The City of Detroit will file 597 lawsuits against banks and business for more than $12.2 million in unpaid property taxes owed from 2010 to 2012. According to the office of Mayor Mike Duggan, the lawsuits will be directed against businesses that profit through the use of city property, rather than homeowners or anyone who owns three properties or less, or properties linked to a limited liability corporation or company.
According to a statement from the mayor’s office, “For too long, there are those who chose not to pay what they owed in taxes, leaving everyone else to pay the price,” said city treasurer and deputy chief financial officer David Szymanski today. “We are working to improve city services for our residents, and to do that – whether its better police and fire protection, streetlights or better schools for our children – we need everyone who does business in this city to pay their fair share.”
City authorities would not identify the companies and banks to be targeted, which have two weeks to respond to demand letters. Unresolved tax cases will see court time by September 1.
“The amount (owed) is certainly not a surprise,” Szymanski said. “The evaluation of the viability of such a lawsuit is what caused pause in the past. We’re confident that we’ll be successful in relation to collection of these taxes in most of the cases.”
The city plans to dun property owners for taxes unpaid in other years, too. Thus, owners whose properties were sold at auction may still be taken to court, according to Michigan law.
“We are not talking about the family that has fallen on tough times, those struggling to decide whether to feed their children or pay their taxes,” Szymanski said. “We went to great lengths to ensure that we were going after only those who bought property as investments, not as a place to live."
Detroit will send demands to property owners this week as a reminder to pay delinquent property taxes. The Motor City wants to recoup about $19,942 per lawsuit and $7,898 per parcel, covering 1,543 parcels.
Detroit was hit by the biggest municipal bankruptcy in American history back in 2014. It has only managed to pay back $7 billion of its $18 billion of debt and obligations. Mayor Duggan has proposed a $2.6 billion fiscal 2017 budget in the hope that Detroit will be released from oversight by the State of Michigan by January 2018.
The Detroit Free Press reported that Duggan’s spokesman, Dan Austin, said of the money owed to the city: "$12.2 million can pay for a lot of cops and firefighters. It's not an insignificant amount of money."
"We're not going after families, this is going after real estate speculators, banks, and companies that have acquired several parcels of land and have not paid taxes on it," said Austin. "We are giving them the opportunity to pay their debt." Officials have worked for months to ascertain whether or not the parcels in question were owned strictly for profit and business, rather than as residences.
"We are trying to make it harder for profit-seekers to sit and speculate on property without keeping it up or paying taxes like everyone else," Szymanski said. "The message here should be clear: If you're going to do business in Detroit, you have to pay your share, just like everybody else."