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Detroit sitting on $21M from insurance companies to demolish blighted houses

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  • RECAP: Mayor Duggan delivers Detroit's State of the City address

    RECAP: Mayor Duggan delivers Detroit's State of the City address

    Thursday, February 27 2014 12:35 AM EST2014-02-27 05:35:40 GMT
    The first State of the City address for Detroit since the city declared and was allowed into bankruptcy was delivered by Mayor Mike Duggan Wednesday night in the Erma Henderson Auditorium in City Hall.
    The first State of the City address for Detroit since the city declared and was allowed into bankruptcy was delivered by Mayor Mike Duggan Wednesday night in the Erma Henderson Auditorium in City Hall.
DETROIT (WJBK) -

Mayor Duggan talked about a $20 million initiative to help fight blight in the city during his State of the City address Wednesday night.  The money is coming from the city's fire insurance escrow fund.

Turns out, FOX 2 investigative reporter M.L. Elrick discovered that money has been available for years - so why hasn't it been tapped into until now?

VIDEO: Click on the video player above to watch M.L.'s report
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Remember this wreck of a house? When we first showed it to you last year hit been sitting on the edge of a tidy west side neighborhood looking like a cold sore on a beauty queen. Well, here's what it looks like today. Notice anything different?

The city of Detroit demolished the house after we reported hit been left to rot, even though an insurance company had given the city money to knock it down. That story put me onto a bigger story - one I've been working on for months.

My investigation found the city collected $21 million from insurance companies to knock down houses, but plenty of those houses are still standing.

For example, between 2008 - 2013 the city was paid more than $25,000 to knock down four homes on Evergreen Road. None of those homes have been knocked down.

VIDEO: Click the video in the video player above 'A visit to a neighborhood plagued by abandoned homes'

Now Mayor Mike Duggan is making this issue a centerpiece of his first State of the City address.

"When he did learn that there was money that could have been spent to demolish burned out houses, of course he jumped on it," says mayoral spokesperson Alexis Wiley.

The Duggan administration is giving credit where credit is due.

"M.L., your work has really brought this problem to the forefront. This money was just sitting and it needs to be used. You made it clear there's this money that could be used for demolition, could be used to really reinvest in our neighborhoods it and wasn't being used," says Wiley.

If the mayor carries through on his plan, east-sider Brandon Yates will be plenty happy. He's lived across the street from abandoned houses that the city was paid to knock down. He told me last month, that he always suspected it didn't have to be this way.

"Yeah, it's unfortunate. There's a lot of stuff in the city that's not being dealt with. I think the money is there, the resources are there, it's just putting the two together," says Yates.

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