Wayne Co. approves ‘word-of-mouth’ property program

Christine Ferretti
The Detroit News

Detroit — Wayne County’s commission on Thursday agreed to a pilot program that will put tax-foreclosed properties in the hands of developers to keep them maintained and occupied, but the approval was not without controversy.

While the program involving nine agreements was favored by a 9-5 vote of the commission, many objectors said they weren’t comfortable with the “word-of-mouth” method of recruiting to bring in the involved nonprofit and for-profit groups.

“It doesn’t pass the smell test,” said Commissioner Glenn Anderson, adding the process was “flawed” and “rushed” before voting no on the plan. “It was not a fair process.”

Fellow Commissioner Diane Webb added she didn’t have problems with the organizations, but she was troubled that the process did not provide for equal opportunity.

“For me, it’s not how government should do business,” she said. “I think it sets a dangerous precedent.”

Cheryl Jordan, who heads the Wayne County Land Bank, which initiated the effort, said while proposals were not solicited for the pilot, she’s “100 percent confident” there were no conflicts.

With its approval Thursday, the commission agreed to exercise its right-of-refusal for about 140 properties and deed them over to the land bank. The move allows 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, the nine groups will be assigned anywhere from one property to several dozen based on financial capacity and experience. More than half of the properties are located in Detroit. Among the other locations are Trenton, Dearborn, Livonia, Canton Township and Westland.

“I am voting to give this a chance,” Commissioner Martha Scott said before Thursday’s vote. “Most of the stuff we do is not perfect because we are not perfect people. So I would hope that my colleagues would give this an opportunity.”

Commission Chairman Gary Woronchak said he had some reservations about the program but wanted to give it a chance, noting it only involves a small number of properties. Up to 8,000, he said, are headed to the county’s auction in September.

“Everybody’s goal should be, and everybody’s goal is to help people avoid foreclosure and stay in their homes,” he said. “That’s job one. This might be a better way of doing things. It might be disastrous, or it might be brilliant, we don’t know.”

The commission’s vote comes after a lengthy committee debate Wednesday over the selection of vendors and potential conflicts with some of the firms.

Jordan maintained after Thursday’s meeting that she didn’t have concerns but said the land bank does intend to retool the selection process and solicit a request for qualifications from interested parties next year.

This time, the groups were brought on by “word of mouth,” a move Jordan said was done in part due to the tight timeline and a lack of staff available to sort through hundreds of plans.

“We want to test the waters. ... Hopefully next year, we will absolutely start earlier in inviting folks to participate by public advertisement,” she said.

It was noted Wednesday that one of the organizations, Home Team in Detroit, employs Edna Bell, the mother of Commissioner Alisha Bell. Alisha Bell acknowledged the connection and abstained from voting on that agreement Thursday.

In another instance, former Commissioner Phil Cavanagh sat on the board for Team Cares in Dearborn, another organization selected for the pilot, Jordan said.

Jordan on Thursday said she contacted Cavanagh about the potential conflict and “he gave me guarantees that he resigned.” He did not speak with Jordan about the Team Cares proposal before that time, she said.

“Even if Team Cares had filled out their conflict of interest form and said ‘Phil Cavanagh was on the board,’ to me that wouldn’t have been a conflict. Wayne County is large,” said Jordan, adding Cavanagh works for the treasurer’s office, not the land bank, which is a separate legal entity. “I am absolutely 100 percent confident that there is no conflict with me or my staff.”

Cavanagh, who works on special projects in the treasurer’s office, said he had served on the Team Cares Board of Directors. But he resigned on April 3, within an hour of learning from Jordan the group was being considered for the pilot.

“I didn’t want any appearance of impropriety,” he said.

The time frame will “always be crunched,” added Jordan, since officials don’t learn which properties are going to auction until the end of June. The right of refusal typically must be exercised by the end of July. This time, the commission was granted an extension by the county treasurer until Thursday to consider the pilot program.

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 in escrow. The developers will pay delinquent taxes on the properties as well as penalties and administrative fees.