Detroit contractor faces suspension after demolishing wrong house

Detroit's largest contractor in its demolition program is facing suspension from the federally funded program after it tore down the wrong home, the Free Press has learned.

Officials said the Detroit-based Adamo Group could be suspended for 90 days. The company has seven days to appeal the suspension.

The home that was supposed to be demolished was right next door, officials said.

Earlier Wednesday, the city said the suspension was already in effect. The city later amended its statement to say, "If they do not challenge it within 7 days, Adamo will be suspended from the bidding process on all demolitions for the 90 days."

"Any time one of our demolition contractors commits a serious violation, we act immediately to address it," Detroit Building Authority Special Projects Director Brian Farkas said in a statement to the Free Press. "In this instance, an Adamo Construction crew informed us that it had mistakenly knocked down a Land Bank-owned house at 5792 Holcomb that was also in the demolition pipeline but not the house under contract for demolition. The property it should have knocked down was next door."

According to Detroit Building Authority field notes obtained by the Free Press, Adamo was under contract to demolish a home located at 5798 Holcomb, which was abated. The house that was actually demolished was not abated, raising concerns about potential asbestos exposure. It's not immediately clear whether asbestos was present at the property.

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"No asbestos survey had been conducted on the house at 5792 Holcomb prior to it being knocked down," Farkas said. "We immediately turned this matter over to the MDEQ for follow up."

The MDEQ can hold both contractors and the property owner equally responsible for potential asbestos violations.

"They found that they demolished the wrong house after contacting BSEED (Buildings, Safety) for an open hole inspection," the notes say. "BSEED inspector questioned if it was the right location, which led to discovery of (the) wrong house demolished."

Farkas called the violation "unacceptable" and said: "This is the same action we take for any company based on an infraction of this nature. Adamo has the right to appeal our decision as a part of our due process."

According to an April report from SIGTARP — a federal watchdog agency — Adamo has received more than $35 million of the $258 million awarded to Detroit in Hardest Hit funds, the largest amount of any contractor within the program.

The Hardest Hit Fund was originally created as part of the Troubled Asset Relief Program during the last recession to pay for programs to help keep people in their homes, with Michigan initially getting an allotment of $498 million. The program was expanded over the years to allow funding – with federal approval – to be used to pay for tearing down abandoned blighted structures as a way to stabilize neighborhoods.

Farkas said Adamo has completed more than 3,200 demolitions without any Michigan Department of Environmental Quality violations.

In a violation letter obtained by the Free Press, Detroit Building Authority Deputy Director Timothy Palazzolo notified Adamo of the impending suspension on May 10, saying it has the right to appeal.

Separately, Homrich, the city's second-largest contractor within the program, received citations on Feb. 23 "for properties over 120 (days) since Notice to Proceed," said John Roach, a spokesman for the mayor's office. Homrich was cited because it failed to demolish homes within the time frame specified in their contract.

Homrich, according to SIGTARP, has received about $31 million of the Hardest Hit Funds that have been disbursed so far to Detroit.

Smalley Construction has also been suspended from the program until June 18 for issues stemming from a demolition at a property located at 4701 Chene.

In a health and safety violation letter sent to the company, the building authority said Smalley failed to use water during the demolition process and failed to fence the demolition site. Water is used to keep dust under control.

The city also said Den-Man Contractors, as of Monday, had received four letters of "discipline/disappointments." They cover a variety of issues, including commencing demolition activities before receiving a notice to proceed.

And late last year, Blue Star Demolition received two letters of discipline on Oct. 26, for failure to enter required information into an invoicing program the demolition program uses.

Mayor Mike Duggan made waves shortly after he was elected in 2013 by embarking on an effort to tear down 40,000 blighted buildings in neighborhoods. City officials have said nearly 14,000 homes have been demolished so far.

Adamo's potential suspension and Smalley's confirmed suspension come nine months after two other contractors— Direct Construction Services and Rickman Enterprise Group — were suspended for submitting doctored photographs of sidewalk repairs at work sites in an attempt to get paid.

Direct Construction Services turned in five doctored photographs, the Free Press previously reported, and is suspended from the program until 2020 or when the demolition program's federal funding ends, whichever is later.

Rickman Enterprise Group officials at the time blamed the falsified photo on an “inside joke” by an unidentified worker who accidentally sent it to the Detroit Land Bank Authority. Rickman initially was suspended from bidding and contracting for 90 days and has since been allowed to bid in the program again.

The Land Bank requires demolition contractors to submit sidewalk photos with invoices for payment to ensure sidewalks aren't left destroyed at work sites where vacant homes are being taken down.

Since June 2016, 13 contractors have been suspended for a variety of reasons, including mishandling asbestos and leaving an open hole at a demolition site for more than 30 days, the Free Press has previously reported.

Contact Katrease Stafford: kstafford@freepress.com or 313-223-4759.

Reporter Joe Guillen contributed to this report.