Prelude To Detroit: The Residuals Of Kamala Harris - Kofi Bonner Takes Over Bedrock

I wonder if anyone is going to ask Kamala Harris about her time with Kofi Bonner.

Quicken Loans agrees to $32.5 million settlement in federal mortgage fraud lawsuit

#maytheheavensfall

Dan Gilbert's Bedrock hires Kofi Bonner as new CEO

Kofi Bonner

Kofi Bonner has been named CEO of Bedrock, the company announced Wednesday. The former Cleveland Browns chief administrative officer and California developer replaces Matt Cullen, who left Dan Gilbert's Detroit-based real estate development company last month to work on two Ohio casinos.

Bonner starts Sept. 21. Bedrock said that Bonner has "extensive experience in leading complex development projects in metropolitan areas."

Kofi Bonner is the new CEO of Bedrock.
As co-chief operating officer for Irvine, California- based FivePoint Holdings, Bonner led the development of projects including San Francisco Shipyard and Candlestick Communities.

“I look forward to building on the accomplishments of Mr. Gilbert and the talented team at Bedrock by advancing the transformational development program, partnering with the community to deliver positive social outcomes and working with local businesses to further the incredible momentum that Detroit and Cleveland have seen over the last decade," Bonner said in a statement.

Bonner was the executive vice president and chief administrative officer of the Cleveland Browns for seven years where he oversaw business operations and the development of the Cleveland Browns Stadium, according to Bedrock.

His other past experience includes roles as an affordable housing developer for Oakland Community Housing Inc.; redevelopment director for Emeryville, California; director of community and economic development and interim city manager of Oakland; and chief economic advisor to Willie Brown, then Mayor of San Francisco.

“With his extensive experience leading landmark projects on the West Coast and the years he spent in Cleveland with the Browns, Kofi Bonner is the right leader to build on Bedrock’s nearly 10 years of transformational development work,” said Bill Emerson, Bedrock Vice Chairman. “Bedrock has a really exciting future as momentum builds at the Hudson’s Site, Book Tower and dozens of other projects, and I look forward to partnering with Kofi to ensure they have a positive and lasting impact on the communities where we serve.”

Bill Emerson, the acting CEO, will retain his role as vice chairman of both Bedrock and Rock Holdings Inc.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Faked cleanup at Hunters Point Shipyard much worse than Navy estimates

The U.S. Navy is drastically understating the severity of the ongoing environmental scandal at its former shipyard in San Francisco’s Hunters Point neighborhood, an official with the U.S. Environmental Protection Agency declared in newly released documents.

The biggest redevelopment project in San Francisco since the 1906 earthquake, with 12,000 planned housing units as well as millions of square feet of office and retail space, transformation of the former warship repair base and nuclear weapons testing laboratory—an EPA Superfund site contaminated with industrial and radioactive pollution—has largely been on hold since 2016, when the EPA halted land transfers while a fraud scandal could be unraveled.

Workers with Tetra Tech, a Pasadena-based firm with a history of winning government contracts, first came forward beginning in 2012 with allegations that the cleanup had been faked on the orders of higher-ups at the company.

A review of Tetra Tech’s data, conducted last year by other contractors hired by the U.S. Navy and first published by Curbed SF, found that as much as 49 percent of the company’s work had signs of manipulation or outright falsification and could not be trusted.

However, an independent review by the EPA found that the Navy dramatically understated the scope of the problem. According to the EPA, as much as 97 percent of the cleanup data is unreliable and must be retested, John Chestnutt, manager of the EPA’s local Superfund Division, wrote in a December 27 letter.

“The data analyzed demonstrate a widespread pattern of practices that appear to show deliberate falsification, failure to perform the work in a manner required to ensure [cleanup] requirements were met, or both,” Chestnutt wrote.

Chestnutt’s letter was obtained and published Monday by Public Employees for Environmental Responsibility (PEER), an advocacy group based in the Washington, D.C., area.

The EPA’s current review only covered about 40 percent of the base. However, the EPA’s findings echo criticism of the Navy’s handling of the scandal from environmental watchdog groups and neighborhood advocates.

Tetra Tech first admitted to providing false soil samples in 2014, but was allowed to continue working after blaming the problem on low-level employees and submitting other workers to “ethics training,” excuses and solutions the Navy appeared ready to accept until more whistleblowers came forward alleging more widespread and systemic fraud—allegations that have now been sustained.

