Editorial: Land Bank must be more transparent

The Detroit News

Questions continue to swirl around the Detroit Land Bank Authority’s costs and bidding practices, and last week the FBI showed up at its offices to collect documents related to federal criminal investigations of the program.

The authority says it is fully cooperating with the various agencies involved in the probe, but more transparency is absolutely needed. The authority and Mayor Mike Duggan’s office should be immediately forthcoming with all information relevant to Detroit taxpayers, the state of Michigan and federal investigators.

Detroit’s federally funded demolition program has been under review since last fall. For two months late this summer operations were fully suspended by the U.S. Treasury — which allocates the funds being used to demolish homes under the program — due to a probe conducted by the Michigan Homeowner Assistance Nonprofit Housing Corp. and the Michigan State Housing Development Authority.

However, neither Detroit City Council nor the public was informed of the suspension until after the fact.

Land Bank Executive Director Carrie Lewand-Monroe told the council this fall that the authority believed the suspension would be short, and also that the Michigan State Housing Development Authority asked the land bank to keep the action quiet.

But MSHDA disputed that assertion before the council, raising questions about the land bank’s commitment to transparency.

That came after months of inquiry into potential conflicts of interest between the city and executive leadership of the Detroit Building Authority.

Costs within the city’s blight program spiraled when Duggan took office. Under the Hardest Hit program, demolition costs increased from an average of about $13,600 per house in 2014 to about $16,400 in 2015. The administration contends better environmental and site remediation practices drove up the costs.

A separate audit commissioned by the land bank found that when the cost per house exceeded the state limit of $22,500 per house, land bank officials would assign the extra costs to a home that was cheaper to tear down, masking the overrun.

That kind of false representation is reminiscent of old Detroit, and shouldn’t be a part of a city rebounding from bankruptcy and decades of corruption by city officials.

That same audit revealed mistakes over a nine-month period between June 2015 and this past February that included incorrect records, errors with bids and almost $1 billion in bills to the state that were wrong. The city must repay the state that money.

The land bank has held a lot of promise for Detroit’s enormous blight problem. It has made considerable progress in boosting the city’s neighborhoods and image.

But these sorts of irregularities don’t give residents or potential newcomers confidence that corruption and underhanded dealing has been chased out of Detroit.

Full cooperation with investigators and broader transparency will help the land bank move past this ugly turn of events and get on with the important work of cleaning up Detroit.