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Topic: Flint, Genesee County and the Hardest Hit audit
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El Supremo

I left the housing portion of the Master Plan after several of my questions were answered in a manner that made it obvious the decisions were already made. In one question and answer publication a question about redevelopment was answered:

"While demolition of vacant homes is a top priority, Flint must diversify its housing stock to meet changing market needs. Currently 78 % of Flint residences are single family homes. This does not match well with the growing demand for apartments, townhomes, and mixed use options among young professionals, family and elderly."

In my opinion this dialogue sounds too close to the stated goals of the Sasaki Plans developed for the core of Flint. Nowhere in the master Plan is language for helping families save their homes from foreclosure. The Hardest Hit Fund was originally created for that purpose and even the Blight Elimination plan has the goal of stabilizing neighborhoods to prevent foreclosures.
Post Thu Apr 13, 2017 12:10 pm 
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El Supremo

The SIGTARP found a misuse of the funds in Indiana when the blight funds were used to move homeowners and demo the properties so a car dealership could relocate. This raises the possibility that there are instances in which adhering to the Master Plan for the selection of the homes to be demolished and the stated goals of the Master Plan are not going to be in sync with the purpose of the Hardest Hit Plan.

Could Buying a Home in Flint Actually Be a Smart Investment? | realtor ...
Feb 11, 2016 - Housing prices in Flint, MI. may have nowhere to go but upwhich could make it an opportune time to invest in the city's real estate market. ... has seen young families and seniors capitalize on the lower property prices to buy ...
Post Thu Apr 13, 2017 12:18 pm 
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El Supremo

Could Buying a Home in Flint Actually Be a Smart Investment?

Could Buying a Home in Flint Actually Be a Smart Investment?
By Clare Trapasso | Feb 11, 2016
Brett Carlsen/Getty Images
Last year, longtime renter Belinda Bell achieved a longtime dream: She, her husband, and their 9-year-old twins moved into a nicely appointed, three-bedroom, 1.5 bath, brick house with two fireplaces that they had purchased for $34,000 in cash. The same home had sold for nearly $122,000 in 2003.

Unfortunately, the home was in Flint, MI.

Just a few months later, Michigans governor declared a state of emergency in the 200-year-old city, acknowledging that the foul-smelling, brown-tinted water Bell had observed in her home was contaminated by lead. And just like that, her modest dream became a nightmare.

Now the lifelong Flint resident feels trapped in a house whose value has plummeted and whose future sales prospects have become murkier then the water that bubbles from its kitchen sink. She knows that the chances of cutting bait and selling to recoup her investment right now are slim to none.

Sometimes I get very emotional about this, says Bell, who has her daughters brush their teeth with bottled water. Our life has been altered.

But Bell, like many other locals, is steadfastly optimistic that once clean water flows again through the municipalitys pipes, home prices will eventually stabilizeand even rise. And that thinking has led increasing numbers of peoplecurrent Flint homeowners and outside speculators aliketo posit that this could be an opportune time to invest in the citys real estate market, as unlikely as that might seem.

Property values had plunged in Flint long before news of the poisoned water made headlines.The bustling, manufacturing city had become the poster child for economic collapse, as Flints largest employer, General Motors, laid off masses of workers in the 1980s. It led to a huge spike in unemployment and crime and an unwelcome starring role in Michael Moores 1989 post-Reaganomics economic collapse documentary,Roger & Me. Particularly hard-hit by the most recent housing crisis and recession, the place was just beginning to get back on its feet.

And then the water went bad. And so did everything else.

The crisis actually began in 2014, when the city, in an effort to cut cash, switched its water source from Detroit to the Flint River, a process that caused the aging pipes to corrodeleading to massive lead contamination. By the time the problem was brought to light as a national horror story, some 12,000 children had already been exposed to the tainted water. While corrective actions are finally being taken, it remains a public health threat on an epic scale.

Now sellers, who had begun to see home prices creep up, are struggling to find buyers willing to pay more than a fraction of what they had originally paid for their properties.

