Is condemnation next for dilapidated house near Little Caesars Arena?

Allie Gross | Detroit Free Press

The owners of a ramshackle house on Cass Avenue in downtown Detroit had been hoping to find a buyer willing to pay more than $4.5 million for it because it sits next to the new Little Caesars Arena.

But that plan may change now that its owners apparently owe thousands in blight violations and the City of Detroit is considering condemning the property.

"As you can see from the history of this property, our inspectors have written numerous blight tickets over the years," David Bell, director of Detroit's Buildings, Safety Engineering & Environmental Department, said Tuesday when asked about the property, which recently was relisted at $4,790,000.

While Bell said none of the violations have "risen to the level that would cause us to condemn the building," the city is now "considering that action" based on the owners' failure to respond to an emergency order issued on March 23 seeking access to the inside of the property to inspect fire damage.

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"In the absence of a response, we may have no choice but to declare the house unfit for occupancy," said Bell, who noted that he expects to have a decision this week.

Since 2009, the owners of 2712 Cass Ave. have accumulated 50 blight tickets with violations ranging from the unlawful occupation of a rental property without lead clearance (a $4,000 fine) to the allowance of bulk solid waste to lie on or about the property (a $1,000 fine).

According to Detroit's Blight Violation portal, the city has put the house in collections for six of the claims — a value of $4,530. However, on Tuesday, following Detroit Free Press questions on the amounts owed, Miriam Blanks-Smart, the director of administrative hearings with the city, said the city is looking to collect on more than just those six claims.

"The city, through its third-party collections agency, has been preparing to proceed with a garnishment action against the owners of 2712 Cass Ave. in the amount of $49,680 for 39 individual blight tickets," said Blanks-Smart. "We expect this action to be in place within the next two weeks."

News of the potential condemnation comes as the owners of the house — C M & S Family Limited Partnership, which bought the house for $25,000 in June 2002 — continue in their quest to turn a profit on the property.

Last month, real estate agent Darren Johnson of Johnson Premier Realty Co. relisted the structure at $4,790,000 — a roughly $200,000 decrease from a March 2017 listing of $4,999,999.

"Blight tickets or not, they're selling the property as-is, they're really not selling the property — they're selling the lot, the location," said Johnson, who said he was unaware of the blight tickets but did not think it would hinder the sale.

"Can you condemn a home when someone is living in it?" Johnson asked, referring to the one tenant who stays in the house rent-free to protect the property from scrappers.

"I don't know, I haven't seen the blight tickets. That's not in my expertise," he said. "I'm not handling that part."

The Detroit Free Press attempted to reach Thomas Corley, the listed principle on C M & S Family Limited Partnership's 2002 filing with the State of Michigan. The voicemail box associated with his name, however, was full.

The house has been one of the most talked-about properties in Detroit. The two-story duplex with peeling beige paint, a patchy roof and a porch littered with children's toys is one of the last remaining structures in a neighborhood that has slowly been engulfed by Olympia Development-based projects, most notably, Little Caesars Arena.

According to Johnson, before he was retained last year, Olympia Development, owned by the Ilitch family and which built the new arena, attempted to purchase the property.

"The owners did say they were approached a while back and they didn't take the offer," said Johnson.

The Detroit Free Press also reached out to Olympia Development for comment but at the time of publication of this story had not heard back.

Built in 1880, the house is a remnant of Old Detroit and highlights the perils of placing a monetary value on property in a rapidly changing neighborhood.

What is the magic number that will lead to the sale of the property and officially transition the lower Cass Corridor from Old Detroit to redeveloped, sports playground? More importantly, what happens to a property while a speculator waits for the right deal?

In the case of 2712 Cass Ave., the property has begun to deteriorate, with signs of distress visible from a 2013 electrical fire and years of neglect.

Johnson acknowledged the degradation, and noted that potential buyers have not even been allowed to enter the house. He said he and the owners believe the house's condition is ultimately irrelevant.

"Whoever buys it will tear down and put up something brand new," said Johnson.

In May 2016, the house was taken off the market after failing to sell at $4 million. In March 2017, the house was re-listed at nearly $5 million ($4,999,999 to be exact). Johnson told the Detroit Free Press at the time that the $1-million jump in asking price reflected the increase in value after the Pistons announced in November 2016 that they would leave the Palace of Auburn Hills to join the Red Wings at the new Little Caesars Arena. After struggling to find a buyer at that price, the owners dropped the price last month.

As the price of the house has vacillated between $4 million and $5 million, the actual structure has remained almost untouched.

"The Law Department is very familiar with this property and late last week started preparing a nuisance abatement action against the owners, which we will file soon," Lawrence Garcia, corporation counsel for the city, said Tuesday.

Garcia says his office will seek a court order compelling the owners to bring the property into compliance with city code within an appropriate period of time, based on the existing conditions.

"Typically, owners in a nuisance abatement suit need to obtain the necessary permits for the work within 30 days of the court order and to start work within 60 days of the order," said Garcia, noting failure to comply with a court order could result in contempt proceedings against the owners before a Wayne County Circuit judge.

"One potential remedy for noncompliance, which is within the discretion of the court, would be to award the property to the City of Detroit," he said.

Awarding the property to the city would make the property far easier for a company, such as Olympia Development, to obtain.

This fact creates something of an irony as Olympia Development has been called out in the past for sitting on nearly 70 properties as it waited for the right moment to proceed with the arena project.

"It took us 15 years to accumulate the property so we can achieve this transformative project,” Chris Ilitch told the Detroit News last fall. "It's been painful to not be able to develop some of that property because every time we made a move, the price for other property would shoot way up. But we had to wait, and that hurt.”

Contact Allie Gross: AEGross@freepress.com. Follow her on Twitter @Allie_Elisabeth.