Detroit City Council votes down $250M bond deal in blow to Duggan administration

Kat Stafford | Detroit Free Press

One day after hundreds of residents voiced their concerns, the Detroit City Council voted down a $250 million bond proposal Tuesday to tear down thousands of homes across the city through 2025.

The vote had been postponed at least three previous times because of various concerns and a blistering Auditor General report that outlined several problems with Detroit's demolition program. The City Council voted 6-3 against the bond. Council members Gabe Leland, Janeé Ayers and Scott Benson voted in favor of it.

The vote against putting the measure on the March 2020 ballot is a significant blow to Mayor Mike Duggan, whose administration has been heavily advocating for the proposal for several months.

Duggan did not outright acknowledge the bond rejection as a major political defeat for his administration, but he told reporters after the vote that he felt confident that if the measure were on the March ballot, the administration would have been able to show voters over the next few months that the city does "have the controls in place."

"But there was another perspective that was equally legitimate that before we go to the voters at all, we should show them what that new process is, we should show them it works, and go to the voters later on in the year," Duggan said.

"I respect the other perspective. And so, we're going to have to slow the demolitions down, temporarily. But we are going to sit with council quickly, come up with a process that people feel good about and hopefully move forward later in the year. I'm really confident that council and I can work out something that will take care of the problem."

When asked whether he has any regrets about how his administration has handled the demolition program, in light of many concerns raised by council and residents, Duggan instead pointed to what he believes are the successes of it.

"We've taken down 20,000 houses and in the areas where we've been, we've doubled the property values," Duggan said. "We've got some neighborhoods that have had very little demolition, they tend to be the forgotten neighborhoods, and I will never regret fighting for those neighborhoods. But I also respect the fact that I have nine City Council members that, you know, I admire and we need to find something where we all get along."

But there could be a chance the measure could come back before City Council next week, which is the final meeting before the body goes on its long winter recess until next year.

After the vote, City Council President Pro Tem Mary Sheffield attempted to ask for a waiver, which would have prevented the resolution from coming back in its present form but Councilman Andre Spivey voted against her request. This means the vote could technically be reconsidered next week, if a council member sought to do so.

However, it's not immediately clear when the administration plans to bring the measure, or a similar one, back to council. Duggan did not answer direct questions from the Free Press about whether the administration would try to bring the bond back before council for March 2020 or if it would push it to another ballot later that year.

"Again, I'm going to be on whatever timeline council has," Duggan said. "I thought Mary Sheffield made some very positive comments about coming back with a stronger proposal. And I think she's somebody that we can work with and certainly, if you look at her history, she has advocated on behalf of the poorer neighborhoods and the ones that have really been shortchanged on this program. ... So I don't know if it's tomorrow or it's Monday or it's in December. I'm not sure, (we're going to ) just sit down and work through the details."

Sheffield said she voted against the bond because of several issues that have surfaced with the program since its inception.

"I've been on council for six years and we really very rarely see that many people come out and actually support or are engaged in what council is doing," Sheffield said. "I think this issue resonated with so many people. It's not just the tearing down of homes, it's just, I think, so many issues with mismanagement," she said. "I think the community spoke loud and clear and council listened."

When asked why he voted no, Spivey said he didn't think it was "advantageous" to drag the discussion out further — particularly in light of the many concerns that remained.

"People want to know, can they trust the administration?" Spivey said. "Can they be transparent? Can we make sure that the work will be done properly and there's accountability? So, I think that can be done. If it can be done in a week's time, who knows. I think, if not by Tuesday, we should get it done sometime next year, and hopefully bring it back by November."

Councilwoman Raquel Castañeda-López said while everyone recognizes blight is an issue, she believes it's important that the city have a more complete plan to attack the root causes of blight.

She said she hopes the administration submits another proposal some time next spring or summer for voter consideration in November.

"Everyone knows that there are certain properties that have to be demolished right, but having demolition as the sole and main strategy to address some of the issues in neighborhoods is not enough," Castañeda-López said. "I would love to see a more thoughtful proposal come back and be presented to voters in November and I'm still open to the opportunity because I think we all know that we need more financial resources to be able to demolish houses."

Other concerns were raised during the heated Tuesday meeting by former Detroit City Councilwoman JoAnn Watson and Ombudsman Bruce Simpson, who shed light on a complaint his office received related to the demolition program.

