Editorial: Hold off on Detroit blight-fighting bonds

The Detroit News
Demolition of an unoccupied house on May 19, 2016

While the rejuvenation of Detroit’s downtown is on full display, a drive through many of the city’s neighborhoods highlights how much work still needs to be done. So it’s good Mayor Mike Duggan wants to accelerate the fight against blight.

But a new proposal to issue bonds to demolish all of the derelict structures at once is premature; the mayor first should establish trust that he is capable of efficiently running a program that has been riddled with corruption and cost overruns during Duggan’s tenure.

The mayor wants to put a $250 million, 30-year bond issue before voters in March to continue the city’s blight-fighting work. The mayor says this funding would rid the neighborhoods of abandoned and crumbling homes within five years. Under the new proposal, Duggan says he would save as many structures as possible, which would take an average $15,000 to $20,000 for renovation. 

More:Duggan pitching $250M bond issue to wipe out blight by 2025

The $265 million in federal funding the city had used to tear down vacant structures is nearly gone, and Duggan says the work is only half done, with roughly 19,000 additional vacant houses in need of demolition or restoration.

For five years, money was allocated through the U.S. Treasury Department’s Hardest Hit Fund. 

Given all the troubles that arose with the city’s handling of that federal demolition money, residents should question whether to approve such a sizable commitment. 

Since the demolition program launched in 2014, it became subject to state and local reviews, in addition to a federal criminal probe following reported concerns over rising costs and bidding practices.

That federal investigation led to guilty pleas in April from two individuals who admitted to accepting hundreds of thousands of dollars in bribes and rigging bids for demolition projects.

The Department of Justice signaled it doesn't expect to bring additional charges against public officials for mishandling the blight funds. 

More:Feds don't expect more public officials to be charged in Detroit demo probe

And Duggan is ready to move ahead. 

"We feel like we have an obligation as a city to get every abandoned house out of every neighborhood," Duggan told The Detroit News this week. "This is the proposal that will do this." 

A City Council subcommittee must now review the proposal. City officials contend that since Detroit has paid off other general fund bond debt, it could seek the additional bond funding for blight without raising taxes.

Yet in addition to the risk of taking on more debt, this is also a question of trust.

Earlier this year, Duggan said the city is moving its demolition efforts from the Detroit Land Bank Authority to a city-administered program. The Hardest Hit Fund had required an agency outside city government to run the program, and Duggan says the Land Bank was never equipped to manage such a large undertaking.

That very well may have contributed to the program’s initial shortfalls, but the city should take the time to prove the overhauled effort will do a better job of safeguarding funds before asking voters for such a large investment.