who bid on the properties, said Wednesday. “Ultimately, they wanted to control (the properties).”

The comments came hours after Wayne County treasury officials announced Page withdrew his $3,183,000 bid for the properties at a tax auction that ended last week. He was the sole bidder of the land and was partnering with Detroit businessman Herb Strather, who announced last week he wanted to develop salvageable properties and demolish dangerous ones in the next five years.

The so-called “blight bundle” was packaged in an online auction designed by treasury officials and Mayor Mike Duggan to discourage land speculation. The sale required treasury officials to sign off on redevelopment plans and proof that properties would be demolished or rehabbed within six months.

Wayne County Chief Deputy Treasurer David Szymanski said the deal collapsed in part because the city wouldn’t agree to use federal money to demolish properties in the bundle. City officials say the money can’t be used on private property.

Szymanski said the properties are now expected to be offered in the next two weeks to the city. They’ll likely go to the Detroit Land Bank to be razed or resold. That would have also been their destination had the parcels gone unsold at auction.

Page said he and Strather still want to work with the land bank to buy smaller number of properties in select areas of the city, particularly the neighborhood surrounding Grand River and Greenfield. They hope to purchase about 1,000 properties there with the land bank’s help.

“We are going to find a way to work with the city,” said Page, a Texas businessman who has contracts with U.S. Department of Housing and Urban Development to maintain foreclosed properties in Michigan and other states. “We’ll take a smaller role. It was an agreement all around.”

County Treasurer Raymond Wojtowicz released a statement saying “while we were not able to reach agreement as to a development agreement, we do look forward to continued participation by Eco-Solutions as we work with Mayor Duggan to address blight in our neighborhoods.”

The winning bid attracted scrutiny because of debts from Strather, a one-time casino investor who was involved in the Woodbridge Estates development and was a major owner of the Hotel St. Regis that went into receivership in 2009.

Strather has at least $300,000 in recent tax liens and court judgments. Among them: $24,000 for unpaid rent and fees for a Riverfront Towers apartment that he lived in until 2010 and $25,000 to a Detroit pastor who alleges he wasn’t paid for a failed investment.

Money wasn’t a sticking point, Page said.

“We had the capacity,” Page said. “That didn’t have anything to do with it.”

He said he expects the county to return a 10 percent deposit paid last week.

Strather could not be immediately reached for comment.

TGreenwood@detroitnews.com

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