May 11, 2023 - News

Wave of lawsuits targets Detroit commercial property owners

Illustration of a boarded up window with a target painted on the boards.

Illustration: Allie Carl/Axios

A legal blitz against owners of long-standing vacant commercial properties is underway.

Why it matters: The city has filed nearly a dozen lawsuits so far this year with the promise of more to come in an unprecedented burst of legal action to reverse decades of neglect.

  • The suits target some of Detroit's most well-known vacant and blighted properties, which have impeded development in neighborhoods and along commercial corridors for decades.
  • The strategy is to either force property owners to fix up the structures or cede control to the city so they can be demolished or redeveloped.

Driving the news: The city's most recent filing is against owners of the former Mammoth shopping center on the west side that has been vacant for about 20 years.

  • Other targeted properties include Perfecting Church at Woodward and 7 Mile and several vacant buildings owned by prominent investor Dennis Kefallinos.

What they're saying: "You've got Perfecting on 7 Mile and Woodward, you've got the Mammoth building on Grand River and Greenfield — for 20 years have stood vacant, for 20 years no progress, for 20 years no activity," Detroit's corporation counsel Conrad Mallett said last week at a press conference.

  • "That would not be the case in any other metropolitan city across the United States."
City officials hold a press conference outside the Mammoth building in May 2023
Conrad Mallett, at the podium, talks about the city's lawsuit against owners of the Mammoth building. Photo: Joe Guillen/Axios

State of play: The campaign is an extension of the M100 — the mayor's ever-evolving list of vacant commercial buildings to be redeveloped or demolished.

Between the lines: Detroit is using a portion of its federal ARPA dollars to hire lawyers for the effort.

  • Untangling ownership is part of the work. Some properties are shuffled between various individuals and companies to confuse regulators, which Mallett addressed with a warning last week: "You can run but you cannot hide."

The other side: Some owners say they are still working on developing their properties.

  • Purported Mammoth building owner Herb Strather crashed the city's press conference about the lawsuit and said he's trying to build a mixed-use development with restaurants and 100 residential units. "We're happy they're tearing it down. You don't have to sue me. I'll sign right now. Let's tear the building down!"
  • "I like to preserve buildings and save them instead of demolish them," Kefallinos told Crain's. "I know it takes too long, but we're going to continue working on it."
Herb Strather, in a blue blazer, talks to residents about his efforts to redevelop the Mammoth building.
Herb Strather, in a blue windowpane blazer, talks to residents about his redevelopment plans. Photo: Joe Guillen/Axios
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