July 11, 2014 The Honorable Brenda Jones, President Detroit City Council Coleman A. Young Municipal Activity Center 13th Floor Detroit, Michigan 48226 Subject: Quarterly Report, Detroit Land Bank Authority Dear Council President Jones: On behalf of the Detroit Land Bank Authority (DLBA), I am pleased to submit this report of activities for the most recent three month period. The quarterly report is submitted pursuant to the Land Transfer Agreement between the City of Detroit and the Detroit Land Bank Authority as adopted by the Detroit City Council on April 15, 2014. While much work remains to be done, the DLBA takes pride in its accomplishments over the past three months. Those accomplishments are detailed in the following pages and include: Hiring a strong professional staff to implement the goal of eliminating blighted residential buildings and strengthening neighborhoods; Expanding Hardest Hit Fund neighborhoods and strengthening the pipeline demolition of blighted properties within HHF areas; Launching and branding the www.buildingdetroit.org web site for the successful auction of DLBA-owned houses; Registering more than 6500 interested bidders on the DLBA auction site; Selling more than $1 million worth of DLBA owned houses; Hosting 15 open houses in which more than 2700 persons expressed interest in buying a house in Detroit; Detroit Land Bank Authority | 65 Cadillac Square | Detroit, MI 48226 | office: 313.974.6869 | fax: 313.285.9019 Launching a Nuisance Abatement Program which resulted in more than 200 homeowners agreed to either fix up their properties of forfeit them; Exercising a Right of First Refusal with the Wayne County Treasurer over tax foreclosed properties so that they could be either auctioned and renovated or demolished; Modernizing procedures and adopting best practices in the areas of sale, demolition, and use of demolished properties; and Adopting a realistic yet aggressive budget that calls for the on-time spending of all funds allocated under the Hardest Hit Fund program, the auction of repairable homes, and elimination of blight through the Nuisance Abatement Program. The Detroit Land Bank Authority is especially grateful to the Detroit City Council for the unprecedented confidence and trust the Council has placed in the DLBA, particularly by its willingness to entrust the DLBA with over 16000 abandoned homes for demolition and disposition. The DLBA is stronger and more able to serve its mission of repurposing abandoned properties in Detroit as a result of this relationship, and looks for that relationship to strengthen and mature through its continued consultation with the Council. The DLBA welcomes your feedback and suggestions in response to this report. Respectfully Submitted, Richard Wiener Executive Director CC: Members, Detroit City Council Detroit Land Bank Authority | 65 Cadillac Square | Detroit, MI 48226 | office: 313.974.6869 | fax: 313.285.9019 Disposition Program 3 The Disposition program within the Detroit Land Bank Authority (DLBA) was established in February, 2014 with the hiring of Deputy Director, Dekonti Mends-Cole to lead the program. The program consists of Home Auctions, Side Lot Sales, and the acquisition of occupied properties. Previously, the program served solely as disposition of rehabbed properties under the Neighborhood Stabilization Program. Staff Dekonti Mends-Cole serves as Deputy Director of the DLBA and directs the disposition program. She formerly worked on restructuring efforts under the Strong Cities Strong Communities program. Her background includes working on community and economic development projects in the Middle East and Africa for the United Nations and advising UK local and national governments, including the London Olympic Legacy projects. The Disposition team consists of highly-skilled staff members with backgrounds in running CDCs, management of HUD programs, managing large scale economic development, GIS and data, marketing, clearing title, and closing. There are ten full- time staff members and 16 part-time contractors: Darnell Adams; Mary Beth Baumeister; Dave Brown; Richard Cannon; Darryl Earl; Tatiana Grant; Gina Jackson; Juanita Jones; Rob Linn; Dana Politi; Kevin Robishaw; and Rob Saxon. Job Fair On May 30, the Land Bank held a job fair at the University of Detroit Mercy’s law school, which was generously hosted the event. Over 40 part-time positions serving as hosts for the BuildingDetroit.org open houses and 4 full-time jobs were advertised to Detroit residents. The Job Fair was promoted through several channels including Detroit Employment Solutions, who conducted pre-qualification surveys. Over 250 applicants attended the job fair where the DLBA received several highly qualified and abled Detroit applicants. The