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Detroit developer buys more than 6000 properties, looks for "public-private alliance"

Oct 30, 2014

Herb Strather announcing his plans for the "blight bundle."
Credit Sarah Cwiek / Michigan Radio

A Detroit developer who just bought a massive chunk of city land says he wants to help community groups revitalize their own neighborhoods.

Herb Strather bought a package of more than 6000 properties from the Wayne County tax foreclosure auction for just over $3 million.

That “blight bundle” was actually meant to discourage bidders from buying up huge numbers of cheap, distressed properties.

But Strather says the land was still at risk of going to “outside” investors, and he bid to prevent that.

“I stopped that!” Strather said. “I’m bidding so we will not get rid of 6000 parcels, so we can joint venture and rebuild, reinvent the city together!”

Strather says that other than “a couple of hundred” parcels he plans to develop himself, he’ll turn the remainder over to churches and community-based groups.

“But the first thing we must do is sequester the land that needs to be redeveloped,” Strather asserted. “We do not want to fall into the hands of speculators, or those who would buy our land and sell it back to us at tremendous prices.”

But there are some kinks in Strather’s plan.

Strather says he wants to form a “public-private alliance” with the Detroit Land Bank Authority—which would have received the land in the “blight bundle” if no one had bid on it.

He says the land bank could use federal funds allocated for demolitions to clear and secure many of the properties.

But land bank spokesman Craig Fahle says that arrangement won’t work.

“Federal law only allows us to use demolition funds on properties for which the Land Bank holds title, not for the benefit of a private developer,” Fahle said. “If Mr. Strather is expecting the Land Bank to pay to demolish properties that he is purchasing, he has misunderstood the law.”

Strather says he’s working with Texas-based Eco Solutions to manage the properties, and his new company, Detroit Bundle LLC, has other partners with “plenty of money.”

Strather has been involved in several major Detroit development projects, and was an initial investor in one of the city’s major casinos. But he’s also been sued several times and owes at least $300,000 in state and federal tax liens, according to the Detroit News.

“I haven’t filed bankruptcy, but there’s a few judgments and liens and things around,” Strather joked during a Wednesday press conference.

Strather says he’s made the 10% down payment required under the terms of the blight bundle purchase agreement.

He must pay the remainder within 14 days. Then he must either secure demolition funds, or submit a development plan to the Wayne County treasurer’s office for approval within 6 months.