Legislation & regulations

Detroit and Michigan trade $5 million in settlement

The city of Detroit and the state of Michigan are trading $5 million to settle a dispute over improperly submitted invoices for blighted home demolition projects, a report by Crain’s Detroit Business says.

The deal allows both the Detroit Land Bank Authority and the Michigan State Housing Authority (MSHDA) to avoid going into arbitration over disputed demolition costs.

The lank bank previously repaid the state $1.37 million after an audit found some demolition costs that exceeded a $25,000 per-house federal cap.

A six-month administrative investigation of the demolition program and billing practices also set the lank bank back $2.4 million after the program was temporarily suspended for 60 days.

According to Detroit Mayor Mike Duggan, the land bank paid $5 million too much for demolition work. He proposed that the lank bank pay $5 million to the state, and in reverse, the state will pay $5 million to go back into Detroit demolitions—it’s intended purpose.

This settlement reportedly does not end an ongoing federal criminal investigation into the program. As of May 31, the state has given more than $119 million to the land bank for the demolition of 7,488 abandoned homes and blighted properties. More than $139 million remains from the total $258 million the city received in 2013.

Earl Poleski, MSHDA executive director, says in the report that there are new protocols in place to improve program operations.

MSHDA gave the lank bank $88 million in May to keep demolitions ongoing for the next 18 months. The state’s contribution will increase the funds to $93 million. Duggan says the funding will take 7,000 to 8,000 properties down by the end of 2018.

MSHDA was created by the Michigan Homeowner Assistance Nonprofit Housing Corp. to administer federal funding from the U.S. Department of Treasury’s Hardest Hit Fund to demolish blighted homes.

Pittsburgh improves permitting process

The city of Pittsburgh is placing a $5 million bid on software designed to speed up and simplify its permitting process, according to a report by the Pittsburgh Post-Gazette. The current permitting process received complaints from developers and other members of the community.

The city has a contract with Computronix, a Lakewood, Colorado-based government software company, to develop a single program for use by all agencies related to approving building, occupancy and other permits for construction and development. They city will pay $5.6 million over five years.

According to the report, Kevin Acklin, chief of staff to Mayor Bill Peduto, says the goal is to improve the permitting process by avoiding development delays and project money loss.

The city is also receiving a $50,000 grant from the Heinz Endowments for a $145,000 contract with Zucker Systems, a consulting service that conducts organization, management and process studies based in San Diego, to build a simple and more transparent approval process.

The system is designed to allow anyone seeking a permit to submit it electronically and have it reviewed at the same time by any city agencies involved. Once the permit is reviewed, one single response will be given to the applicant. Applicants will also be able to track the proposal through the permitting process.

The city has already cut its initial review time for building permits from 27.5 days in 2011 to 10.5 days, the report says, but response times vary. Currently, since the application may need to go through several difference agencies, it may be revised several times before a permit is issued.