The Dirt: Metro Detroit has one of most inflated housing markets in U.S., report says

Federal prosecutors revealed their case against William Smith of the Detroit RiverFront Conservancy , and the details are shocking. The nonprofit’s former chief financial officer allegedly conducted a scheme for more than a decade, forging documents, creating fake bank statements and blowing tens of millions on everything from jewelry to real estate. We’re still waiting to find out how no one seems to have noticed until now.

Elsewhere, Detroit may see $1 billion in transit funding from the state, and home prices in metro Detroit may be inflated — by a lot.

New details in RiverFront Conservancy scandal

The U.S. Attorney’s Office began a criminal case in federal court against William Smith last week, bringing out new details about his “years-long scheme” to embezzle nearly $40 million from his employer, the Detroit RiverFront Conservancy. The former chief financial officer is charged with bank fraud and wire fraud.

The complaint alleges he falsified bank statements, forged a signature to obtain a $5 million line of credit from Citizens Bank and transferred funds from the nonprofit’s accounts to both of his own accounts. Smith used the money on “on airline tickets, hotels, limousines, household goods, lawn care, clothing, and jewelry.”

Prosecutors said in the filing Smith invested in a number of businesses. Court records show the scheme began to unravel after those investments started to lose money . Details about some of Smith’s alleged holdings came out in another case against his business partner John Draper II — who spent 25 months in prison for wire fraud starting in 2021 — with whom the filing says he bought some local franchise restaurants. In total, Smith claimed during a 2019 deposition for that case that he owns around 15 properties, including a bar in Southfield, a vacant warehouse and a property near the riverfront for an unrealized cigar bar . (7 News Detroit, Detroit Free Press, Axios Detroit)

Billions for transit

Legislation introduced in the Michigan House last week pushing for new economic spending priorities would provide $2 billion to transit projects over the next 10 years. Around $1 billion of that funding could come to metro Detroit to support things like bus rapid transit along Woodward Avenue and commuter rail between Detroit and Ann Arbor.

At least one Democrat opposes the bill because the same legislation also includes subsidies for large corporations through the state’s Strategic Outreach and Attraction Reserve Fund. The fund has come under scrutiny for lack of oversight and creating few high-paying jobs. Overall, transit advocates support the legislation. (Outlier Media, Planet Detroit)

Inflation hits housing

A new report found that metro Detroit has some of the most inflated housing prices (paywalled) of any region in the country. As of April 30, the average price for a home in metro Detroit was $252,395. The report’s authors estimated homes were actually worth about $179,282, based on historical averages. That means buyers in the region are paying around a 41% premium, just below the Atlanta metro, which has the highest in the country.

Local real estate agents largely agreed that home prices in metro Detroit are inflated, noting that their clients regularly pay more than what homes appraise for, largely due to low inventory. Neither the authors nor the real estate agents expected a major correction any time soon. (Crain’s Detroit Business, Florida Atlantic University)

Development news quick-hitters

Ford Motor Co. already redid Roosevelt Park in front of the recently reopened Michigan Central Station. It’s also adding an 8-acre park on the station’s former rail yard south of the building that will connect to the Southwest Greenway and leave open the possibility for passenger rail in the future. It’s expected to open next year (paywalled). (DBusiness, Crain’s)

Bedrock bought the Millender Center from General Motors last week, adding yet another downtown building to its portfolio. The companies did not disclose a sale price. Current tenants will be able to stay in the building. (Detroit News)

The $49 million AC Hotel is on track to open (paywalled) by the end of the year, developers say. The new hotel, which connects to the historic Bonstelle Theater, will have a rooftop bar. (Crain’s)

The Dirt: Metro Detroit has one of most inflated housing markets in U.S., report says · Outlier Media