Flint home sales by the numbers

But however grim the current housing market is, real estate agents seem confident that prices have nowhere to go but up. Once the water crisis has been resolved and state and federal steps have been taken to improve Flints infrastructure, home values will begin to improve, says real estate agent Paul Raymond, of Paul Raymond Associates at RE/MAX Select. He owns 58 single-family homes in Flint, which he rents out.

Raymond estimates it will take 18 to 24 months for the local market to show signs of growth once the water problem is remediedbut its still not clear how long that will take.

In 2015, 805 single-family homes were sold in Flint, with an average sale price of $22,775, according to data Raymond pulled from the East Central Association of Realtors. The average sale price is not even half of what it was$57,067in 2003.

There were 367 Flint homes for sale, ranging from $1,500 to $225,000 as of Feb. 5, according to association data. The average list price was $26,500.

The fact that you can purchase a home to own for a lifetime for less than what it would cost you to rent it for three years is amazing, Raymond says.

Flint's home price cuts

There are already signs that prices are poised to rise, says Jonathan Smoke, chief economist at realtor.com.

The city could benefit from its close proximity to Detroit, which has been undergoing its own resurgence, as companies and workers look for lower-cost property in Flint, Smoke says.

From a pure price perspective, it looks like an attractive buying opportunity, he adds. Absent the crisis, you would expect things to be improving.

Before the state of emergency was declared, Flints property values had been rising annually between 5% and 10%, he said.

But in light of the water crisiscombined with skyrocketing crime rates and plunging populationthe market now has a glut of home inventory.

The question is: Are the homes on the market worth the risk? Smoke says.

Robert Edelstein, a real estate professor at the Haas School of Business, at the University of California, Berkeley, doesnt think so. He believes the water crisis will prompt even more employers to flee the already economically depressed cityfurther perpetuating the cycle of decline.

Buying a home in Flint would be a bad investment, he said. The outlook for economic [and] demographic growth is poor to dismal.

But, even mid-crisis, there are still buyers on the marketeager to take their chances, and advantage of the rock-bottom home prices.

Flint resident Vernon Johnson, 51, and his wife expect to close on their new, $15,000, three-bedroom city residence this week. Its affordable for me right now, says Johnson, a soda bottling plant technician, who added that he drinks only bottled water and has installed water filters on faucets throughout his current home.

Why is he remaining in the city? I like to stay close to my job, he says. I have faith to believe that its all going to turn around.

Flint real estate broker Grant Hamady, at Weichert Realtors Grant Hamady, has seen young families and seniors capitalize on the lower property prices to buy in better parts of the city. And hes seen a recent influx of investors from states like California, buying up houses to rent them out.

Some sellers are even throwing in water-filtration systems to sweeten the deal, he says.

Local investor Bill Clark, president of Vash Investment Group, is also betting that housing prices will rise as time softens the stigma stamped upon his hometown.

Its the best time ever to invest in Flint, because of the rock-bottom prices, contends Clark, whose company owns about 30 homes in the city. We [were] at the lowest of the low pricing, and [then] the water crisis came in and knocked the value down.

His company buys up local real estate, renovates the properties and then sells them to buyers with poor credit by providing financing (typically at a high 8.9%) or through lease-to-own options.

His latest purchase was a three-bedroom, two-bath home with a one-car garage and partially renovated basement in Flint for $25,000 in December. During the peak of the housing market, the home would have sold for about $90,000, he says. But, needless to say, this is not the peak.

Weve always dealt with crisis, Clark says. We will come back.
Clare Trapasso is the senior news editor of realtor.com and an adjunct journalism professor. She previously wrote for a Financial Times publication and the New York Daily News. Contact her at clare.trapasso@move.com. Follow @claretrap
Post Thu Apr 13, 2017 12:38 pm 
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El Supremo

So is it the best time to buy or are the majority of individuals moving into Flint enters?
Post Thu Apr 13, 2017 12:43 pm 
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El Supremo

Genesee County Land Bank - Funded Demolitions

Since 2014, the Genesee County Land Bank Authority (GCLBA) has received a total of $67.4 million in Hardest Hit Fund (HHF) dollars for demolition in Flint and ...

This site explains the Genesee County Land Bank Demolition plan and lists sites to be demolished.