“What makes these findings so remarkable is that the Navy was on notice for years that it had a major data meltdown on its hands yet is still trying to cook the books,” said Jeff Ruch, PEER’s executive director. “The Navy created an environmental nightmare on this stretch of the San Francisco Bay but instead of cleaning it up has spent the past several years compounding it.”

The Navy created an environmental nightmare on this stretch of the San Francisco Bay but instead of cleaning it up has spent the past several years compounding it.
Derek Robinson, the Navy’s program manager for Hunters Point, did not respond to an email or a telephone message seeking comment.

Michele Huitric, a spokesperson at the local branch of the EPA, did not offer comment to Curbed SF. In a statement issued to the San Francisco Examiner Monday, Huitric said that the EPA, which is responsible for overseeing the Navy’s cleanup of the shipyard, is “pleased” that the Navy will be “resampling the impacted parcels.”

The Navy is supposed to begin retesting contaminated shipyard land sometime this summer. No timeline or start date for that work has been publicly released.

According to Ruch, the shipyard scandal is “unfolding into the biggest case of eco-fraud in U.S. history.” Only the Volkswagen emissions scandal, in which the automaker sold 500,000 cars designed to cheat the Clean Air Act, can compare, Ruch told Curbed SF.

The shipyard is divided into alphanumeric parcels. In a review of the work on Parcel B, the Navy found issues with 15 percent of the data collected. On Parcel G, the Navy recommended 49 percent of the data be resampled.

But according to a “technical team including national experts in health physics, geology, and statistics” assembled by the EPA, 90 percent of the data on Parcel B is untrustworthy. On Parcel G, 97 percent of the data is “suspect,” according to the EPA.

Tetra Tech workers falsified data in a variety of ways. These include pulling soil samples from an area known to be clean—the site of a former movie theater—and passing them off as soil from areas known to be dirty; running scanners too quickly to detect contamination; faking chain-of-custody records; and faking results at on-site testing laboratories.

Together, those two parcels comprise about 40 percent of the base’s land area. According to plans filed by FivePoint, the developer of the SF Shipyard, those parcels are the planned future homes for the area’s densest residential development and the core of a retail area.

FivePoint is closely associated with Miami-based homebuilding giant Lennar Urban, which in turn has close ties to the local Democratic Party power structure in San Francisco.

The development behemoth’s regional vice president, Kofi Bonner, is a former aide to Willie Brown, San Francisco’s former mayor. And Brown is a principal in Golden Gate Global, an investment fund that’s luring overseas investors to sink capital in the shipyard project in exchange for visas.

California’s two U.S. senators are part of the same San Francisco-based power circle: former state attorney general Kamala Harris is a Brown associate who served as city district attorney. And senior U.S. Sen. Dianne Feinstein is a former San Francisco mayor.

Yet for some inexplicable reason, “we’re not seeing California’s or even San Francisco’s delegation up in arms about this,” PEER’s Ruch noted. “San Francisco’s members of Congress are very well placed. They could enact revenge. They could force hearings.”

“You would think at the head of the line of aggrieved parties would be the U.S. Navy, but they don’t appear to be aggrieved,” he added. “There are no consequences.”

In a statement emailed to Curbed SF, Taylor Griffin, a spokesperson for House Minority Leader Nancy Pelosi, who represents most of San Francisco in Congress, said Pelosi and her staff “continue to closely monitor” the situation, and has been in “close touch” with both the EPA and Navy.

“Public health and safety remains our top concern, while working to ensure the timely delivery of long-awaited housing and jobs when the cleanup is completed,” Griffin wrote.

Ironically, under embattled EPA Administrator Scott Pruitt, cleaning Superfund sites has been a stated priority—and a source of rare praise for the Trump Administration from environmental advocates, who have credited Pruitt with pushing private companies to perform “aggressive, accelerated cleanups,” as the Washington Post reported in January.

[M]uch of the $1 billion in taxpayer money spent on cleaning up the shipyard has gone to waste.
Meanwhile, the fraud means that much of the $1 billion in taxpayer money spent on cleaning up the shipyard has gone to waste—and Tetra Tech, the contractor responsible for the faked data, has largely escaped punishment.

The company, which posted profits in excess of $350 million last year, managed to escape paying a $7,000 fine levied on it by the Nuclear Regulatory Commission on appeal.

Tetra Tech is also a subcontractor on a $1.4 billion work arrangement with the Department of Energy to clean up pollution at Los Alamos in New Mexico—the historic home of the Manhattan Project that developed the atomic bomb (which was shipped in secret to Hunters Point, where it was loaded onto a ship for delivery to the Pacific). Critiques of that arrangement have fallen on deaf ears at the Department of Energy, which stated that Tetra Tech would remain involved.

Tetra Tech has yet to comment publicly on the findings. However, the company appears to be preparing for a leadership shift—and to compensate departing leaders.

According to SEC filings, in March, company shareholders approved a severance plan for Tetra Tech executives. For the next two years, executives “terminated by the company without ‘cause’” are eligible for “lump sum cash severance payments,” including salary, bonuses, and “full vesting of outstanding unvested stock options.”

Voting is beautiful, be beautiful ~ vote.©

Gilbert, Mnuchin, Duggan... Oh My!

Oh, what a tangled web we weave when it comes to stealin' the children, the land and the votes.

Dan Gilbert has a network.

How a Tax Break to Help the Poor Went to NBA Owner Dan Gilbert

After a lobbying effort, Dan Gilbert, billionaire founder of Quicken Loans, won special tax status for wealthy areas of downtown Detroit where he owns billions worth of property.

Billionaire Dan Gilbert has spent the last decade buying up buildings in downtown Detroit, amassing nearly 100 properties and so completely dominating the area, it’s known as Gilbertville. In the last few years, Gilbert, the 57-year-old founder of Quicken Loans and owner of the Cleveland Cavaliers, has also grown close to the Trump family.

Quicken gave $750,000 to Trump’s inaugural fund. Gilbert has built a relationship with Ivanka Trump, who appeared at one of his Detroit buildings in 2017 for a panel discussion with him. And, last year, he watched the midterm election returns at the White House with President Donald Trump himself, who has called Gilbert “a great friend.”

Gilbert’s cultivation of the Trump family appears to have paid off: Three swaths of downtown Detroit were selected as opportunity zones under the Trump tax law, extending a valuable tax break to Gilbert’s real estate empire.

Gilbert’s relationship with the White House helped him win his desired tax break, an email obtained by ProPublica suggests. In February 2018, as the selection process was underway, a top Michigan economic development official asked her colleague to call Quicken’s executive vice president for government affairs about opportunity zones.

“They worked with the White House on it and want to be sure we are coordinated,” wrote the official, Christine Roeder, in an email with the subject line “Quicken.”

The exact role of the White House is not clear. But less than two weeks after the email was written, the Trump administration revised its list of census tracts that were eligible for the tax break. New to the list? One of the downtown Detroit tracts dominated by Gilbert that had not previously been included. And the area made the cut even though it did not meet the poverty requirements of the program. The Gilbert opportunity zone is one of a handful around the country that were included despite not meeting the eligibility criteria, according to an analysis by ProPublica.

Several weeks later, the Michigan governor selected all three of the downtown Gilbert tracts for the program.

Gilbert influenced the local selection process, as well, other emails obtained by ProPublica show: Quicken’s top lobbyist was so enmeshed in the process, his name appears on an opportunity zone map made by the city economic development organization, recommending part of downtown be included in the tax break. No other non-city officials are named on the document.

The result has likely already been a boon to Gilbert: Multiple studies have found that property values in opportunity zones increased because of the tax break. Gilbert has put an estimated $3 billion into buying and renovating properties in Detroit, the vast majority now in opportunity zones.

In addition, even though the law was designed to incentivize new investment, Gilbert has several already-planned developments in the area that could benefit from the tax break, experts said.

The upside for an investor such as Gilbert “could be huge,” said Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy, a liberal-leaning think tank. “This seems to be a situation where someone is going to get tax breaks for something they were going to do anyway.”

The White House, Treasury Department and Quicken Loans all declined to answer repeated questions about Gilbert’s interactions with the Trump administration regarding opportunity zones. Roeder didn’t respond to requests for comment. A spokesperson for the Michigan Economic Development Corporation declined to elaborate on the email mentioning Quicken’s work with the White House.

In a statement, Jared Fleisher, Quicken Loans vice president of government affairs, acknowledged Gilbert’s companies gave input to the state but said they “did not exercise any inappropriate influence.” The companies “joined a wide range of stakeholders in providing feedback into the Opportunity Zone selection process,” he said. “The State of Michigan engaged interested parties, asked for their input, and encouraged participants to share the State of Michigan’s request for input with other potentially interested groups.”



A Bedrock Detroit map shows properties owned by Dan Gilbert in orange, part of an estimated $3 billion in real estate investments he’s made in the city. The lower left census tract was named an opportunity zone despite being too wealthy to qualify for the program. (Black lines added by ProPublica to roughly show tract boundaries.)

Opportunity zones were created by the 2017 Trump tax code overhaul. The idea, touted by members of both parties, is to grant lucrative tax breaks to encourage new investment in poor areas around the country. The Treasury Department determined which census tracts were eligible for the special status, based on poverty and income levels, and then each state’s governor picked 25% of them as zones.

But the program has been widely criticized as a giveaway to the rich that will not bring the promised revitalization in needy areas. There is no mechanism to track the program’s results, from how much new investment comes to the zones to how many jobs it creates.

Here’s how the tax break works. Say you’re a hedge fund manager, you purchased Google stock years ago and are sitting on $1 billion in gains. If you sell, you’d send the IRS about $240 million in taxes on the capital gain, less than you’d pay in ordinary income tax but still a lot. To avoid paying that much, you could sell the shares and put the $1 billion into an opportunity zone. That comes with three generous breaks. The first is that you defer that $240 million in tax, allowing you to invest more money up front. Plus, you can hold the investment for several years and you’ll get a significant reduction in those taxes. What’s more, any additional gains from the new investment are tax-free after 10 years.

The exact value of the tax breaks for any individual will likely never be publicly known because the program has no disclosure requirements. Gilbert’s holdings, managed by his firm, Bedrock Detroit, are private.

Experts say two of the downtown Detroit tracts are islands of wealth in the city, one of the poorest in the nation. They are significantly wealthier by median income than the surrounding area. They include Gilbert-owned office space with high-end tenants including Microsoft, JP Morgan and Quicken Loans. The boutique Shinola Hotel sits in another Gilbert property that is now in one of the opportunity zones.

While the tax break is supposed to generate new development, Gilbert already has several long-planned projects located in the newly designated zones, including the construction of a glass-and-steel skyscraper on the historic Hudson’s department store site.


Gilbert at the 2017 groundbreaking of a skyscraper planned for the former site of Hudson’s department store, now in an opportunity zone. He owns so much downtown Detroit real estate, some people call it Gilbertville. (Carlos Osorio/AP Photo)
“These areas are not distressed,” said Conrad Kickert, an urban design academic who wrote a book about downtown Detroit. He noted that Gilbert also helped create a new streetcar line in the area, named the QLine after Quicken Loans. The area is much wealthier and whiter than Detroit as a whole, according to recent census estimates.

This year, Gilbert’s opportunity zone push has continued; his firm has been lobbying the Treasury Department on the regulations for the program, which are still being hashed out two years after the law was signed. The CEO of Bedrock sent a letter to the agency pressing the administration to adopt lax technical rules for real estate projects of the type Gilbert is pursuing, according to a copy obtained by ProPublica.

“We believe that the purpose of the [opportunity zone] legislation is best achieved through large-scale, multipurpose real estate development projects that transform and revitalize entire neighborhoods and communities,” wrote Bill Emerson of Bedrock, appearing to describe the firm’s mixed-use Monroe Blocks project. Therefore, he argued, the department should loosen the rules around how quickly opportunity zone investments have to get under way.

Gilbert’s rise in Detroit started in 2010 when he moved the headquarters of his mortgage firm, Quicken Loans, from a suburb to struggling downtown Detroit. His companies employ more than 10,000, and his influence is so immense that Politico named him to its list of the most interesting mayors in America, the only non-mayor on the list.

Gilbert’s downtown developments have already received city and state subsidies with few strings attached, a recent Detroit Free Press investigation found. Along with myriad tax breaks, Detroit’s Downtown Development Authority, for example, sold an important lot to Gilbert for $1. (He has also been advised in his Detroit strategy by another Michigan native and prominent Trump supporter, the billionaire real estate developer Stephen Ross of Related Companies.)

As Gilbert was expanding his Detroit portfolio, Facebook billionaire Sean Parker was embracing the idea for what would become opportunity zones: give investors a tax break on their capital gains if they agree to invest the money in needy areas. Parker set up a think tank, the Economic Innovation Group, to promote the idea in Washington. In 2015, Gilbert joined the group’s “Founders Circle.”

