Lansing officials react to receivership order at Sycamore Townhomes

LANSING, Mich. (WLNS) – Elected and appointed officials in the city of Lansing are reacting to the “rare, really rare” decision by a federal court judge to appoint a receiver to bring Sycamore Townhomes into compliance with Lansing housing codes.

As 6 News reported Tuesday, a federal district court judge ordered the appointment of a receiver for the troubled Sycamore Townhomes in southwest Lansing after the city has spent years using administrative and court enforcement tools to try to bring the unsafe property back into compliance.

A receiver appointment means that a person takes over the day-to-day operations, makes sure the bills are paid and necessary work is done to keep a property or business safe for the public.

“It’s an extreme avenue for us to go and it’s almost a last resort,” Rawley Von Fossen, director of the Department of Planning and Development in Lansing, tells 6 News about asking a court to appoint a receiver. “We’ve got a variety of tools in our toolkit and this one we reserve a right to, but it’s in extreme circumstances where – through multi-year efforts and efforts at the local court level where owners failed to meet the bare minimum requirements that we require properties to be.”

After an evidentiary hearing last month, Federal District Court Judge Jane Beckering issued an order appointing a receiver on Sept. 18.

“Based on the record before the court, including the documentary evidence and testimony presented at the evidentiary hearing, the Court finds that the conditions at Sycamore have been, are currently, and absent judicial intervention will continue to be incompatible with human health and safety,” Beckering wrote in her 16-page decision and order.

The city and the property owners have been in a protracted legal battle for years over the decaying property. In April and June 2022, the city conducted inspections on the property and found “hundreds” of code violations, Beckering wrote in her opinion. Those records, the judge wrote, included issues with furnaces, fire-damaged units and infestations with “vermin.”

In an attempt to force the property owners to bring the townhomes into compliance, the city sued the owners to gain compliance under the housing ordinance in September of 2023. The case was filed in 54-A District Court, and despite the ongoing litigation and court orders, the company failed to bring the properties up to code, resulting in tens of thousands of dollars in fines from the court.

Earlier this year, city officials learned the company owed over $83,000 to the Lansing Board of Water and Light and was on the edge of having all the electric and water service to the complex shut off.

In late May 2024, the city sued the complex’s owners in Eaton County Circuit Court seeking a receivership. The company sought and received permission to have the case considered in federal court because the company is located in New Jersey.

Von Fossen says the complex has 67 buildings with 339 individual units. He tells 6 News about half have been deemed unsafe for habitation, or red-tagged, while the remainder of the units are pink-tagged meaning the units are not certified rentals.

“First and foremost, I’m concerned about the folks who are living there and calling that place home tonight,” Von Fossen said. “For them to be able to ensure that they’re living in a safe, quality housing unit is imperative.”

Mayor Andy Schor says with the appointment of the receiver, he is expecting improvements to the properties to move swiftly.

“As soon as it can be fixed, we expect it will be fixed and the different pieces will be fixed, as opposed to, you know, the previous owners who didn’t do anything,” Schor tells 6 News “So, I expect it will be as quick as possible.”

Von Fossen says he and code compliance officials expect to meet with the receiver in the coming week to discuss the need to bring the property into compliance as a safe, quality rental location.

The complex, which Von Fossen says is one of the five largest multi-family complexes in the city, is located in the Third Ward. The Ward is represented on City Council by Adam Hussain, who first raised alarms about the complex with 6 News this spring.

He reacted positively to the news in a written statement to 6 News.

“The residents of Southwest Lansing are thrilled that Western District Court Judge Jane Beckering placed Sycamore Townhomes under a receiver. The folks that live there are our friends, neighbors, and in some cases, family members,” he wrote in an email to 6 News. “They deserve to live in housing that provides for optimal health and safety and for far too long, Sycamore Townhomes have been in deplorable condition. The owner should be ashamed. It is our hope that the receiver is able to facilitate the necessary work to bring this property up to code. It is also our hope that our local court continues to hold the owner responsible for the condition of the property and find them in criminal contempt for not complying with past orders. It’s time to send a message to folks like this that we don’t allow for predatory and unlawful behavior in Lansing.”

Schor says his administration is committed to bringing the city’s rental properties up to code.

“If there’s anybody out there who thinks that the city is not going to use every tool in the toolbox, they’re wrong,” he says. “And we just proved them wrong.”

For the latest news, weather, sports, and streaming video, head to WLNS 6 News.