Note: Their costs are lower than those indicated by SIGTARP in their most recent audit that included 3 Michigan cities.
Post Fri Apr 14, 2017 4:13 pm 
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El Supremo

Genesee County Land Bank facing federal audit over demolition...

Mar 27, 2017 ... After SIGTARP did a complete review of the program nationwide, it is now auditing each city which uses the funds. Genesee County Land Bank ...
Post Sun Apr 16, 2017 10:01 am 
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El Supremo

Feds subpoena state housing agency
Joe Guillen , Detroit Free Press Published 3:01 p.m. ET Feb. 2, 2017 |

A federal watchdog agency subpoenaed the Michigan Homeowner Assistance Nonprofit Housing Corp. last year for data about applicants seeking federal funding.

The MHA, in collaboration with the Michigan State Housing Development Authority, evaluates requests from municipal demolition programs for federal reimbursements from the Hardest Hit Fund, from which more than $250 million has been allocated to Detroit.

It processes requests for two types of federal assistance money for blight demolition and mortgage relief for struggling homeowners. Last week, the agency demanded Detroit's demolition program pay back $7.3 million for improper reimbursements for blight demolition.

Although the two subpoenas came from SIGTARP the federal agency investigating Detroit's demolition program officials say the subpoenas are unrelated to the city's program.

MHA Vice President Mary Townley said the subpoenas came after the MHA would not provide SIGTARP with the data because it contained personal information. After the MHA declined to hand over the data voluntarily, SIGTARP delivered a subpoena, Townley said.

Read more:

Michigan finds $7M wrongly reimbursed demolition costs

Michigan reviewing payments for Detroit demolition consultant

"We've received only two subpoenas ever, and they're not on the Detroit program at all," Townley told the Free Press on Jan. 19. "They are from SIGTARP, asking for specific data for the entire Hardest Hit program."

SIGTARP is a watchdog and law enforcement agency responsible for monitoring the Hardest Hit Fund. As part of its criminal investigation into Detroit's demolition program, it subpoenaed the Detroit Land Bank Authority and the Detroit Building Authority in May.

The Free Press obtained the two subpoenas to the MHA under the Freedom of Information Act.

Katie Bach, a spokeswoman for the Michigan State Housing Development Authority, said in a statement Thursday that it is not unusual for SIGTARP to conduct reviews and audits of the national program for its quarterly reports.

"My understanding is the two subpoenas were requested as a direct result of issues involving other participating states, and not related to the Detroit demolition investigation," Bach said.

The subpoenas request data files of "raw Hardest Hit Fund (HHF) application level data." The subpoena in September seeks data as of the second quarter of last year and the December subpoena requests data as of the third quarter. Both also demand "current policies and procedures applicable to the HHF Applicant Data File such as applicant intake management and eligibility criteria for HHF programs."

There are significant differences between SIGTARP's subpoenas to the MHA and the Detroit agencies.

The subpoenas to the MHA came from SIGTARP's general counsel, B. Chad Bungard, and they cited the need for information for an audit. The subpoenas to the Detroit demolition agencies referenced an "ongoing investigation" and were delivered by a "criminal investigator/special agent" whose name was redacted under a FOIA exemption.

Contact Joe Guillen: 313-222-6678 or jguillen@freepress.com. Follow him on Twitter @joeguillen.

Last edited by untanglingwebs on Sun Apr 16, 2017 10:24 am; edited 1 time in total
Post Sun Apr 16, 2017 10:10 am 
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El Supremo

Each of the three Michigan Cities audited in 2015-2016 are getting a second audit. First and ongoing Detroit and now Flint. Lansing will be last. What I find interesting is the FHA , in this instance MSHDA, which received one of two subpoenas. Michigan leads in demolitions, but the state has a dismal record in helping homeowners save their homes. The HHF could have helped with mortgages and taxes for qualifying homeowners.
Post Sun Apr 16, 2017 10:23 am 
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El Supremo

Audit Reports - SIGTARP

Waste and Abuse in the Hardest Hit Fund in Nevada. Audit (September 9, 2016) Engagement Memo (February 2, 2016). Treasury's HHF Blight Elimination ...

Go to the reports and audits link
on pages 150 to 154 of the January 2017 Report to Congress addresses some of the issues that might be addressed in the upcoming Flint Audit
Post Tue Apr 18, 2017 5:57 pm 
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El Supremo

Sally Haywood
56 mins Flint, MI
I have spent days reading reports and audits from Special Inspector General Troubled Assets Relief Program (SIGTARP) and they are scary awesome.! They released a 298 page report to Congress on January 27,2017 and included a portion on Michigan. Flint turned down 84% of homeowners earning less than $30,000 and the records for those decisions were missing or incomplete.
The Michigan State Housing Development Authority (MSHDA) has been hit hard by the HUD Office of Inspector General (OIG) for releasing funds improperly, such as giving Boji over $500,000 for the property on Clio and Pierson when it was a State contract and not a Flint contract. The OIG demanded repayment.
Also, Where are the programs for minority and female owned businesses. The County list I saw has to be nearly 20 years old. Why do many of these companies have to leave this county to be employed?
This is not the first SIGTARP audit involving Flint or the State of Michigan. Also other agencies are looking at the SIGTARP issues and MSHDA was forced to work with Treasury to create rules statewide.
Will they find the Land Banks bidding process lacking as it bears some resemblance to the troubling Detroit process. Also is any of the "Greening" money accounted for when properties are sold before the 5 year contract period or are all Land bank properties mowed with these funds?
Then there are potential conflicts-of-interest existing within the Flint and Genesee government and the "shadow government" that is controlling development for both. SIGTARP has uncovered similar misuses in other states. The Bankruptcy Court was furious with bias within Flint West Village and Kettering.
Post Wed Apr 19, 2017 7:13 am 
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El Supremo

People get confused when I say Flint is being reinvented only for the "better class of poor". What were the reasons that 84% of those earning $30,000 or less were rejected from a program designed to help them. Was the goal to use the HHF money to demolish homes in areas desirable for future redevelopment. Were any of these people denied former GM workers who lost their jobs? We will never know because there was lax record keeping.

I once referred a young couple to Kildee's office because the were denied help. They fit the criteria because their financial problems resulted from efforts to save their young daughter who was dying. Kildee was able to get them help, but their situation was exactly why the program was created. How many others were wrongly denied and SIGTARP asks if the state and local entities created standards that were too stringent.

SIGTARP also asks if contractor relationships are too cozy and if the criteria for bidding is overly restrictive. SIGTARP will look at where and how the homes to be demolished will be selected and the level of minority and female contractors involved in the demolition process.
Post Wed Apr 19, 2017 7:31 am 
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El Supremo

Detroit Metro Times

News & Views Local News
Detroit is razing houses with money intended to save them
A lifeline demolished

by Steve Neavling July 19, 2017
A row of dilapidated houses at Crane and Charlevoix on Detroits east side. Eleven houses on this block have been foreclosed since 2002. - STEVE NEAVLING
Steve Neavling
A row of dilapidated houses at Crane and Charlevoix on Detroits east side. Eleven houses on this block have been foreclosed since 2002.
Detroit's decade-long wave of tax and mortgage foreclosures has wiped out large swaths of the city's neighborhoods as Wayne County continues to seize thousands of occupied homes a year.

And while the city's neediest homeowners were supposed to receive federal assistance to save their homes as part of the Treasury Department's seven-year-old Hardest Hit Fund, Michigan squandered its originally allotted $498 million by creating unnecessarily stringent requirements according to a scathing audit issued in January by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

As a result, more than 80 percent of Detroiters making $30,000 or less a year were denied assistance to save their homes from tax or mortgage foreclosure. By contrast, the other 17 states with Hardest Hit Funds rejected 53 percent of homeowners making less than $30,000.

"Michigan and Ohio are among the states that have the most TARP dollars set aside, but also have some of the highest percentage of people turned down for the Hardest Hit Fund," the audit reads.

SIGTARP said Michigan's high rejection rate "raises questions about whether these programs are as effective and efficient as they can be to reach those people who are the hardest hit."

