[1]Wayne County, Michigan, sold a bundle of more than 6,000, distressed and blighted properties to a single bidder for more than $3 million in the county's tax foreclosure auction earlier this week, according to Wayne County Chief Deputy Treasurer [2] David Szymanski.
Eco Solutions, the party that made the winning bid, was represented by Detroit-area casino developer Herb Strather. For the sum of slightly more than $3.1 million, Eco purchased a package of 6,365 parcels from Wayne County in the auction, an average of close to $500 per parcel.
Strather, who was born and raised in Detroit, has been a well-known real estate developer around the city for more than 40 years. He is the founder and CEO of Strather Academy [3], which trains urban real estate developers. The academy's mission, according to its web site, is "To train the next generation of Detroit real estate entrepreneurs who will rebuild and re-establish Detroit as a world class metropolis."
According to Szymanski, Eco provided an additional down payment of $315,850 (about 10 percent of the winning bid) in addition to their original deposit of $25,000. In the week before the auction, Strather surprised county officials by bidding on the bundle of blighted properties. He placed the bid anonymously.
The bundle includes vacant lots, residential units, and commercial property. Some of the properties can be renovated, but many of the blighted homes will need to be demolished. Strather has announced to the media that he has a five-year, $2 billion plan for developing some of the properties while razing others. The county has set a deadline of two weeks to work out a development plan with Strather for the bundle of properties.
"We have commenced discussion regarding an acceptable development agreement," Szymanski said.
The auction was part of an aggressive foreclosure campaign [4] in Wayne County, where Detroit is the county seat, that includes about 75,000 properties. The number of foreclosure starts in Wayne County has been steadily increasing over the last three years. The county has the authority to initiate foreclosure when a homeowner is three years or more behind on paying property taxes.
Szymanski said that foreclosure is not necessarily the county's goal, however; the goal is to clean up the town by removing blight and at the same time provide assistance or resources to help homeowners keep their homes. Szymanski said of the 56,000 homes Wayne County began foreclosure proceedings on last year, the process was completed on only about 20,000 of them, meaning the county helped more than half of those 56,000 homeowners stay in their homes and avoid foreclosure.