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In recent months, the Russell Industrial Center, one of the largest remaining artist spaces in the city, has been sharply raising rents on some of its tenants, even doubling or quadrupling rates in less than a year and a half. The increases are putting pressure on the tenants—mostly artists and craftspeople like painters, photographers, glassmakers and woodworkers who use the Russell for studio space.
At the same time, the owner of the multi-building complex at 1600 Clay St., property speculator Dennis Kefallinos, continues to rack up blight tickets while tenants cite a litany of maintenance issues.
The full extent of the rental increases is difficult to determine. The Russell has between 140 and 150 tenants in non-residential units, according to what management told the Detroit Free Press in 2017 and what was said in March of this year in a private Facebook group called Tenants of the Russell Industrial Center.
Nathan Sellers, who works at Boydell and manages the Russell, said ownership told him not to speak to Outlier or answer our questions. Still, we submitted a lengthy list of questions several weeks ago about the extent of rent increases, investment in the building, maintenance issues and more, but did not receive a response by the time of publication.
Outlier Media reached out to more than a dozen current tenants, but few were willing to speak on the record or be identified. All said they feared eviction. One tenant said he was “afraid of retaliation.” Others described broken car windows and toothpicks jammed into door knobs after lodging complaints.
“It’s very much impacting our ability to stay,” said one tenant of more than a decade. “It’s a continual source of stress for all the renters in the Russell.”
Since the start of 2020, Kefallinos has filed 43 evictions against tenants at the Russell, according to records at the 36th District Court, which handles landlord-tenant cases in the city. All the tenants we spoke with described being on month-to-month leases, which makes rent increases and evictions easier for landlords.
For several decades, Kefallinos has bought and sold property in Detroit through his company Boydell Development and other associated LLCs, and has developed a reputation for doing the bare minimum to maintain his buildings. His portfolio includes numerous abandoned buildings, like the former Roosevelt Hotel, the former Burton International School and a cold storage facility—all in or around Corktown. Falling bricks at another of his cold storage facilities on the east side caused street closures this summer.
The city has occasionally cracked down on blight violations at Kefallinos’ properties. It’s currently threatening to demolish an abandoned hospital he owns in Southwest Detroit. In 2017, the city temporarily shut down the Russell after it was cited for numerous safety violations.
Bought by Kefallinos in 2003, the Russell is the crown jewel in his large Detroit portfolio, being more valuable, bigger and more occupied than his other properties. The roughly 2.2 million-square-foot industrial building was designed by Albert Kahn for the J. W. Murray Mfg. Co in 1915, with thick, reinforced concrete floors and columns made to last generations. The building manufactured sheet metal for Detroit’s automobile industry for decades. It continued to be a site for manufacturing through the 1990s when it was owned by printer Wintor-Swan.
Since Kefallinos took over, it has accrued 86 blight tickets and still has $70,000 in unpaid tickets, according to the Buildings, Safety Engineering and Environmental Department (BSEED). But, the department said, he has been taking steps in recent years to become compliant.
“We understand that in a building this size with this many tenants that compliance is a process and are willing to work with the owner as long as we continue to see progress,” said David Bell, director of BSEED, in an email to Outlier. “If the owner does not adhere to the schedule submitted, the city will issue another round of tickets with increased fines.”
BSEED spokesperson Georgette Johnson said that the city’s rental registry ordinance, which requires landlords to have a certificate of occupancy, does not apply to commercial buildings.
A litany of issues
David Dent, who restores antique furniture, rented space at the Russell for nearly 30 years until recently.
“After Kefallinos took over, they did practically no maintenance at all,” Dent said.
Dent stopped paying rent in 2017 because he said the furnace wasn’t working and water would constantly leak from the ceiling, which sometimes came down in chunks and damaged his equipment and products. He rented three units totalling almost 7,500 square feet for $1,000 a month but said he could only use about half of it because of problems with the ceiling. He did most of his sanding and staining in the hallway.
When the Russell filed an eviction action against him, the two parties agreed that if Dent paid his back rent, Kefallinos would complete repairs to Dent’s unit. Dent said he paid what he owed.
“Of course, they didn’t do anything,” he said. “The next time I complained, someone threw a rock through my car window.”
He finally moved out last year after management said they were going to triple his rent.
“When you’re getting a great deal on rent, you put up with that stuff,” said Scott Sprague, a photographer who had been renting at the Russell for 15 years until earlier this year. “If your unit doesn’t leak at some point, it will eventually.”
Describing himself as “one of the last guys to get a good deal,” for years he paid just $1,100 a month for a 7,000-square-foot space. But in his last year there, his rent increased to $2,700 a month. Sprague moved out in May and now rents a considerably smaller space in Ferndale.
Every tenant we interviewed, both past and current, spoke about heating issues, broken windows, broken elevators, bathrooms with no running water and a litany of other issues that arise and take months to resolve—if they ever are.
“It’s fine if you’re gonna make some stuff here and don’t expect visitors and clients,” Sprague said. “But if you want clients to come, it’s tough.”
That’s been a problem even for tenants who have fewer complaints. Michael Axtell opened a gym called Proving Grounds at the Russell five years ago.
“It’s a great place to incubate a business and see if your idea has any merit,” he said.
Axtell also admitted that he was wary of talking on the record about the few complaints he did have.
“They like to get rid of people that don’t make them look good,” he said.
Axtell said he’s lost 19 clients because the bathroom on his floor hasn’t had running water for the last six months. Meanwhile, he said his rent increased between 8% and 10% a few months ago, though he declined to give specific amounts.
Kefallinos’ big debt
But rent increases have not been universal.
For a decade, Nancy Mitchnick, a painter, has never had her rent raised at the Russell. She has been paying $750 per month for the 1,000-square-foot studio she’s been renting since 2016, her second space at the building. She said management has been lenient when she’s been late on rent. While she has some complaints about the elevators not working, she thinks management has been improving overall.
“I have a beautiful little studio, and if I need something, they take care of it,” Mitchnick said.
We can only speculate as to why Kefallinos has been raising rent, but he does owe the city a lot of money. As of March, Kefallinos had $415,619.50 in unpaid water bills, most of it from the Russell. According to Wayne County, he’s also delinquent on his taxes for the building and owes $102,948.21.
Many tenants who spoke to Outlier said the rent hikes jeopardize the largest collection of artists and craftspeople in the city. Finding studio space that suits an artists’ needs and income has become a bigger challenge of late, according to photographer Millee Tibbs.
In 2019, she was evicted from her studio, along with all the other artists, at the Love Building in the Core City neighborhood. She hasn’t found a suitable studio space since.
“At some point, I got really demoralized and stopped looking for a studio,” Tibbs said.
Tibbs looked at a few places that were too expensive, didn’t have heat or would have required investment from her to make it suitable. She only briefly considered renting in the Russell. Tibbs had previously lived in The Hudson, a Kefallinos-owned, multi-family building, where “the problems were myriad.” Water leaked into the apartment every time it rained, the elevator rarely worked and some walls didn’t even reach the ceiling.
She said she had such a negative experience that she “refused to be in any building run by him ever again.”
In the end, she decided to build a studio in her home, which is still in process.
“A lot of artists end up making home studios if they can,” she said.
Many past and current tenants at the Russell lamented that the complex hasn’t been respected by Kefallinos as a special place that’s hosted talented artists over the years.
“[Kefallinos] could literally make this a nationally renowned art center, and we wouldn’t resent him bumping up the rent at all,” one tenant told us. “But he just doesn’t care.”