With a surplus of unused money, Michigan became the first state in 2013 to demolish homes using money intended to save them. The idea was that demolitions would revitalize neighborhoods by increasing the property values of surrounding houses, attracting new homeowners, and reducing crime rates.

A report commissioned by the Skillman Foundation and Rock Ventures found that each demolition in Detroit increased the value of adjacent homes by 4.2 percent. Since 2013, Detroit has razed more than 10,000 blighted and abandoned houses using the federal funds.

But the Treasury Department's decision to allow Michigan and several other states to use the money for demolitions has come under fire because the federal government created no rules or controls to prevent fraud, waste, and abuse, according to a 2016 SIGTARP investigation.

The investigation found that demolition programs are "vulnerable to the risk of unfair competitive practices such as bid rigging, contract steering, and other closed door contracting processes" because the "Treasury conducts no oversight" and therefore cannot determine whether the cost of demolition is "necessary and reasonable."

The SIGTARP report added that "the vulnerability of the Hardest Hit Fund to fraud, waste, and abuse significantly increased with blight elimination, which Treasury could have mitigated, but did not."

In a report to Congress in April, a federal inspector slammed the state of Michigan for "skyrocketing demolition costs," indicating that the average price to raze a house had increased 90 percent, from $9,266 to $17,643 by the second quarter of 2016.

The Detroit Land Bank's handling of the demolitions has become the subject of an ongoing federal grand jury investigation. The Land Bank declined to comment for this story.

Foreclosure experts question why Michigan, one of the states hardest hit by the Great Recession, would prioritize demolition over foreclosure prevention.

Over the past decade, more than one in three homes in Detroit a total of about 140,000 have been foreclosed because of unpaid taxes or mortgage defaults.

"Many of the houses now being demolished could have been saved if there wasn't a lack of preventing foreclosures," says Jerry Paffendorf, co-founder and CEO of Loveland Technologies, a Detroit-based property and mapping company. "If you don't prevent foreclosures, you're going to have more houses to demolish."

In 2010, Michigan originally received nearly $500 million to provide loans to eligible homeowners who were facing tax or mortgage foreclosure. But the program, called Step Forward Michigan, rejected funding for about 5,000 Detroiters, while assisting more than 2,000 homeowners who earned at least $70,000 a year.

SIGTARP found that Michigan's eligibility requirements were more stringent than most states. Michigan, for example, declines assistance to homeowners whose income was not cut by at least 20 percent, while other states don't require a specific pay reduction to be eligible. Michigan also denies funding to homeowners whose unemployment benefits ran out more than a year ago.

Of the $761 million that Michigan received in Hardest Hit Funds since 2010, half was committed to demolitions.

"The Michigan requirement does not reward a responsible worker whose paycheck was cut more than one year ago and has exhausted unemployment benefits, savings, family help, or low-paying part-time work to pay their mortgage," SIGTARP wrote in January 2017.

Michigan's focus on demolitions left the state without money to help new applicants for foreclosure assistance for the first four months of 2016.

Sen. Coleman Young II, who is running for mayor of Detroit, rolled out his plan to save the city's neighborhoods last week and said he would lobby state and federal officials to use the demolition funds for their intended purpose helping homeowners avoid foreclosure. The key, he said, is getting the state to make more people eligible for the funds.

"I want to use the Hardest Hit Funds to help people stay in their houses," Young said. "Imagine how many people would still be in their homes if the state didn't reject more than 80 percent of the people making $30,000 or less."

About 4,000 occupied houses are facing property tax foreclosure this year.

Steve Neavling is the editor and publisher of Motor City Muckraker.
Post Sun Jul 23, 2017 10:28 am 
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El Supremo

Federal audit says Land Bank mismanaged asbestos program in Flint demos

By Ron Fonger rfonger1@mlive.com
GENESEE COUNTY, MI -- A federal audit says the county Land Bank mismanaged an asbestos removal program in Flint earlier this year, failing to confirm materials were properly disposed of and handled.

The report by the Office of Special Inspector General for the Troubled Asset Relief Program was issued Tuesday, Nov. 21, and says the U.S. Army Corps of Engineers found three areas of high risk in the Land Bank program -- removal and storage of asbestos and other hazardous material, use of appropriate landfills and recycling facilities, and use of proper material to fill holes left by demolition work.

