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10 Detroit Demolition Contractors Waiting for $8.7 Million

Demolition contractors who have been clearing Detroit of its blighted and abandon buildings have been waiting months to get paid

March 19, 2018

The Detroit Free Press reports demolition contractors who have been clearing the city of its blighted and abandon buildings have been waiting months to get paid, a particular hardship because the city has made it a point to use small and minority owned businesses for the massive program, estimated to clear up to 40,000 structures.

Up to $8.7 million is owed to contractors has been delayed by issues between the Detroit Land Bank Authority (DLB), the Michigan State Housing Development Authority (MSHDA) and Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA).

Detroit received $258 million in federal Hardest Hit Funds and has spent $144 million, the Detroit Free Press report says. Detroit Mayor Mike Duggan has a goal to demolish all blighted and abandoned homes in the city by the end of 2019.

The problem came to light during a Detroit City Council committee meeting in late February, when council members and Ombudsman Bruce Simpson questioned Land Bank officials about the reported payment issues, after being notified by contractors.

The payments delay is being blamed on contractors submitting incorrect or inadequate invoices, DLB not submitting approved invoices to MHA, or MHA's review processing procedures.

Worse, every time a questioned invoice is revised and sent back into the process, the clock starts back at zero, essentially putting that contractor at the back of the line.

According to the Press, outstanding balances were owed these contractors as of Feb. 4:

  • Able Demolition: $1.3 million
  • Adamo Group, Inc. : $1 million
  • Blue Star: $229,500
  • Direct Construction Services, LLC.: $256,966
  • Esso Wrecking Co.: $24,400 (as of March 15)
  • Gayanga Co.: $407,790
  • Homrich: $792,577
  • Rickman Enterprise Group: $1.6 million
  • Salenbien Trucking & Excavating Inc.: $1.2 million

Detroit has cleared about 14,000 structures since 2013, leaving 26,000 to go to make the mayor's goal. Read more in the Detroit Free Press report Millions Owed To Detroit Demolition Contractors, Raising Concerns.

 

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