Tenants at the historic Leland House in downtown Detroit are asking a federal bankruptcy judge to intervene as the troubled 20-story building heads toward a potential auction in early March.
Housing advocates filed emergency motions in U.S. Bankruptcy Court on Tuesday in hopes of preserving their leases and preventing their belongings from being removed without their consent.
The filings, submitted by the Leland House Tenants Union, a branch of the Detroit Tenants Union, come as the building’s owner seeks court approval to auction off the 20-story property and an adjacent parking lot through an online sale beginning on March 9, pending approval by U.S. Bankruptcy Judge Maria Oxholm.
Tenant advocates say the auction timeline, along with a Jan. 13 court order authorizing the removal of residents’ possessions, created an urgent need to act.
“We realized very quickly that if nothing was done, tenants were going to miss the window to be heard,” Donovan McCarty, director of the Housing Justice Clinic at Michigan State University’s College of Law, which is representing residents alongside private attorneys, Thornbladh Legal Group PLLC and Goodman Hurwitz & James, P.C. tells Metro Times.
McCarty says tenants fear they are being pushed out permanently under the guise of emergency cleanup.
Residents were forced to evacuate the Leland House, at 400 Bagley St., in December after an electrical failure knocked out power, heat, and elevators. Many left believing the displacement would be temporary and that they would retain access to their apartments. Instead, tenants say they were locked out, with personal belongings left behind inside the building.
The city’s fire marshal made the decision to block access to residents, and so far Mayor Mary Sheffield, who took office on Jan. 1, is not taking a different approach than her predecessor Mike Duggan, who has received tens of thousands of dollars in political donations from DTE Energy executives. Residents and advocates worry DTE is trying to gobble up the property on a block where the utility already owns most of the land and buildings.
In one filing, tenants object to any sale of the property that would wipe out existing leases, arguing that residents still hold valid, unexpired rental agreements that must transfer to a new owner. In a second motion, they ask the court to reconsider its Jan. 13 order allowing tenant belongings to be removed, saying residents were never notified or given an opportunity to be heard.
The consent order allows up to $70,000 in bankruptcy funds to be used to hire movers to remove tenants’ possessions without the residents present. McCarty says that approach raises serious concerns about privacy, due process, and the potential loss of irreplaceable items.
“Under the current order, the idea is that a moving company would go in and move their stuff out, but that is an invasion of privacy,” McCarty says. “That’s a big concern.”
Tenants are asking the court to pause enforcement of the order, allow residents back into their units under supervised conditions to retrieve belongings themselves, and block any sale that does not protect their right to return if the building is made safe again.
Tenants and advocacy groups were hoping that Sheffield, who ran on a progressive platform that included prioritizing housing rights, would side with residents, but that does not appear to be the case. Instead, the administration is emphasizing safety concerns and ongoing relocation assistance.
“The Mayor understands that this has been a terrible and unfortunate situation for the tenants whose lives have been greatly disrupted and inconvenienced due to failure of the Leland to perform maintenance and repairs,” Deputy Mayor Brian White said in a statement to Metro Times. “Ultimately, this is a matter of resident safety as the building has been deemed unsafe to enter by the Fire Marshall, aside from building ownership, property management and their contractors, all of which are covered by liability insurance. There is currently no electricity, heat or working elevators in the Leland.”
The filings come as the Leland House ownership seeks approval to auction the property, with a Delaware-based entity serving as a $3.5 million stalking-horse bidder, which sets a floor price for an asset being sold through bankruptcy. If approved, the online auction would be conducted by Ten-X and brokered by Savills, with the sale expected to close in early April.
Housing advocates say they worry the quick push for an auction is designed to clear the building of residents and belongings so a future developer can start from scratch, rather than addressing long-standing issues tied to long-ignored maintenance and unpaid utilities.
In a statement, Julie Schneider, director of the Detroit Housing & Revitalization Department (HRD), said the city continues to provide hotel accommodations and wraparound services, including transportation, employment support, and housing navigation to the Leland’s displaced residents.
“The Mayor has been supportive of the wraparound services being provided residents by HRD, including transportation to jobs, employment support, resources for clothing, food, and other immediate necessities,” Schneider said. “HRD has supported 30 households in total, 27 households using hotel accommodations and three households staying with friends and family members. Nine households, with the assistance of the City’s housing navigation service as well as first month rent and security deposit support, have already relocated to new, permanent housing. As additional households receive housing approvals, HRD will support move-in costs for eligible households.”
Tenants, however, say relocation is not a substitute for due process or for their right to return home if conditions improve. McCarty says residents and advocates are also urging the city to rethink its approach to distressed housing, including whether long-term tenants should have a pathway to ownership or cooperative control rather than displacement.