Text messages reveal illegal dumping by Detroit demo contractor

Kat Stafford | Detroit Free Press

A contractor in Detroit's demolition program is under investigation and has lost more than $3.3 million of work it was set to receive after text messages revealed it was responsible for several large piles of dirt and materials illegally dumped by a subcontractor on a woman's property in April.

The company, Den-Man Contractors, initially denied any wrongdoing to the city but documents obtained by the Free Press indicate a Detroit Police Department investigation found that the company was aware.

The investigation into the Warren-based company was launched by Detroit's Office of Inspector General in mid-May after a number of performance issues prompted the city to refer the matter to the office for investigation.

Officials said last year that illegal dumping costs the city $4 million a year in cleanup costs.

As a result of the issues, Den-Man was deemed ineligible to receive millions in demolition work to tear down 195 homes, Detroit Building Authority Special Projects Director Brian Farkas confirmed. The company also had to pay to properly remove the dumped materials and restore the resident's property, Farkas said.

According to award packages posted on the Detroit Land Bank Authority's website, the company was the lowest bidder on five packages, but the awards were later spread across two other companies — Able Demolition and DMC Consultants.

"Awards are not decided by price alone," Farkas said in a statement. "...In this case, the contractor was determined to be ineligible for award because of a number of performance issues. Some of those performance issues triggered a referral to the OIG (office of inspector general.) All additional questions related to the OIG should be referred to the OIG."

Despite the pending open investigation, Den-Man has since been allowed to resume bidding after being under a stop work order in connection with the issues.

A recent contract totaling $14,770 for an emergency demolition on the city's west side was referred to the Detroit City Council on Monday for approval.

The inspector general investigates cases involving waste, abuse, fraud or corruption and is an independent agency with subpoena powers. In the past two years, the office has investigated three other contractors — Direct Construction, Rickman Enterprise Group and ABC Demolition for various problems.

"We do have an open investigation on Den-Man," Deputy Inspector General Kamau Marable said, adding that his office received a complaint around May 12. "We can't comment beyond that."

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The office's investigation could lead to further action being taken against the company.

Den-Man has completed about 421 demolitions in the city and has been awarded numerous contracts through a federally funded demolition program, as well as demolitions fueled by city dollars.

The company did not immediately respond to a request for comment.

Overall, more than $258 million in federal Hardest Hit Fund dollars have been earmarked for the city since the Detroit Land Bank began its targeted blight remediation effort in 2014, when Mayor Mike Duggan came into office. It is one of the largest pools of federal dollars disbursed to Detroit in recent memory. The city only has until 2020 to spend the Hardest Hit funds.

Of the 40,000 blighted buildings Duggan said he hoped to tear down, roughly more than 25,700 remain.

Late last year, Duggan and Police Chief James Craig rolled out a new hidden camera program to catch illegal dumpers in Detroit. Craig said last year that crews on average remove more than 500 tons of illegally dumped materials weekly across the city.

In a May 14 citation letter to Den-Man President David Holman, Detroit Building Authority Deputy Director Tim Palazzolo wrote that a Detroit resident observed two trucks, marked "Dani's Truck," dumping dirt on her property without her permission.

The trucks are owned by Dani's Transport, a large hauling company that has three locations across southeast Michigan. A company manager reached by phone told the Free Press he would call back later to comment.

The woman's property was adjacent to an approved demolition site at 3760 Kendall on the city's west side. Den-Man was paid $38,060 in non-Hardest Hit funded dollars to demolish a structure there, according to city records.

"Den-Man Contractors verbally denied any responsibility for the dumping of materials on the resident's property and the DBA then referred the matter to the Detroit Police Department," Palazzolo wrote. "However, during the investigation of the resident's complaint ... DPD obtained a text message sent from Den-Man to Dani's Truck which requested six loads be delivered to 3760 Kendall."

According to text messages released to the Free Press, an employee, identified only as Denman Dave, requested the piles of dirt.

"Addresses??????," a Dani's employee texted to the Den-Man employee.

"3760 Kendall. Six loads. 20192 Prairie is open, can take maybe 5-6 loads," Denman Dave texted.

According to the city, Den-Man is "responsible for (the) actions of its subcontractors and specifically responsible for the materials" dumped on the woman's property.

"Storing/staging material on adjacent properties is a violation of ... the scope of services," Palazzolo wrote.

The company received a total of four discipline letters on May 14, including one for improper storing and staging of backfill materials.

The company submitted a corrective action plan to the city on May 14 but Palazzolo noted it presented "no real corrective action to avoid any future miscommunications."

Since the source of the materials was unknown, the DBA required Den-Man to hire an environmental professional to collect one soil verification sample from each pile and submit the samples to a qualified laboratory.

Farkas said he doesn't believe the dirt was contaminated but said whenever illegal dumping occurs, the city requires testing to ensure proper disposal.

The company was required to cover the piles in plastic sheeting and to install a fence to prevent wind from dispersing the materials in the air.

Den-Man also had to remove the material from the site under the supervision of a DBA field supervisor and dispose of the material in a landfill. The company had to properly backfill the open hole, as well.

According to the company's website, it "has a reputation for taking on the toughest jobs and completing them ahead of schedule" and takes "pride in maintaining a safe, clean, and efficient job site to minimize the impact of such work on the neighbors."

"Per policy, a vendor has an opportunity to cure (fix the problem)," Farkas said in a statement. "In this case, we were satisfied with (the) cure and Den-Man is able to bid again. ... We take illegal dumping very seriously."

Freep

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