Why Is Detroit Giving Industrial Slumlords Like Moroun A Free Pass?

Last summer, Handbuilt undertook a large survey of derelict properties in Southwest Detroit owned mostly by companies affiliated with the Moroun Family, which owns the Ambassador Bridge. The family also owns a large amount of land in Southwest Detroit. Embracing a strategy similar to the one employed by the Ilitch family, of “dereliction by design” in Midtown Detroit, the Morouns have been shrewd speculators in a few neighborhoods. Southwest is a primary focus because of its proximity to not only the Ambassador but also the Gordie Howe Bridge under construction. The so-called “land swap” associate with the Conner’s Creek parking lot project netted the family a pretty sweet deal.

What I was curious about was why the Moroun companies evade regulatory scrutiny? Thus began a process of not only documenting these properties, but also figuring out how to trace their ownership. To me, ownership was less important than regulation. I’m not going to narc on my neighbor who has filled his back yard with rusty old cars, because I don’t particularly care. I will, however, fight for the people of Southwest Detroit who might not have the time or particular gall to call the building department out with the full force and effect of spreadsheets and parcel data.

The LLC, An Invisibility Cloak: If You Know How To Use It

There are different levels of property speculation. At the most basic level, you buy a property and sit on it, waiting for, you know, whatever. If you want to be a bit more savvy, you set up an LLC, and that entity holds the property. Thence it becomes much ever more complicated. LLC’s can be tracked to individuals if that individual is a registered agent, listed officer, or shares an address with, another recognizable company.

Many people– for example, the owner of one property on Rosa Parks Blvd.- use LLC’s that cannot be traced back to them directly. This is most common in two cases. One is where an investment manager might not have as much in the way of direct interest in the property. Another is where the investor or owner desires anonymity. This is usually done for nefarious purposes. Let’s take the Rosa Parks property, for example. The registered agent of record is actually a disbarred real estate attorney who has an address in Detroit’s wealthy Indian Village neighborhood. Go figure, right? But this means it’s much harder to figure out who actually owns the property.

A giant trucking terminal at the extreme southwestern edge of the city, nearly bordering on the River Rouge. The property hasn’t received any blight violations in recent memory, save the one that the author issued as an erstwhile BSEED inspector. (Those violations were never corrected and the ticket was dismissed without prejudice). The Gordie Howe International Bridge, currently under construction, will occupy a large swath of land just to the south and east of the pictured block here.
What Is The Blight? Cousin Vinnie Doesn’t Get It

During my brief tenure at BSEED, it was interesting to see what kinds of things the department let slip. I often found myself poking on things to see what would happen– not outside of my daily responsibilities, but to test the integrity of the regulatory system. For example, the Morouns own a large trucking terminal at the extreme southwestern edge of the city. It’s near the new border crossing (currently under construction). The building is serviceable and in use, but it has numerous deficiencies that, well, the city hasn’t ever required them to correct. This is puzzling. It’s also interesting given that this property is going to be worth a lot more once the new bridge is completed.

I delivered a blight ticket to the property referring to a couple of blight violations, and met “Vinnie,” a manager. He was consternated.

“What is the blight?!” an angry Vinnie demanded to know.

For the most part, the likes of the Morouns, Ilitches, etc. believe they are above the law. 7701 W Jefferson, the building of which Cousin Vinnie was the manager as of March 2019, hasn’t actually paid any tickets in recent memory, in spite of the fact that the property, a large portion of which is entirely vacant land, is noncompliant with a slew of regulations.

Out of sight, out of mind

A cursory read of the situation suggests that the Duggan Administration doesn’t want to piss off people with money. But a deeper read is a bit more structural. Irrespective of dynamics of power or class involved with the ownership itself, there’s this more nefarious issue at hand. The owners don’t really care about maintaining these properties because they’re not in the wealthy part of town. Out of sight, out of mind.

Let’s have a look! Here’s the full list of DAH tickets. Prices all include fees. Multiple tickets can be issued at the same time, but different violations assess different fees based on the ordinance referred to in the violation. And, here’s a kicker for you before you start reading. Most of these tickets are the first that have ever been issued to these companies. In decades of ownership. The city’s property maintenance code hasn’t changed majorly since the early 1980’s. The vacant property ordinance has been in place for more than a decade now.

Full List Of Tickets Issued By the Department of Administrative Hearings

2640 Fort St., 20021319DAH: $305.00 (Fall 2020)

2640 Fort St., 20021320DAH: $167.50 (Fall 2020)

1402 16th St., 20021346DAH: $305.00 (Fall 2020)

1402 16th St., 20021347DAH: $85.00 (Fall 2020)

1402 16th St., 20021348DAH: $140.00 (Fall 2020)

1400 15th St., 20021364DAH: $305.00 (Fall 2020)* – probably Moroun-owned 

1400 15th St., 20021365DAH: $85.00 (Fall 2020)* – probably Moroun-owned

1435 14th St. Not Ticketed

2800 Standish (HARMONIE PLAZA, INC.; Kefallinos-affiliated)

1339 14th St. (NORTHERN BORDER TRANSIT LLC; Moroun-affiliated)

19053853DAH: $140.00 (Spring 2020)

20021349DAH: $305.00 (Fall 2020)

20021350DAH: $85.00 (Fall 2020)

1411 15th St. (NORTHERN BORDER TRANSIT LLC; Moroun-affiliated)

20021342DAH: $305.00 (Fall 2020)

20021343DAH: $140.00 (Fall 2020)

20021344DAH: $85.00 (Fall 2020)

20021345DAH: $140.00 (Fall 2020)

1401 14th St. (NORTHERN BORDER TRANSIT LLC; Moroun-affiliated)

20021338DAH: $305.00 (Fall 2020)

20021339DAH: $140.00 (Fall 2020)

20021340DAH: $140.00 (Fall 2020)

20021341DAH: $85.00 (Fall 2020)

2101 20th St. (MEXICAN TOWN REAL ESTATE COMPANY, LLC; Moroun-affiliated)

This one has an incorrect address of record listed. That’s useful if you’re trying to argue– correctly- that you never received a notice that you should well have received!