"It verifies some of the negligence and problematic behavior we’ve seen within this demolition program," Simpson told council. "This report outlines that there was city work assigned to a city employee for demolition. That is highly problematic. That type of negligence cannot be tolerated. Something such as this hurts the program as a whole."

The complaint alleged that several emergency demolitions were awarded to Detroit Next, Inc., whose CEO Mark Green was a Detroit firefighter at the time the contracts were awarded, according to the report obtained by the Free Press.

According to the city's data portal, the company was awarded at least five demolitions, totaling $82,710. The city said the company has not been paid for the work performed, after the concerns were brought to light. Per the city charter, employees are not allowed to be awarded contracts for any city-related work.

Simpson said his office received the complaint on Oct. 8 and started investigating then. Green, according to the report, submitted retirement paperwork on Oct. 10, to become effective on Oct. 11.

Watson, who urged council to vote no, shared that her church recently received a $33,500 demolition bill after a shed next door was demolished.

"I remember approving demolitions ... entire brick homes for $13,000," Watson said. "I applaud the auditor general and his report. I want you to do the right thing. There needs to be no more money going to blight when there's a lack of accountability."

Read more: Detroit residents and City Council speak out on bond proposal during contentious meeting

Read more: Detroit City Council postpones $250M bond vote, citing serious concerns

While some residents urged council to approve the measure, Monday's public hearing and Tuesday's council meeting revealed that the mayor's bond proposal was far from a slam dunk with residents or council members. The meeting was briefly adjourned Tuesday to get the audience under control after a resident started shouting.

About 200 people — from residents to state elected officials — signed up to speak on the issue at the meeting. More than 500 were in attendance.

"If you can't be a steward for a little money, how are you going to be a steward for a quarter-billion dollars?" Detroit resident Georgia Cambell said Monday.

Duggan's administration has been advocating for the bond to achieve its goal of removing the city's residential blight by mid-2025.

If voters ultimately approve the bond proposal, the city would secure $250 million in unlimited tax general obligation bonds to continue Duggan's aggressive blight remediation efforts. City officials say about 19,000 buildings have been demolished since 2014.

The bond proceeds would help tear down an additional 19,000 properties and go toward renovating an additional 8,000 homes through Detroit Land Bank Authority sales and legal actions against privately owned vacant buildings.

Some of the bond proceeds would go toward rehabilitating houses, but not occupied homes. Rehab money would only be for vacant houses that are owned by the city or the Detroit Land Bank Authority, said Arthur Jemison, the city's group executive for housing, planning and development.

But Detroiters would see lower property taxes if the bond proposal is not passed, a council fiscal analyst said under questioning by Sheffield.

Residents' average property tax bill would decrease by about $60 a year if the bond proposal is rejected, said Irvin Corley, a fiscal analyst with the council’s Legislative Policy Division.

A handful of state legislators, including state Sen. Stephanie Chang and state Rep. Sherry Gay-Dagnogo, raised concerns to council in letters submitted to council ahead of the vote. Chang raised environmental concerns about the city's demolition program.

According to Chang, the city has received at least 10 asbestos violations related to the program this year.

Chang noted the violations come after the city entered into a consent order last December with the State of Michigan regarding more than two dozen violations of the National Emission Standards for Hazardous Air Pollutants related to asbestos abatement. Chang said it was "highly disappointing" to learn of the violations.

"What is most frightening is that we may not know the full public health impact of the asbestos exposure until years from now," Chang wrote. "Mesothelioma can result even just from short term exposure to asbestos. ... Symptoms often do not show until 20 to 50 years after exposure. How many children have lived or played near demolished homes that had improper asbestos abatement — whose lives will be affected decades from now because we didn’t properly protect their health?"

Gay-Dagnogo said the citizens of Detroit deserve "transparency and information on how this bond sale will impact them."

"I believe a false narrative has emerged during the bond discussions which suggests that if this bond fails, demolition will come to a halt, we know that's not true," Gay-Dagnogo said.

Kat Stafford is the Detroit government watchdog reporter for the Free Press, covering city issues and the community. A Detroit native, Stafford is vice president of the Detroit chapter of the Society of Professional Journalists. She was recently named an Ida B. Wells Fellow, a national investigative reporting fellowship. Contact her at kstafford@freepress.com or 313-223-4759.