A Surprising Bid for a Blighted Slice of Detroit

When Wayne County tax collectors put a package of 6,365 Detroit foreclosed houses and lots up for auction in mid-October, they didn’t expect to attract any buyers. That’s because the collection is a so-called blight bundle: About 2,000 of the parcels are vacant lots, and 3,000 are homes in such bad shape that the county is requiring any buyer to tear them down at an estimated cost of at least $24 million. Only about a thousand of the homes have any value. “I can’t imagine that you’re going to make money on this,” says David Szymanski, Wayne County’s chief deputy treasurer.

So Szymanski was more than a little surprised when, soon after the auction opened, a mystery bidder offered about the minimum of $3.2 million to buy—and take responsibility for—the properties. That turned out to be the only offer, and on Oct. 28 the county announced that Herb Strather, a local casino and real estate developer, won the auction. “Of course we’re going to make a profit,” he says. In 2006, Strather led an investment group that bought Detroit’s Hotel St. Regis. After failing to pay taxes and defaulting on a loan, the group lost the property in 2009.