The Dirt: A new horseback riding center is coming to Detroit

Scams and schemes are everywhere this week. We’ve got news about a voucher scam targeting some of Detroit’s poorest residents and even more details about the missing $40 million at the Detroit RiverFront Conservancy.

And in other news, a nonprofit that promotes horseback riding for kids is expected to start construction on an equestrian center later this year.

Voucher scam warning

The state’s housing agency and attorney general are warning people about a scam involving housing vouchers . The Michigan State Housing Development Authority said a group has been using the authority’s logo on flyers and ads in order to collect personal information from people who apply for Section 8 vouchers. Legitimate vouchers subsidize a portion of a household’s rent. They’re intended for low-income individuals or families and are highly coveted. No housing authorities in the state currently have an open waitlist.

Those who may have been the victim of a scam are encouraged to file a police report and file a complaint with the Michigan Department of Attorney General Consumer Protection Team by filling an online complaint form , sending a form by mail or by calling 877-765-8388 . (Detroit Free Press, State of Michigan)

How did he get away with it?

We now have some answers into how the former Chief Financial Officer William Smith at the Detroit RiverFront Conservancy accused of stealing $40 million from the organization managed to get away with it for more than a decade.

The nonprofit didn’t have essential guardrails and oversight controls, and Smith was able to set up systems that he could manipulate without much oversight. Smith had sole access to the conservancy’s checking account, for example, a move that did not meet basic industry standards. It also had a huge board with 44 members, which a charitable giving expert described as “just ridiculous” and may have made it hard for any one person to take action.

The board is chaired by Matt Cullen, who helped form the RiverFront Conservancy . Cullen also chairs the nonprofit Invest Detroit’s board, which approved a $3 million loan to Smith for a cigar bar near the conservancy’s Detroit RiverWalk.

Sources within the conservancy said it will now need to raise as much as $41 million (paywalled) to cover its long-term financial needs, including finishing the Ralph C. Wilson Jr. Centennial Park where construction is running over-budget.

As to what he did with that money? Smith bought at least 10 of his properties (paywalled), mostly in northwest Detroit, through the Wayne County tax foreclosure auction. He began selling and transferring his real estate assets (paywalled) to other entities he owned and some attached to his wife and father in the weeks leading up to a federal investigation. One expert said prosecutors might charge Smith with obstruction of justice due to these transfers (Freep, Detroit News, Crain’s Detroit Business)

Estate help

The city and The Gilbert Family Foundation are providing almost $2.2 million toward estate planning to help Detroit homeowners pass on properties to their heirs. A recent report from Detroit Future City found that at least 5,500 properties in the city worth more than $268 million have unclear ownership . These “tangled titles” prevent people from accessing funding for home repairs and tax relief, and can be an obstacle to transferring homes to the next generation when the owner dies. Those interested in learning more can sign up for one of three workshops this summer .

​​The Villages CDC on the eastside started a similar program , offering case management and $2,500 per household to help owners go through a quiet title or probate action to legally clarify the ownership status. (BridgeDetroit, Detroit Future City, Detroit Housing Network, Model D)

Development news quick-hitters

Detroit Horse Power is expected to break ground (paywalled) on an $11.4 million youth-focused equestrian center this fall following its purchase of 14 acres from the Detroit Public Schools Community District. The nonprofit teaches kids life skills through horseback riding and hopes to be able to serve more than 2,000 students each year at the new center. (Crain’s, 7 News Detroit)

Los Angeles investor Sam Nazarian announced he’s partnering with Wyndham Hotels & Resorts to redevelop the former Park Avenue House downtown into a 174-room hotel. He did not provide a cost or timeline. (DBusiness)
A new 78-unit apartment building near Michigan Central Station called The Brooke opened last week . Twenty percent of the units are reserved for households making 80% of the area median income. The $23 million development also has 2,500 square feet of available ground-floor retail. (Freep)

The Dirt: A new horseback riding center is coming to Detroit · Outlier Media