"The people of Flint, Michigan, require more than trust that these demolitions will not harm them -- particularly after their contaminated water," the audit says.

The report concludes that the U.S. Department of Treasury does not require state oversight of programs like the one the Land Bank manages in Flint to assure quality work and safeguards, and in "the absence of federal requirements, the Corps identified that the Michigan state housing agency's requirements do not adequately cover these high-risk areas."

Federal investigators are looking at how $25.5 million was spent on demolition and other costs in Flint, the Office of the Special Inspector General for the Troubled Asset Relief Program says.

Michele Wildman, executive director of the Land Bank, said her agency is still reviewing the report and associated files from a 2014 demolition that was a part of the review.

Wildman said "many of the issues noted are inaccurate and appear to show a poor understanding by auditors of program requirements and local process."

"We continue to put the needs of the community first and foremost in our demolition program, and we have worked closely with regulators to develop systems for compliance with all local, state and federal regulations and HHF grant requirements," Wildman said in an email to MLive-The Flint Journal.

"If there are additional controls that are recommended by regulators in the handling of asbestos beyond the ones we have in place, we welcome that discussion," her statement says. "In fact, on at least three occasions over the past year, we have made specific requests for technical assistance to the state. We will continue making these requests, as public health is our highest priority."

The Journal could not immediately reach Flint Mayor Karen Weaver for comment on the audit.

A spokeswoman for the Michigan State Housing Development Authority said officials take all reviews of its programs seriously.

MSHDA created the Homeowner Assistance Nonprofit Housing Corporation to oversee the use of Hardest Hit Fund (HHF) dollars in Michigan, the federal program that funded the demolitions.

"Since inception of Michigan's HHF blight elimination program, MHA has worked to strengthen its policies and procedures regarding pre- and post-demolition inspection protocols before any HHF funds are disbursed," the agency said in a statement.

"MHA is carefully reviewing SIGTARP's audit and recommendations and will address them with the Genesee County Land Bank and U.S. Department of the Treasury accordingly."

MSHDA contracted with the county Land Bank as its local partner to handle demolitions.

The audit said there is currently no requirement for the state to perform oversight inspections or for it to institute any type of quality assurance program.

"At a minimum, the state should be required to perform technical oversight to assure waste materials are handled properly and holes are being filled with clean material," the audit says.

SIGTARP announced in March that it would audit how $25.5 million was spent on demolition and other related costs in Flint.

The agency says it audits programs to prevent fraud and identify cost savings, wasteful spending, abuse, inefficiency and mismanagement.
Post Wed Nov 22, 2017 9:42 am 
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El Supremo

State reverses course, says Detroit demo 'bid rigging' never happened
Joe Guillen, Detroit Free Press Published 6:00 a.m. ET Dec. 8, 2017 | Updated 10:36 a.m. ET Dec. 8, 2017

Detroit's demolition program and asbestos: What you need to know Detroit Free Press

635986681220662109-051216-detroit-demolition-r.jpgBuy Photo
(Photo: Ryan Garza, Detroit Free Press)

A state audit of Detroits blight demolition initiative suspected possible bid rigging last year in the midst of an ongoing federal investigation into the program, according to records obtained by the Free Press.

But a state official involved in the audit said Thursday that the bid rigging suspicions discussed privately in August 2016 ultimately did not turn out to be true.

"We didn't see any bid rigging," Mary Townley, a state housing official who was at a meeting last year where bid rigging was discussed as a possibility, said in an interview Thursday. "It was probably brought up not knowing what we were dealing with until we further completed, or further got into our analysis."

A state analysis released in January may not have specified bid rigging, but it found $7.3 million in improper billings from Detroit seeking federal funds for demolitions, including about $900,000 in billings tied to bid manipulation in which demolition costs were moved from one house to another so that prices did not exceed a cap of $25,000 per house.

The city ultimately agreed to repay $6.3 million of the billings.

