DETROIT — The U.S. Treasury Department is releasing $42 million in federal funding to allow Detroit to continue demolishing thousands of vacant houses.
Funding was suspended in August while Treasury officials reviewed a state audit of how Detroit was spending federal blight elimination money, Mayor Mike Duggan said Monday at a City Hall news conference.
Federal authorities have been investigating the bidding process and costs associated with the demolitions following a review by the Michigan State Housing Development Authority, which distributes federal Hardest Hit Fund money to local communities.
The state housing authority found a number of internal controls that needed improvement at the Detroit Land Bank Authority in managing demolition contracts. Procedures and controls for assessing bids and processing payments to contractors have been strengthened, Duggan said.
Two Michigan State Housing Development Authority employees also will have offices at the Land Bank and Detroit Building Authority to provide compliance support and onsite assurance that all contracts are bid appropriately.
The city pledges its “commitment to achieve full compliance with all federal and state rules and regulations as we go forward,” Duggan said Monday.
Detroit has been awarded more than $128 million in Hardest Hit Funds for demolitions and other blight elimination over the past three years. The $42 million announced Monday is the first installment of a new $130 million allocation for the city.
“We are the most successful city in America in the speed of blight removal, but we have not been the most successful in developing the kinds of controls a program of this size needs,” Duggan said. “Today we’re fixing that.”
More than 10,000 empty structures — mostly houses — have been demolished in the past 2½ years under Duggan’s blight elimination plan, but at least three times that number may need to be razed.
A blight task force survey in 2014 revealed more than 40,000 structures needed demolition.