Politics

Detroit Owes Demolition Contractors Millions of Dollars

March 16, 2018, 7:08 AM

The demolition program, one of the centerpieces of Detroit Mayor Mike Duggan's plan for improving the city, continues to experience problems.

Demolition contractors who have torn down thousands of blighted homes have yet to be paid millions of dollars by the Detroit Land Bank Authority, writes Katrease Stafford of the Detroit Free Press. In some cases, contractors have been waiting for payment longer than a year.

The Freep reports:

The dispute has raised concerns the delay could put small contractors out of business or lead them to drop out of the city's demolition program at a time when Mayor Mike Duggan has announced an ambitious plan to demolish, board up or renovate every single abandoned home in the city by the end of next year.

While Detroit Land Bank officials rebuffed claims that up to $8.7 million has been delayed because of issues stemming from within the agency, officials from the Michigan State Housing Development Authority said in a statement to the Free Press this week:  "It appears the backlog is currently in the DLB office in getting us invoices for review."

Land Bank officials said the delay is for a variety of reasons, including incorrect invoices from contractors. 

“I think to say that we should be measured on the time it takes us to pay on an invoice when they are not submitting accurate information and we are prohibited from being reimbursed on that property is extremely disingenuous,” Land Bank Executive Director Saskia Thompson tells the Freep. “… I am sympathetic to the fact this is a very complex process. These are businesspeople, they need to get paid and we will do everything in our power to pay them quickly, but I am not going to pay them when the information is wrong.”

The demolition program has come under the scrutiny of law enforcement.

Last week, the Free Press reported that the FBI has reviewed a report suggesting bid-rigging and collusion among Detroit demolition officials and contractors. 

Contractors’ bids to tear down Detroit’s blighted homes were manipulated, the documents say, as part of a scheme concealed from state overseers yet known by Dave Manardo, Mayor Mike Duggan’s group executive for operations.

The mayor's office last Friday disputed that Manardo knew of the bid manipulation scheme and downplayed the documents' significance, saying issues they raised already have been resolved with the state. 


Read more:  Detroit Free Press


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