first group of enthusiastic and high caliber professionals have been hired. The DLBA has brought on 15 Detroit residents, and one is a veteran. Auction Programs On May 5th, the Disposition team rolled out the BuildingDetroit.org auction with huge success. The auction sells two vacant homes a day that are in need of rehabilitation. With the theme “Neighbors Wanted” the DLBA has structured the auction program to encourage responsible investment that will rapidly change the landscape of our neighborhoods. All successful bidders are required to bring the property up to code and occupied within six months (nine months for historic properties). Eligibility to participate is restricted to individuals who are Michigan residents, Michigan incorporated businesses and non-residents who intend to occupy the property. Additionally, individuals with any material blight violations or delinquent property taxes are not eligible to win the properties. 4 Within the first two weeks over 5,000 people registered to bid and more than 1,050 attended the first open house in East English Village. The DLBA is extremely grateful to the Detroit City Council for their support in launching this initiative. Open Houses Attendance Number of Date Open House Location Attendees Sunday, April 27, 2014 East English Village 1,050 Saturday, May 17, 2014 Boston Edison 700 Sunday, May 18, 2014 Osborn 250 Saturday, May 31, 2014 Morningside 150 Sunday, June 1, 2014 East English Village 150 Saturday, June 14, 2014 Cornerstone/Islandview 67 Sunday, June 15, 2014 Warrendale/Old Redford 115 Saturday, June 21, 2014 Greenfield Grand River/Osborn/Southwest 150 Saturday, June 28, 2014 Osborn/Cornerstone/Southwest 48 Pilgrim Village/Bagley/Fitzgerald/Martin Sunday, June 29, 2014 100 Park The open houses serve as a community building tool and is co-organized with residents who sell the neighborhoods through volunteering as hosts and tour guides. The home tours are festive events in which vendors such as financial institutions, contractors, Detroit Historic Commission (in Historic Districts) attend to attract customers and inform potential buyers. Bus tours are also available for individuals who want to see all the homes. Sales Within 50 days of launching, the auction has generated $1,000,000 of purchase commitments. It has dispelled many myths of the strength within the Detroit housing market. Our highest sale is $97,000 in Boston Edison, followed by $87,000 in Woodbridge, and $62,000 in Islandview. Bidder Statistics Of 6,785 registered bidders, 2,962 have a Detroit address. Attached is a heat map of the initial set of bidders (first 5,000). 5 There are currently 61 houses that we have investor or non-investor homebuyer information for. Out of the 61, 23 are investors (38%) and 38 are non-investor homebuyers (62%). Of the 61, there are currently 19 non-investor homebuyers outside of Detroit (31%) and 17 investors outside of Detroit (28%). Rehab Financing A key component to encouraging investment in auction properties is through making rehab dollars available to auction winners. The DLBA is working with Chase and Talmer Banks to provide loan options and low cost rehab financing to owner- occupant bidders. Talmer Bank has offered to provide $1,000,000 in $25,000 forgivable loans that will “burn-off” at a rate $5,000 dollars a year for 5 years as long as the owner stays in the property. Nonprofit, Faith, and Community Organization Policy The DLBA has finalized, with City Council, the nonprofit, faith- and community based bulk disposition program. Similarly, the DLBA is working with Community Development Financial Institutions (CDFI) and financial institutions who are interested in providing low cost financing to these groups. Acquired Occupied Policies One of the first policies passed by the new Board is the acquired occupied properties. The DLBA is working with Enterprise Community Partners to identify skilled providers to ensure that once legal owner occupants or tenants stay in the City. Side Lot Program The side lot sale will launch in July 2014. Side-lot properties in the Hardest Hit Fund (HHF) areas will be sold for $100 each. There are currently 254 properties that will be sold in batches to maintain a smooth flow of property sales during this trial period. The current buildingdetroit.org website will be edited to add a function for interested buyers to submit their application and payment. Deeds will be available for pickup in the seven District Managers offices. Attached: Page 7: BuildingDetroit.org Home Page Page 8: Map: BuildingDetroit.org bidders by zip code Page 9-10: Properties auctioned by date and purchase price 6 7 8 Address Neighborhood Area Auction Date Final Sale Amount 4184 Bishop EEV 05/05/14 $34,100.00 4335 Bishop EEV 05/06/14 $30,100.00