He hasn’t spoken publicly about opportunity zones, but his real estate holdings and businesses in Detroit were clearly in areas that would be well positioned to benefit from the tax break that Parker wanted to create.

In June 2017, Gilbert met with Treasury Secretary Steve Mnuchin, the administration’s point man on the tax bill that included opportunity zones. Gilbert also had a phone call with Mnuchin, last November, according to public calendars. It’s not known what Gilbert and Mnuchin discussed. (Spokespeople for Quicken Loans and the Treasury Department declined to comment on the communications between Gilbert and Mnuchin.)

Despite his relationship with Trump and the administration, Gilbert has tried to publicly dissociate himself from the president. He is in a particularly sensitive position because Detroit is a majority African American city where Hillary Clinton beat Trump 95% to 3%. Before the event he held with Ivanka Trump in 2017, Gilbert released a statement disavowing electoral politics.

In December 2017, Trump signed the Tax Cuts and Jobs Act, which included the Economic Innovation Group’s opportunity zone idea. That prompted a scramble by state and local officials across the country to assemble nominations for the program.

By mid-February 2018, Gilbert’s lobbyists had joined the fray. They communicated with both Michigan and Detroit officials about opportunity zones, according to emails obtained by ProPublica through public records requests.

On Feb. 15, an official at the Michigan Economic Development Corporation instructed a colleague at another state agency to reach out to a lobbyist from Quicken to discuss opportunity zones.

The colleague, Brian Mills of the state housing authority, confirmed that he had a call with a representative at Quicken. The company was interested in how the state would select zones, Mills recalled. He advised the company that officials in cities like Detroit would have a lot of sway in the process.

A week later, a top economic development official in Detroit emailed maps of areas that the city wanted to nominate for the program to state officials. One of the maps reflected the input of Gilbert’s lobbyist, Jared Fleisher, who is named on the document.

Curiously, the city’s recommendations shown on the map included a downtown tract that the Treasury Department had deemed ineligible for the program because it was too wealthy. Its median family income was almost 1 1/2 times higher than the opportunity zone eligibility requirements allowed, according to census data. Gilbert owns more than 10 buildings in the tract.

Days after the city sent the map to state officials, it proved prophetic. The Treasury Department released a revised list of eligible tracts. The downtown tract was now, for the purposes of the law, a “low-income community.”

Asked why the name of a lobbyist for Quicken Loans appeared in the legend of the map, a spokesperson for the Detroit Economic Growth Corporation told ProPublica that “Jared Fleisher was just one of the experts we consulted on how the Treasury regulations worked.” She added the city “consulted with numerous experts” to assess which tracts would be eligible for the program, and that the city itself wanted the riverfront tract in the program.

It’s not clear why Gilbert’s lobbyist believed that the tract would end up being eligible for the program. Fleisher did not answer questions on the issue but said in a statement that Gilbert’s companies had not “engaged in advocacy activities (monetary or otherwise) regarding the eligibility of certain areas.” A Treasury Department spokesman said only that “the Treasury officials that typically work on opportunity zone issues had no knowledge of this matter.”

In a statement, Fleisher declined to comment on the nature of his interactions with the city, but he told ProPublica, “Ultimately, the City of Detroit — not [Gilbert’s] Rock Family of Companies or any other respondent to the open call for comments — made the recommendations to the state about which census tracts in Detroit should be selected.”

Two weeks after the Treasury Department issued its revision, the city recommended the tract for the program, along with several others in which Gilbert had substantial investments. They did so even though those tracts were not included in a list of recommendations for Detroit that the Michigan State Housing Development Authority had assembled and shared with the city.

In the end, the state deferred to the city, and in April 2018, the downtown tracts in which Gilbert had poured so much capital officially became opportunity zones.

One Trump Tax Cut Was Meant to Help the Poor. A Billionaire Ended Up Winning Big.
Opportunity zones are meant to spur new investment in poor areas. But Under Armour’s Kevin Plank is getting a tax break for investments that are not new and not in a poor tract. And Plank’s area was picked over neighborhoods that are actually poor.
An analysis by ProPublica found that one of the tracts only became eligible through a provision in the law that was intended to allow areas that had been designated for a Clinton-era anti-poverty measure to be included in the program. However, experts told ProPublica that the Treasury Department’s mapping analysis was deeply flawed, and that it erroneously allowed a handful of areas to become opportunity zones. As ProPublica previously reported, a similar loophole allowed a tract largely owned by Kevin Plank, billionaire CEO of Under Armour, to take advantage of the opportunity zone program for his development in Baltimore.

