By Steve Neavling
Motor City Muckraker
The FBI is assisting a federal agency’s investigation into Mayor Mike Duggan’s demolition program.
The probe centers around the rising costs of demolitions and questions about whether Duggan and other city officials schemed to award contracts to preferred companies.
The FBI’s Detroit Office confirmed Wednesday that agents have joined the investigation, which was launched by the Office of the Inspector General for the Troubled Asset Relief Program, or SIGTARP.
The investigation involves the Detroit Land Bank and the Building Authority, both of which dole out contracts for demolitions.
The demolition program has been the hallmark of Duggan’s administration. Since he became mayor in January 2014, the city received more than $170 million from the federal Hardest Hit Fund, a TARP program, to demolish more than 8,500 homes.
The average cost of a house demolition under Duggan is about $12,680, compared to under $10,000 under former Mayor Dave Bing, according to city records. The costs increased after Duggan met privately with three contractors in June 2014 to set a price for demolition work. At one point, the average cost of home demolitions reached more than $16,000.
The contractors in question are Adamo, Homrich and MCM Management, which received a combined $71.4 million of the $126.8 million spent so far.
The Land Bank said it welcomes the investigation and pledged to cooperate.
City officials defended the rising costs of the demolitions, saying the work involved more environmental protections and was so unprecedented in scope that resources such as dirt and trucks were harder to come by.
Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.