20021358DAH: $140.00 (Fall 2020)*

20021359DAH: $140.00 (Fall 2020)*

20021360DAH: $140.00 (Fall 2020)*

20021366DAH: $140.00 (Fall 2020)

20021367DAH: $140.00 (Fall 2020)

2300 23rd St. (UST PROPERTIES OF MICHIGAN LLC; Moroun-affiliated)

20021324DAH: $305.00 (Fall 2020)

20021325DAH: $85.00 (Fall 2020)

20021326DAH: $140.00 (Fall 2020)

2220 24th St. (UST PROPERTIES OF MICHIGAN LLC; Moroun-affiliated)

20021335DAH: $305.00 (Fall 2020)

20021336DAH: $140.00 (Fall 2020)

20021337DAH: $167.50 (Fall 2020)

2287 24th St. (UST PROPERTIES OF MICHIGAN LLC; Moroun-affiliated)

20021333DAH: $305.00 (Fall 2020)

20021334DAH: $85.00 (Fall 2020)

Other Properties (UST PROPERTIES OF MICHIGAN LLC)

2227 24th St., 20021327DAH: $305.00 (Fall 2020)

2227 24th St., 20021328DAH: $85.00 (Fall 2020)

2217 24th St., 20021329DAH: $305.00 (Fall 2020)

2217 24th St., 20021330DAH: $85.00 (Fall 2020)

2207 24th St., 20021331DAH: $305.00 (Fall 2020)

2207 24th St., 20021332DAH: $85.00 (Fall 2020) 6745

3564 Toledo, 20021321DAH: $305.00 (Fall 2020)

3564 Toledo, 20021322DAH: $85.00 (Fall 2020)

3564 Toledo, 20021323DAH: $140.00 (Fall 2020)

3320 Ruskin, 20021351DAH: $305.00 (Fall 2020)

3320 Ruskin, 20021352DAH: $85.00 (Fall 2020)

* – It is possible that these tickets have been paid, but it is unclear based on the DAH system.

Takeaways: The Quest For Accountability

This list alone totals $7,890 in fees, not including late fees, from the point I last looked up the tickets (today). Now, think about that over years. With the exception of maybe three properties on this list, none of these properties had tickets listed. I figure the dollar figure here probably represents about a third of the Moroun’s hypothetical total of instantaneous violations, if we consider parcels I haven’t tracked. (There were certain geographic limitations to my study).

The Moroun Empire has enough money to pay these tickets. That’s not at issue. What we should be concerned about is why the third wealthiest in the city’s holy trinity of billionaires– Gilbert, Ilitch (and his descendents), and Moroun (and his descendents), descending in that order- has only recently started to be ticketed by the regulators. These are properties in prime locations, within a two or three mile radius of downtown Detroit, where real estate prices have been soaring amid a severe shortage of new housing units and a preponderance of space devoted to parking lots for the divine motorcar.

What should the regulators do?

In my opinion– as someone whose only conflicts of interest are that I’m a neighborhood resident and have a vested interest in not having to worry about what my dog could possibly be getting into as we walk past one of these trash-strewn vacant lots owned by billionaires- the city should ramp up its enforcement efforts. There is already a tacit and gentle sort of agreement in the building department that the city doesn’t go after owner-occupants unless— and really only if– they are sent out on a complaint.

This means that the regulatory apparatus is appropriately deferential to longtime residents who were here before the Ivy League technocrats appointed by Mike Duggan to “fix” the city began issuing their edicts from the Ivory Tower (I guess if we’re being technical, the Coleman A. Young Municipal Center is cladded in marble– a marble tower?). The opposite side of this coin, though, is one the city hasn’t appropriately considered quite yet. And that’s the idea of appropriately going after the landowners who can afford to pay for the fines for their crimes of wanton property speculation at the expense of neighborhood value.

Imagine if these buildings and the sites they sit on could all be developed into quality housing? Imagine if these lots actually generated value for a cash-strapped city that has been hammered by COVID and continues to struggle with piss-poor infrastructure and leadership that is more focused on corporate empowerment than on human development. Certainly, starting to write the damn tickets would at least incentivize thinking about how to move the needle.

The author worked for BSEED for about 45 minutes from 2018-2019.

My study began with this neat little triangle in what is called the “West Side Industrial” neighborhood. 1339 14th St., a low-slung, deteriorated trucking terminal building surrounded by a decaying lot, was the center. The district is neither Corktown, nor Southwest, nor particularly West Side, for that matter. The aforementioned Rosa Parks building is pictured to the far right (near where the US-Canada rail tunnel descends into the underworld). The Michigan Central Station project is just north of the district pictured here. We’ve also got a nice mixture of new Detroit, old Detroit, and the liminal areas of either one: The Quicken Loans Data Center can be seen (top right), the erstwhile Ponyride, new construction vinyl-sided homes (left), Green Dot Stables (bottom), and Honey Bee La Colmena, the greatest supermarket that has ever existed. Dennis Kefallinos owns the massive warehouse building that is just north of the train tracks off Bagley St. (top-center-right). That building hasn’t been ticketed in recent memory.

Nat M. Zorach

Nat M. Zorach, AICP is a city planner, community development professional, and MBA candidate at American University's Kogod School of Business, based in Detroit.

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