Community groups in Michigan have criticized the selection process, contending it favored wealthier areas that are already seeing redevelopment at the expense of more impoverished areas of Detroit. Of the 10 most impoverished areas in the city that the governor could have picked, only two made the cut. Of the 10 least impoverished areas, six were picked. Those include downtown tracts in which Gilbert has substantial investments.

Former Gov. Rick Snyder, who made the ultimate selections last year, declined to comment.

In an email, a spokesperson for the city of Detroit said its recommendations centered on areas where investors could make a return. “The City recommended the eligible areas where it believed developers were most likely to find profitable investments. To do anything else would have been pointless under the opportunity zone law.”

Voting is beautiful, be beautiful ~ vote.©

Detroit Sues Bedrock For Tax & Voter Fraud?

Detroit v. Bedrock

Just throwing it out there....in the spirit of fuchsia.

City of Detroit sues Bedrock for info on any tax-evading tenants

The City of Detroit is taking its campaign against tax evaders another big step forward by reportedly suing businessman Dan Gilbert's Bedrock real estate arm for tenant information.

If Bedrock real estate is allowing its residents to rent using residency outside the City of Detroit to assist in avoiding income tax, well, could not this fraud scheme also be applied to absentee voting?

The city has contended for years that many residents who live in the city evade the city's residential income tax by claiming residence in the suburbs.

People have been using residency outside of Detroit for years, due to all that redlining in auto insurance.  It is substantially cheaper to insure a vehicle north of Eight Mile.

The city has now sued Bedrock to get tenant information on several of its properties. The city alleges that Bedrock has withheld the information for the past year despite city requests, Michigan Radio said in the first report of the lawsuit.

NOTE TO SELF: Get copy of the complaint.  The city may have sued the wrong Corporate Shape Shifter considering the fact that there are 119 corporate entities with the name "Bedrock".

Gilbert issued a statement citing issues of privacy of tenants as a reason for not providing the information the city wants.

Well, he does have a point.

"The City of Detroit has asked our commercial real estate company, Bedrock, to provide it with the confidential personal information of all of our residential tenants, including their Social Security numbers and employers," he said in the statement.

Technically, considering it is public information that can be easily obtained from the elections data, is it not possible to cross check?  I mean, does not NPG VAN have this information, just in case the data from the City Election Clerk's Office was corrupt.

"We do not believe we have the legal right or contractual permission to release the highly sensitive personal information of all our tenants to any third party, including any governmental entity, without the tenant's consent to do so, or a constitutionally valid final court order. … We value the strong relationship our organization shares with Mayor [Mike] Duggan and our city government partners. We have a dispute over this issue, and in this situation the privacy rights of our tenants must take priority."

Perhaps, the City sued a "working group" that was not in existence during the time of the actions or inactions.  Sounds like a Mueller Ham Sandwich to me.

Last time I checked it was okay for the City of Hamtramck to release personal income tax information to the public and nothing was done about it outside the courts.

Hamtramck Whistleblower Settlement Produces Possible Public Corruption

The city's efforts come about a year after officials first told the Free Press the city was cracking down on tax evaders living or working at 33 properties in the downtown and Midtown areas including New Cadillac Square Apartments and Broderick Tower, two properties sued last year by the city.

New Cadillac Square Apartments

I wonder who was named in the lawsuits because there are lots of different registered "owners" of those properties, just saying, you know.

Broderick Tower

In those earlier lawsuits, the city said it believed "many residents" living in the city were using the suburban address of a relative or friend "for purposes of obtaining lower auto insurance rates and/or the purpose of avoiding city income tax liability," the Free Press reported in April.

Everyone does it.

Claiming a suburban address can help avoid the city's expensive auto insurance rates. Detroit has some of the highest insurance rates in the country.

Detroit's income tax rate for residents is 2.4%. Nonresidents who work in the city are required to pay a rate of 1.2%. Businesses pay a 2% rate. In total, 23 cities across the state have an income tax.

City Treasurer Christa McLellan recently told the Free Press that the scope of the crackdown on tax evaders, which began in 2015, has since widened to include more than 50 properties across downtown and Midtown.

