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Thu February 3, 2011
Report: How land speculators in Detroit make a buck
"If you walked up to him on the street, you wouldn't know that he was a land baron. He's a guy in blue jeans walking around looking like he's working on somebody's building."
- Detroit city attorney Avery Williams talking about Detroit land speculator Michael Kelly.
Christine MacDonald of the Detroit News has a story on how land speculators make money in the city of Detroit.
MacDonald profiles one of the more prolific speculators, Michael Kelly.
The business model for a successful land speculator in Detroit is simple - buy a lot of land for a little money, then sit on the property until it sells for more than you paid for it.
The News interviewed John Mogk for the story, a Wayne State University law professor "who studies land." Mogk says prospectors like Michael Kelly could easily get in the way of redevelopment plans in Detroit, like Mayor Bing's Detroit Works Project:
...speculators threaten to "hold the city hostage" as Bing works to reinvent Detroit. In the next few months, the mayor could outline his plan to improve viable neighborhoods by abandoning desolate ones, offering incentives to residents to relocate and buying land from private owners. No matter what he decides, Bing can expect lengthy and costly lawsuits from speculators, Mogk said.
Kelly's laywer is quoted in the article saying, "Mr. Kelly is a diligent, honest and otherwise savvy businessman who has now-and-again prospered in the uniquely challenging environment of the city of Detroit."
The News produced an excellent video highlighting the challenges facing the city's redevelopment, one being the sheer size of the city's borders: