HIGHLAND PARK (WXYZ) - The 7 Action News Investigators are exposing a scandal; a neighborhood revitalization project that turned into a disaster. What was supposed to be a brand new subdivision was abandoned in mid-stream.
Now your tax dollars are being used to tear down homes that are only a few years old.
There are a lot of players involved, including at least two convicted criminals, and nobody has an answer on why things fell apart.
The project was supposed to transform a derelict section of Highland Park into a model neighborhood. But a lot of the homes were never built, many that were built are now abandoned, stripped or burned and many are already being demolished just eight years after they were built. So what went wrong, and where did the money go in this housing fiasco?
On a recent morning, the 7 Action News cameras were rolling as a huge piece of demolition equipment rolled up to an eight-year old home on Ferris Street in Highland Park. Giant metal jaws chewed into the top of the house tearing a gaping hole in the roof and shattering perfectly good windows. It was a scene that would leave you asking; what in the world is going on here? In less than an hour the house was reduced to a pile of rubble.
The demolition contractor usually tears down houses that are fifty or sixty years old, but something this new?
"Brand new dry wall, brand new doors, brand new windows, brand new everything, brand new insulation, everything. It's all in a landfill, gone," lamented Bill Koresky, the owner of Able Demolition.
It's not just one house. The Investigators counted 19 vacant, nearly-new homes, many marked for demolition, and heading for a landfill. What a waste.
"It's just to me, habitat for humanity could have come in and at least strip it before I rip it down," Koresky said.
The 7 Action News Investigators have been looking into this colossal failure for weeks, asking how it could have happened. Nobody seems to have the answers.
When it was conceived, planned and started, Highland Park was near bankruptcy and being run by the state. Then Governor Jennifer Granholm appointed a CPA, Ramona Henderson Pearson, to be the Emergency Financial Manager, and Fred Durhal, current state representative and Detroit mayoral candidate.
"It was a housing project that if it had not failed it would have changed the entire face of Highland Park," said Durhal.
The project started out small. A church in the neighborhood owned some property, both dilapidated homes and vacant lots, and they wanted to build about a dozen new homes on the land.
"We decided that, gee, it made more sense to build a new subdivision rather than just pluck a few houses down here in the middle of a bad looking area,” said Durhal.
North Pointe Village was an ambitious plan; put in 153 factory built homes. Durhal assembled the land, a builder and developer were hired and and a man named Aryeh Schottenstein would bring in private financing.
But shortly after dignitaries gathered for a ground breaking in 2005, there was a shake-up in Highland Park. Ramona Pearson was ousted as Emergency Financial Manager and replaced by Art Blackwell. Then Blackwell gave Durhal the boot.
Blackwell , who is currently on probation after pleading guilty to mismanaging funds while serving as the emergency manager, says the project was doomed from the start.
"When I went over there, I knew it couldn't work. Who would pay a hundred and twenty or thirty thousand dollars for that kind of home?” Blackwell asked.
Some homes had price tags as high as $155,000. That much money for an eleven hundred square foot house in an economically distressed area like Highland Park? On top of the high prices there were problems with the houses."They had no back door, they had no steps off the back door wall, and no garages," Blackwell said.
On top of that, the basements were flooding, and sub pumps were dumping water right along the foundations. Some homeowners had to run plastic pipes all the way to their back alleys to keep their yards from turning into swamps.
The homes weren't selling and before long, the project stopped in its tracks. Squatters, metal thieves and arsonists moved in. Now, many of the homes are being demolished and there are vacant lots throughout the neighborhood where the eight-year-old-homes have been torn down.
Fred Durhal has taken a lot of heat over this deal but he insists it could have worked if he was allowed to see it through.
"I think it was a good housing project. I just think that things happened somewhere along in the financing and what have you and it fell apart," said Durhal.
The project was privately financed. A man named Aryeh Schottenstein was the financier. Our investigation revealed that Schottenstein and several cohorts were running a house flipping scheme in Columbus, Ohio at the same time he was promising to bankroll the Highland Park project. According to press reports and a news release from the U-S Attorney’s office, Shottenstein and the others stole