Our editorial: Transparency is Job One in demo work
Detroit hopes to get another bundle of money from Washington to help it keep tearing down blighted buildings. The expanded federal pipeline of funds makes it all the more urgent that the city’s demolition programs operate under absolute transparency.
The new funds are expected to come from a $2 billion appropriation Congress passed last week to bolster the Hardest Hit Fund, a $7.6 billion program that has already sent Detroit nearly $130 million to aid its tear-downs.
Mayor Mike Duggan credits Michigan Sen. Debbie Stabenow for snaring the appropriation. Although Detroit’s dollar amount was not specified, the city has been a primary beneficiary of the Hardest Hit Fund, and the additional money is welcome.
Keeping those federal demolition dollars flowing is obviously a high priority for the city. That should also mean that erasing all questions about how the blight remediation programs are run should be a priority.
The Duggan administration has come under criticism for the rising cost of the demolitions. Under former Mayor Dave Bing, per-unit cost of tear-downs ran between $8,500 and $10,000. That cost has climbed to $16,400.
Duggan cites the rapid pace of the demolitions and the more environmentally safe methods now being employed.
Questions have also been raised about the so-called pre-bidding of contracts with a group of hand-picked contractors who met with the mayor’s team to settle on charges for the work.
That set off alarms with ADR Consultants, which was hired by the state to help Detroit select blight remediation contractors, and was supposed to provide some oversight of how the money is spent.
ADR refused to attend the meeting with the contractors in June 2014 and expressed its concerns about the pre-bidding to the state, according to a report by The Detroit Free Press. The firm, fired by the state last April, is suing the Michigan Land Bank and Detroit Land Bank authority for breach of contract. The lawsuits do cast some skepticism on ADR’s depiction of the bidding process.
But if the company’s assertion that it did not attend the sessions with contractors is true, it contradicts the mayor’s claim that the state was represented. The Michigan State Housing Development Authority approved the use of no-bid contracting, but acknowledges it was not at the meetings where the provisions were discussed.
Three companies — Adamo, Homrich and MCM Management — all of whom attended the meetings, dominated the early demolition work, winning more than $18 million of the first $31 million in competitively bid contracts, and another $20 million in no-bid work. The city also gave the three companies relief from some bonding requirements that other firms didn’t get. The city contends those were the only three companies that applied for the no-bid work, and had other firms wanted in, they would have received contracts as well.
The city’s auditor general is currently reviewing the demolition contracts at the request of the Detroit City Council. That’s a necessary step. The auditor should be scouring the contracting for any traces of favoritism.
There also should be an independent watchdog put in place with access to all of the contracts, and who is present at any pricing meetings with contractors.
It’s in the city’s best interests to keep the demolition program scandal free. State and federal dollars will not go to programs whose integrity is in doubt.