The identity of the sole bidder in the auction to sell more than 6,000 of Detroit’s foreclosures is no longer a mystery. Herb Strather, a local casino and real estate developer, won the lot for just under $3.2 million. “This is more than just an acquisition of parcels. It’s an opportunity to redevelop the city I was born in and I plan to die in,” Strather said in an interview.
Wayne County acquired the more than 6,000 parcels when previous owners didn’t pay taxes. The county created a “blight bundle” by grouping together about a thousand properties in good shape with roughly 2,000 vacant lots and another 3,000 properties that must be demolished. The wrecking work, which by the terms of the auction must be completed in six months, could cost more than $24 million.
A county official told Bloomberg Businessweek that no one was expected to bid on the bundle, and the lots would have then transferred to the city’s land bank to be sold piecemeal. Proceeds from selling the good properties would have helped pay for demolishing the bad ones.
Strather and his firm Eco Solutions surprised the county by bidding at all. Now that he’s the buyer, he must develop a plan for the bundle. He says he wants to work with “dozens” of community organizations to finance and develop projects, particularly with the larger lots. He plans to keep some of the best properties for his investment group.
“We’re gonna make a profit,” Strather insists, defying predictions of county officials. “Of course we’re going to make a profit.”
For the 3,000 properties he needs to demolish, the developer said he imagines trying to establish some form of joint venture with the city’s land bank to use federal funding. That move could prove to be controversial. “If the thought is ‘Let the land bank demolish all the dilapidated structures and I’m going to take the nice places, sell them off, and make money,’ I don’t think that’s going to fly,” says David Szymanski, the county’s chief deputy treasurer.
Before the sale can close, the Wayne County Treasurer’s office must approve whatever plan Strather puts together, and Szymanski says over the next couple of weeks he will discuss whether there’s a more palatable way to share the costs and burdens of the demolitions. If the county rejects Strather’s plan, the properties will transfer to the city.
Strather is optimistic they’ll work something out. “Right now,” he says, “I am so excited my toes are wiggling.”
