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Despite 'red flags,' Wayne County commission approves land deal

Posted: 4:42 PM, Aug 23, 2018
Updated: 2018-08-23 22:55:08Z

The Wayne County Commission today narrowly approved a controversial land deal that opponents say will come at a cost to taxpayers while yielding huge profits for developers.

The pilot program was green-lighted by commissioners despite numerous "red flags" from the commission's financial advisors.

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"I really have a problem with just uniformly approving things that our staff tells us there are serious problems with,” said Commissioner Glenn Anderson.

The program, pushed by County Executive Warren Evans’ office, takes hand-picked foreclosed properties out of the county’s property auction and into the hands of developers, some of whom have close county ties.

The CEO’s office says the experimental program, which first started last year, will prevent speculators from buying foreclosed homes and failing to fix them up. It also requires investment from developers to fix up the properties and will allow some to continue living in their homes.

“I do believe that this will help,” said Commissioner Martha Scott. "No, it’s not perfect. There’s so many things that are not perfect. But we can work on that.”

But a commission analysis says the program will do little to prevent blight because the properties involved are the county’s most desirable foreclosed homes and would likely yield the biggest price at auction.

“The treasurer's auction loses money, so the county loses money,” said Commission Chairman Gary Woronchak, who voted against the deal. “To suggest that this is somehow going to control blight ignores the fact that these are the very best properties that are not likely to be taken and held for speculation.”

A Detroit home on Sorrento Street cost a developer $8,256 last year, the price of its unpaid taxes. The company invested more than $53,000 in the home, then sold it for nearly $110,000, netting a $46,421 profit.

A condo in Detroit’s Harbortown was sold to another developer for under $19,000. The company put in about $53,000 in improvements and sold it this summer for $280,000.  The profit for that one sale: $207,784.   

All told, the 26 properties bought and sold by investors so far have yielded more than $1.2 million in profits, about $48,000 a house.  

Today, eight of the county's 15 commissioners voted for the program--the minimum number needed for the program to advance.

"This represents, once again, a windfall to a number of purchasers that are getting some very undervalued properties," Commissioner Anderson said. "This is not the way we should be handling assets of the taxpayers."

Commissioner Alisha Bell abstained from voting. Her mother, a vice-president with Home Team LLC, is one of the developers investing in the properties.

Contact 7 Investigator Ross Jones at ross.jones@wxyz.com or at (248) 827-9466.