More on Freep.com:

Michigan finds $7M wrongly reimbursed demolition costs

Detroit Land Bank to pay state $5 million in settlement over billing

The suspicions of bid rigging arose in the summer of 2016 during a forensic audit of the city demolition program performed by two firms hired by the state Holland & Knight and Ernst & Young. The suspicions coincided with a three-month suspension of the city's federally funded demolition program imposed by the U.S. Treasury.

The possibility of bid rigging was raised at an Aug. 17, 2016, meeting of the Michigan Homeowner Assistance Nonprofit Housing Corporation, or MHA, which began its audit the previous December.

Holland & Knight along with Ernst & Young have been digging deep into the Detroit Building Authority and findings are not very good. Possible bid rigging going on. Funding has been immediately suspended, minutes from the meeting show.

The minutes represent the first known instance of state officials involved in the Detroit demolition program discussing possible criminal activity.Detroit's demolition program has been under heavy scrutiny for the last two years. Following media reports in the fall of 2015 of skyrocketing demolition prices under Mayor Mike Duggan, federal authorities launched a criminal investigation that remains ongoing.

The MHA, along with its partner agency, the Michigan State Housing Development Authority (MSHDA), reviews the city's demolition invoices and approves federal funding for demolitions of vacant, blighted properties in Detroit.

Last week, government watchdog Robert Davis received complete, detailed minutes of private MHA board meetings as part of a lawsuit his nonprofit, A Felon's Crusade for Equality, Honesty and Truth, filed against the MHA in October. The lawsuit seeks to make sure the MHA is subject to the states Open Meetings Act, and it seeks a copy of the states audit report.

Davis gave copies of the MHA meeting minutes to the Free Press. Although the MHA was created by the state to distribute federal funds, it does not consider itself a public body subject to the states Open Meetings Act.

The minutes show the MHA board received regular updates on the state's audit of the Detroit demolition program. While the meeting minutes say bid rigging was believed to be in play, specific contractors or employees were not named.

The audit findings ultimately were given to the FBI and SIGTARP, a federal watchdog tasked with monitoring the federal funds made available to Detroit for demolitions.

Townley, vice president of the MHA board, said she typically updated the board on the state's Detroit demolition audit. She said she likely was the person who brought up bid rigging as a possibility. But on Thursday she could not immediately recall what auditors had found that drove the discussion.

Davis said the records put the federal demolition investigation in a new light. He said Duggan and state officials have misled the public by downplaying the state audit findings. When discussing the findings at a press conference in January, Duggan said he saw nothing to suggest anything criminal was going on in the demolition program.

This is why transparency is so important in government, Davis said. When you have governmental entities conspiring with one another with concealing the truth to the public. The governor and (the state) all shouldve came out when the mayor flat-out lied and said this is more serious.

Duggan spokesman John Roach denied assertions that the mayor misled the public concerning the demolition program.

"Robert Davis is the one who continually says things that are not true and the facts continue to prove that," Roach said.

Erica Ward Gerson, chairwoman of the Detroit Land Bank Authority, said the state audit was thorough.

"At the end of an exhaustive audit process that lasted several months, (the state) did not find any bid rigging," she said in a statement.

"We worked closely with the state to implement a series of new internal controls. Since those improvements were put in place, MSHDA and the Treasury Department have released another $130 million to continue the demolition program and MSHDA has fully released us from any claims regarding the bid process."

Duggan met with state auditors on Jan. 4 in Chicago to discuss the audit that ultimately found $7.3 million in improper billings.

When the audit was released in January, the city agreed to repay only $1.3 million of the improper billings. The city disputed the rest.

"The feds are doing what they should be doing. We have given them, I think, every single document that exists," Duggan said then. "I have not seen anything in this that suggests anyone did anything criminal."

Eventually, the city and the state reached a settlement. The Detroit Land Bank Authority agreed to repay $5 million in outstanding claims of improper billings. At the same time, the state agreed to make $5 million available to the city to pay for more demolitions.

Contact Joe Guillen: 3131-222-6678 or jguillen@freepress.com.
Post Sat Dec 09, 2017 1:24 pm 
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El Supremo

asbestos in Flint is an issue as well.
Post Sat Dec 09, 2017 1:25 pm 
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