Detroit City Council tracking unpaid loans - FOX 29 News Philadelphia | WTXF-TV

Detroit City Council tracking unpaid loans

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On Thursday, Fox 2's Charlie LeDuff attended a Detroit City Council meeting.  On the meeting agenda, some questions about a developer with connections to city hall who received a letter that told him he was allowed to take his time paying back a $19-million dollar loan.

Detroit City Council member Ken Cockrel wants to know why a loan issued by the city of Detroit and backed by the U. S. Department of Housing and Urban Development (HUD) has a flexible timetable to be paid back. 

At the meeting, Cockrel asks Detroit City Attorney John Nader if, in his experience, it was standard operating procedure for a forbearance letter such as this to be issued.

Nader responds: "Well there's generally more of a full blown forbearance agreement done. And generally they say in exchange for forbearing they'll be consideration on the part of whoever wants the forbearance, in this case the developer, so if they are done, they're done differently."

Cockrel tells LeDuff after the meeting:  "This definitely was not a case of standard operating procedure."

As reported on Fox 2 in the past, this is not just one group of developers it is a slew of them, owing tens of millions of dollars to Detroit.

Robert Anderson of the Detroit Planning and Development said this to the City Council:  "The culture of the community is that, the prevailing thought was that these Section 108 Loans, aw shucks, we wrote them us a loan but they're really just a grant, its Federal funds so don't worry about it.  My contention is that's five to seven million dollars that is not available to help the man on the street or the folks in the neighborhood, so that's why we are pursuing this and I look forward to a more detailed discussion."

The next Detroit City Council meeting on the subject of unpaid loans will take place in June and Fox 2 will be there to report on the details.

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