Rural Michigan chef nets James Beard nod HELPING CHANGE A NARRATIVE City of Detroit rehabbed more homes than it demolished in 2022

ARIELLE KASS

A sharp increase in the number of houses the Detroit Land Bank Authority sold beginning in 2020 helped fuel a shift in the city’s residential real estate ecosystem.

In 2022, the number of Detroit homes that were rehabilitated exceeded the number torn down. e gures mark a turning point in a city that had “somewhere north of 40,000” dilapidated homes to demolish as of 2014, said Tammy Daniels, the land bank’s CEO.

e city’s demolition department recorded 1,974 home demolitions in 2022; the land bank said 2,181 houses nished their rehabilitations last year. An additional 1,021 homes were stabilized for future rehabilitation, according to data from the demolition department. At the end of December, the land bank had fewer than 10,000 homes in its inventory.

“It means right now, the end of abandoned houses in Detroit is within our grasp,” Mayor Mike Duggan said.

Duggan said the interest in restoring city houses would likely lead to more being pulled from the demolition pipeline. Of the 4,227 homes the land bank has slated for demolition, he said he expects 500 to 1,000 to be rehabilitated instead. Duggan called it an exciting time in the city, saying it was the rst time in generations that more homes were saved than destroyed. e land bank was selling some 200 homes a month before the coronavirus pandemic. en in 2020, sales increased to about 600 monthly.

“We were shocked at the number of sales we were making during the pandemic,” Daniels said. “It skyrocketed.”

And it was quite a change.

Between 2014 and 2020, more than 15,000 houses in the city were knocked down, the land bank said. Since 2014, a total of 8,657 homes once owned by the land bank were rehabilitated, with the most coming last year. Nearly 2,000 are occupied and still in process.

“It’s a phenomenon that got all of us very excited,” said Rob Linn, the land bank’s director of planning and analysis. “We were pulling a lot out of the demo queue because we saw it pick up so much.” e owner of the former Plaza Hotel & Conference Center in South eld has yet again led for Chapter 11 bankruptcy protection. is second bankruptcy ling also comes on the eve of a key event — an Oakland County Circuit Court judge’s hearing on whether to appoint a receiver, a renewed motion for which South eld led in December. e property has been the site of a re, various code violation citations and other issues that generally make the city consider it dangerous. e December motion for a receiver says more recent incidents at the property include someone throwing items from the building’s roof, damaging a vehicle. It says people continue to inhabit the property. e result of the Chapter 11 case should be a sale of the property “for the most value” and also to “ gure out who gets the proceeds,” Bassel said.

An entity called Shefa LLC, which owns the 14-story eyesore at 16400 J.L. Hudson Drive, claims assets and liabilities both of between $1 million to $10 million with creditors totaling between one and 49 in court documents led two weeks ago.

Shefa, registered to Montreal resident Sidney Elhadad, previously led for Chapter 11 bankruptcy protection in February 2014 just before a scheduled foreclosure auction of the property that had racked up some $4.1 million in unpaid taxes and other bills.

Robert Bassel, Shefa’s attorney, said the bankruptcy ling last week was a result not only of the impending hearing on a receivership but also whether his client wanted to continue spending money in a protracted legal battle that has been litigated in several courts over many years.

“It’s not to shed debt,” Bassel said, noting that Shefa is current on its property taxes and water and sewer bills.

“It’s basically the reality that this particular asset is worth more value to someone who has a clean slate with the city of South eld than it does with the current owners. It’s business. Not much more to it. It should be sold for the most value. And the bankruptcy code determines who allocates the proceeds.” e city has repeatedly sought a receiver for the property, which Elhadad bought in 2009 in foreclosure. It has said Elhadad has not met promises made in his previous bankruptcy set- required to make $2.1 million in improvements, plus get site plan approval within six months of the February 2016 approval of the con rmation order. However, the site plan expired a year after it was approved and no building permits were issued, according to earlier court documents. e hotel closed in 2010 when water and utility service was shut o due to nonpayment.

Elhadad has attempted before to sell the property, enlisting the Southeld o ce of Colliers International Inc. to market it to potential buyers as a redevelopment play, as we reported in April.

One of the side issue has been how the redevelopment of the former Northland Center shopping mall site plays out and, now with construction underway on a large-scale e ort to transform that massive site nearby, the former Plaza Hotel — formerly the Michigan Inn — becomes more valuable, even if it is in dire need of a massive overhaul.

However, the city says Shefa — without getting permits — started internal demolition even though there is asbestos at the hotel. e 2019 re was caused “by an intruder who gained access because the property had not been secured,” earlier court lings from the city say.

Some three dozen code violations have been issued at the property since 2013, the city says, including six after a district court consent order in January 2021 to board up broken windows and doors, keep the property free of debris and secure the property.

Shefa paid about $10.4 million for the hotel, which sits across from the former Northland Center mall that’s being redeveloped and next to Ascension Providence Hospital, in a November 2009 foreclosure auction, according to South eld land records.

In the months prior to the sale, the outstanding water bill alone was north of $300,000, records show.

—Robert Bassel, Shefa’s attorney

tlement and that the property has fallen even further into disrepair in the years since, including a 2019 re. Several dozen code violations have been issued over the years, the city says.

In court lings, Elhadad has claimed that the city and Downtown Development Authority were embarking on a land grab and suggested that antisemitism was at play.

In bankruptcy court lings from last month, Shefa says it owes some $367,000 to Trantor Realty Inc. in Saint-Laurent, Quebec, plus unknown sums to the city and Oakland County, plus an attorney as well as building management company. A meeting of creditors is scheduled for March 7.

A South eld spokesperson did not return a request seeking comment.

e city has a rst-position mortgage on the property, and Shefa was

Kohl’s store at Westland Center for sale e 91,000-square-foot Kohl’s department store at Westland Center is for sale for $20 million.

It is currently owned by Hewlett, N.Y.-based Bluejay Management LLC, which bought it in 2013, according to CoStar Group Inc., a Washington, D.C.-based real estate information service.

Marketing materials from Marcus & Millichap Real Estate Investment Services Inc. say that the property generates about $1.1 million in net operating income with 14 years remaining on a 19-year lease expiring in 2037. ere are four ve-year renewal options.

— Crain’s reporter Kurt Nagl contributed to this report.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB