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Wayne Co. considers pilot program to rehab properties

Christine Ferretti
The Detroit News

Detroit — The Wayne County Commission is weighing a pilot program that would keep some tax-foreclosed properties from the county auction and put them into the hands of developers for rehabilitation.

The commission on Thursday is slated to take up a proposal from the Wayne County Land Bank that’s asking the county to exercise its right-of-refusal for about 140 properties and deed them over to the land bank. The move will allow the land bank to transfer the primarily residential properties to a mix of nonprofit and for-profit organizations to rehabilitate and develop.

Under the plan, nine groups will be assigned anywhere from one property to several dozen based on financial capacity and experience. Over half of the properties are located in Detroit. Among the other locations are Trenton, Dearborn, Livonia, Canton Township and Westland.

“We wanted to scratch the surface, make a difference and bring up real estate values in those areas,” Wayne County Land Bank Executive Director Cheryl Jordan told commissioners during a committee session on Wednesday.

The county will not spend any money to acquire the properties. Rather, the purchase and development agreements will require developers to place the minimum bid amount in escrow. The developers will pay delinquent taxes on the properties as well as penalties and administrative fees.

Commissioners, after lengthy debate, voted to move the proposal to the commission’s formal meeting for a vote on Thursday.

While some said they favor the plan, others raised questions over the selection of vendors, potential conflicts of interest with some firms, a lack of an intergovernmental agreement and how funds may be transferred.

Jordan, who took over as executive director in February, said the land bank did not issue a formal request for proposals for its pilot and identified participants by “word of mouth.”

The land bank and its handful of staff did not have the resources to sort through hundreds of proposals, she said.

That didn’t sit well with some, including Commissioner Diane Webb, D-Livonia, who cited bad deals arranged by the land bank in the past.

“I don’t really feel comfortable with the process here,” she said. “I don’t want the land bank to acquire properties and then it be a friends and family plan.”

But others, such as Commissioner Irma Clark-Coleman, D-Detroit, said moving forward with the pilot is a “no-brainer.”

“We get a chance to fix these houses and not kick these residents out and give them a first right to buy them,” said Clark-Coleman, who also sits on the land bank. “I don’t see a downside to this, and I support it wholeheartedly.”

The county has until Thursday to exercise its right of refusal for the properties to meet a deadline granted by the county treasurer.

If not, the properties will be among about 6,800 others countywide in the September tax foreclosure auction, according to figures provided by the Wayne County Treasurer’s Office.