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This story has been updated to clarify that the need for Detroit City Council approval for land sales of nine or more parcels applies only to DLBA-owned land.
For years, Pashon Murray had been looking for land in Detroit for her composting business. The Michigan native founded Detroit Dirt in 2010. Working closely with someone from the city she finally found a spot: a 5.3-acre plot in the Core City neighborhood. In 2019, she secured a resolution from the Detroit City Council to purchase it.
The City of Detroit and the Detroit Land Bank Authority, a quasi-public entity that manages the city’s vacant residential properties, are by far the largest landowners in the city. The Land Bank alone owns nearly 20% of the city’s land, according to Detroit’s Open Data Portal. Cities and counties account for just 0.7% of land ownership in Michigan.
In August 2021 the city sold the land Murray wanted to the Pope Francis Center, which is building out a new housing campus for people experiencing homelessness.
Murray said she was blindsided by the sale and that the city didn’t give her any warning. She still wanted the property, even though she didn’t do everything she needed to secure it. Murray still has issues with how her deal went down and thinks there is a larger issue with how the city handles development deals.
“The city has to be more transparent,” Murray said. “We need more seamless pathways for small business owners to buy property in Detroit.”
The city often swaps land with developers, either in exchange for different land or as needed to complete a deal. But deals involving land owned by the Land Bank can be constructed behind closed doors with little public input except when it comes time for approval from Detroit City Council, which is required for all Land Bank sales larger than nine parcels.
Murray believes the city did not want her to have the land. “They wanted the Catholic Church to have this property and that’s all this came down to,” she said.
Donald Rencher, group executive for Housing, Planning and Development with the City of Detroit, said the city pivoted to a different buyer after it failed to receive a deposit from Murray for two years.
“What’s not going to be acceptable in the city of Detroit is non-movement,” Rencher said. “We have to figure out how to get things moving because Detroit residents deserve for us to continue to push out economic development opportunities.”
Shaping neighborhoods
Land swaps initiated by the city have had unintended consequences on neighborhoods.
In 2019, the city helped Fiat Chrysler Automobiles (now Stellantis) compile the land the company needed to build out its new factory on the east side. To do so, the city allowed several controversial speculators to trade land they owned in the area FCA wanted for other valuable parcels in different parts of the city.
For example, in exchange for an 82-acre lot that is now part of the expanded factory complex, the city gave Crown Enterprises, owned by the billionaire Moroun family, $43.5 million and 261 parcels, many in Southwest Detroit where the family is not well liked. Michael Kelly, who is being sued by the city for blight violations, got 15 properties and had more than $2 million in debt he owed to the city written off in exchange for just five properties needed by FCA.
The city also worked out a massive swap with businessman John Hantz, who already owned hundreds of parcels on the east side, which he’s been turning into a tree farm called Hantz Woodlands. He bought that land from the city during its bankruptcy proceedings in 2013 for 8.3 cents per square foot.
As part of the FCA deal, Hantz swapped 37 parcels and technically got just 12 parcels in return. But at the same time, Hantz and the city were negotiating a separate deal, stipulated as part of the 2013 agreement, with very favorable terms.
Hantz ended up buying an additional 370 vacant parcels and 80 homes near the Woodlands for just $150,000. The Detroit Free Press detailed several inconsistencies about the timing of the sale. Hantz and the city gave different accounts of when negotiations began. The city insisted that the swap and subsequent sale had nothing to do with each other.
Two years later, Hantz had sold a little over 100 of the properties for $2.8 million.
“The City of Detroit has an enormous inventory of small, scattered properties, most of which are either vacant or economically unsalvageable. They need to be assembled into larger parcels if they are to be put back into productive use,” John Mogk, a Wayne State University law professor, wrote to Outlier.
“Speculators are operating throughout the city, attempting to anticipate where the city will be targeting development, for the purpose of purchasing and gaining control of strategic sites to exact high prices and exorbitant amounts of public funds to complete the development project. The lack of transparency largely results from the City addressing this problem.”
Donna Givens Davidson, president and CEO of the Eastside Community Network, a grassroots organization that works with residents near the footprint of the Stellantis factory, has been disappointed with how deals have gone down in her neighborhood.
She said there was no communication with the neighborhood about how the swaps might affect them, and that residents have been upset that companies that have “demonstrated ill will” get to influence the makeup of her neighborhood.
“These deals flipped the interests from residents to business with the promise of jobs that will rarely employ residents that live right here,” Givens Davidson said.
How the deals get done
Murray of Detroit Dirt is not a large developer but found herself also benefiting from the city’s land swap practices after she missed out on the site she originally wanted for her compost facility. Initially, the city offered her smaller lots that weren’t suitable for her needs. After sustained pressure, she was eventually able to get the city to offer her two plots about seven miles apart that, if combined, would be comparable in size to the original spot in Core City.
But she felt the city wasn’t being forthcoming with its actual inventory.
“In the beginning, they offered me parcels that I couldn’t operate on,” Murray said. “Later on, when we’re going back and forth, I found out there were other, better properties.”
Rencher, the group executive for Housing, Planning and Development, said the city negotiated with Murray in good faith.
“The real estate team spent many hours and weeks working with Pashon to try to find some reasonable alternatives,” he said.
On multiple occasions, the city and Land Bank have said their primary goal is to bring vacant parcels back to productive use. When determining what to do with land, there’s no uniform process, Rencher said.
“We take inventory of the land and try to figure out the best use based on planning studies, conversations with development professionals and the marketability of the neighborhood,” he said.
Sometimes, the city publicizes requests for proposals, but more often, it takes requests privately from interested buyers, even if the land is not publicly available for sale.
It has also taken steps in recent years to be more transparent and offer up more of its inventory. In 2020, the Land Bank updated its Vacant Land Use policy to allow for residents to purchase lots on the same block as their house for $250. The city also recently launched its Detroit Develop Opportunities map, which lists every publicly available property currently for sale.
Father Tim McCabe, executive director of the Pope Francis Center, said the land in Core City is ideal for his organization’s project. The campus will have five interconnected buildings containing 40 studio apartments, a medical clinic and gymnasium. Many of the amenities will be available for community use, and McCabe said the neighborhood has been supportive of the project.
McCabe found it easy overall to work with the city. “It helped that I wasn’t asking for money and came to the table with solutions,” he said. “I found they were really eager to be helpful.”
Pope Francis Center paid $250,000 for the land. Murray agreed to purchase the land for $135,000. The city said the difference was due to increases in land value over time.
“Helping our homeless residents is extremely important,” Rencher said.
“And for a project that came to the table with a design, contractor and money fully raised — and has also been a partner in helping address homelessness — was very appealing for us,” he said.
Givens Davidson of the Eastside Community Network wants the city to take a more intentional approach to what it does with vacant property and its impact on neighborhoods.
“The city should have some strategy goals and benchmarks around how much of its property it’s selling to low-income individuals, how much will go towards green infrastructure, and then solicit bidders to accomplish those goals as opposed to just having open sales,” she said.
Reach AARON MONDRY at aaron@outliermedia.org or 313-403-7221. Sign up here for our weekly newsletter The Dig to get quality info and insights on Detroit neighborhoods.