Detroit demolition program allegedly mishandles $7.3 million funds

Detroit demolition program allegedly mishandles $7.3 million funds

A state review of the program identified the improper reimbursement of federal funds.

January 31, 2017
CDR Staff
Demolition Legislation & Regulations
A state review of Detroit’s demolition program identified more than $7.3 million of mishandled expenses paid for with federal funds, a report by the Detroit Free Press says. According to Mayor Mike Duggan, the city admits to improperly reimbursing $1.3 million with federal funds.

A panel of three judges that hasn’t been selected yet will decide the different in arbitration, the report says.

Part of the spending the city and state disagree on is from unit-price contracts made in summer 2014, the report says. Private meetings between city officials and demolition companies were held to discuss the price for work. According to the report, other companies were able to bid on the work but the unit-price the demolition program was willing to pay had already been agreed upon by the companies that met with officials.

The companies to bid on the job was Detroit-based Adamo Group, who was paid $8 million for its unit-price contract, Homrich, Carleton, Michigan, who was paid $8.3 million and MCM Management, Bloomfield Hills, Michigan, who was paid $3.5 million. According to the report, the contracts paid a set price of 0.52 cents per cubic foot of each demolished home.

The state’s review of the city’s demolition program is separate from the ongoing investigation of the blight demolition program.