Detroit's demolition department seeks to double budget next fiscal year

Officials from Detroit’s demolition department are asking City Council to double the department's budget in the 2024 fiscal year to eliminate blight and transfer employees from the general services department.

The department’s budget would skyrocket from $10.6 million to $21.3 million, if City Council approves the changes. Director LaJuan Counts told council members that the city’s blight remediation fund to address emergency demolitions would be backed by surplus dollars from the previous year. The department currently relies on Proposal N bond dollars to eliminate or stabilize publicly owned structures but as Mayor Mike Duggan said in his State of the City address, the city is shifting toward privately owned properties.

City Council can make changes to the request before the body adopts the budget on April 10.

“The demolition department's immediate goal under Prop N is to ensure the demolition of 8,000 residential structures. But there needs to be a plan to (maintain) the blight remediation efforts and prevent this volume of demolition ever repeating itself,” Counts said. “The demolition department will be able to timely address these privately-owned structures and eliminate the safety concern through a scheduled demolition. By including it in the budget, a funding means is provided to actually execute these demolitions.”

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The department aims to target 128 high-priority properties for demolition or redevelopment over this year and next. They include the M100, or the "mayor's 100" list of properties that need to be remediated. Duggan promised to eliminate the city's blighted structures by the end of his term in 2025.

Of the 128 properties, 47 are privately owned. About 85 would be assigned to demolition contractors this year and the remainder would be allocated next year. A number of structures are expected to come down this year but some may be demolished in the following year.

The city will then tap into its next round of 204 commercial properties, half of which are expected to be privately owned. The department expects to grow from 83 to 146 employees in the 2024 fiscal year if the changes are approved, records show.

Of the roughly $10.8 million hike, 60% — or about $6.5 million — includes an increase in professional and contractual services, which Deputy Director Tim Palazzolo said encompasses an increase in the number of demolitions the city is targeting, primarily privately owned structures.

“That is also encompassing both residential and commercial targets where there is a private owner who has neglected their property. We are going to address that blight and then we're going to circle back and go after the owner for those costs,” Palazzolo said.

Another part of the $6.5 million will account for contractual staff currently funded through bond dollars.

“Because the bond program at some point will phase out, we are going to run out of bond dollars. They're actually getting ahead of the game and starting to move those costs over into the general fund allocation,” Palazzolo said.

About 35% of the proposed increase would account for rolling in the capital project management and facilities maintenance staff from general services with the aim of changing the division name to the Construction and Demolition Department. That $3.8 million includes salaries, fringe benefits, supplies and other daily operating expenses.

Counts previously headed the capital and facilities maintenance teams prior to leading demolitions. She requested moving the teams under her umbrella when taking the role in 2020 but the mayor would not approve doing so at the time, Counts said at the hearing.

“It is in my wheelhouse to be able to manage projects of the capital needs portion as well as maintaining the facilities. At this point, there is not a person of my caliber that exists over on the (General Services Department) side who can actually wear those hats,” Counts said.

Before that can happen, the administration is required to submit the change to city council, which needs their approval, said David Whitaker, director of the council’s legislative policy division.

“I think part of it at the time was the urgent need that the administration saw to consolidate the demolition activities under one umbrella immediately and get that done and get that addressed. And I think that the initial thought of putting anything else on this team was a concern for the administration,” Palazzolo said, adding that amid business shutdowns at the height of the COVID-19 pandemic officials were able to identify services and resources needed to streamline the process.

Dana Afana is the Detroit city hall reporter for the Free Press. Contact: dafana@freepress.com or 313-635-3491. Follow her on Twitter: @DanaAfana.

This article originally appeared on Detroit Free Press: Detroit demolition department proposes $10 million budget increase