Is it just me or does anyone see federal income tax violations here?  I believe this is a job for #Superfans...who are probably already on it, but hey, what do I know?

"The city is pursuing passage of a regulation to require landlords to annually report tenant rolls to the city's tax compliance branch and we continue to review tenant information to identify non-filers in the apartments and lofts in the city," McLellan told the Free Press in April. "In addition, the city continues robust collection activities across all industries in an effort to enhance tax compliance.

This would be a good initiative to stop human trafficking.

Legal action is used only when voluntary compliance fails."

Voting is beautiful, be beautiful ~ vote.©

Detroit allows billionaire Gilbert to skirt affordable housing mandate for new tower

Corporate welfare, it is just not for "The Poors" (always said with clinched teeth).

Rendering of Dan Gilbert’s project to build Michigan’s largest tower in downtown Detroit.

Billionaire Dan Gilbert, who is set to receive tens of millions of dollars in tax incentives so he can build Michigan’s tallest building at the Hudson’s site in downtown Detroit, has refused to designate 20% of the 250 housing units as “affordable” as required by new city mandates.

But lucky for him, Mayor Duggan and City Council bailed out yet another billionaire this week by allowing Gilbert’s real estate company, Bedrock, to provide just five affordable housing units inside the 52-story tower.

To make up for the loss, Gilbert is now allowed to pick and choose where he’ll provide the “affordable” units across about five of his planned housing projects, as long as the total in his portfolio is at least 20%.

But the new rules for Gilbert mean he can concentrate “affordable” housing in a few of his less ambitious projects, one of which is not even in downtown and another that involves micro-apartments that average just 260 square feet. Bedrock, for example, plans to provide 85 “affordable” micro-apartments out of 218 units at 28 Grand, a 13-story development in Capitol Park. Another plan calls for designating 60 of 300 units as “affordable” housing in Brush Park.

Councilwoman Mary Sheffield, who originally proposed the affordability ordinance, was the only board member to reject the special arrangement, questioning Bedrock’s insistence that it can’t afford to offer 20% of its units to people who make below the average income in metro Detroit.

“In every single meeting, it’s been ‘The finances don’t work,'” Sheffield said Tuesday. “I question what can and can’t be done.”

The plan was approved just several days after Bedrock drew fierce criticism for an ad banner that depicted a virtually all-white crowd in downtown next to the words, “See Detroit like we do.”

Gilbert isn’t the only billionaire to receive special treatment from the city of Detroit. The Ilitch family, which was given an unprecedented $285 million in captured taxes to build a new hockey arena and adjacent developments, also was given a pass by Duggan’s administration to pick and choose which of the developments offer “affordable” housing.

The affordability mandate applies to developers who receive tax incentives and is intended to create more diversity in and near downtown, where gentrification is displacing long-time residents.

Steve Ogden, Bedrock’s director of real estate development, told City Council that the company can’t afford to build a new skyscraper if it’s required to provide 20% of the units to lower-income residents.

“High rises are very expensive to build,” Ogden told the council.

James Arthur Jemison, the mayor’s chief of Housing and Revitalization, agreed.

“The economics of doing steel construction high rise is very expensive,” Jemison said. “It was my perception that in one of those buildings it would be extremely financially painful for them to have affordable housing.”

As it turns out, so-called “affordable” housing isn’t very affordable to many Detroiters because of what Metro Times described as a “quirky metric that inflates how much money Detroit residents live on.”

The Metro Times wrote: “The Census Bureau groups the city with its more affluent neighbors, Warren and Livonia, to determine area median income, and, as a result, AMI in a city where 40 percent of people live in poverty was listed as $53,628 in 2015. That means if developers are providing units to people who live at 80 percent of that, they’re serving households living on almost $43,000 per year.”

Duggan and City Council have gone out of their way over the past three years to help billionaires in the downtown area as poverty increases in the neighborhoods. Earlier this year, the mayor and council approved several tax incentives, including $34.5 million in cash, to billionaire Tom Gores to move the Pistons to the publicly financed Red Wings arena. By the time the money and interest are paid off, the payout will cost taxpayers more than $70 million.

Motor City Muckraker is an independent watchdog funded by donations. To help us cover more stories like this, please consider a small contribution.

Voting is beautiful, be beautiful ~ vote.©