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Published: 12/28/2008

Upscale Sylvania Township area copes with blight more typical of inner city

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER
The house at 7510 Wind River Dr., abandoned and unrepairable after a fire in late 2006, was once valued at $400,000. The house at 7510 Wind River Dr., abandoned and unrepairable after a fire in late 2006, was once valued at $400,000.
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IN TODAY'S troubled housing market, the story is all too familiar.

A tenant is evicted.

The now-vacant dwelling catches fire.

The once stately property goes unrepaired and gradually deteriorates to the point that a date with a bulldozer is inevitable.

The only difference in this case is that the house isn't in Toledo's aged inner core but at 7510 Wind River Dr. in Sylvania Township, an upscale suburb.

"Obviously, neighbors weren't pleased to have a burned house," commented a resident of the surrounding Parklands Sylvan Hills subdivision, off King Road between Sylvania Avenue and Brint Road.

Township authorities expect to demolish the dwelling in coming weeks, more than two years after beginning efforts to try to prod the owners to make repairs to the house once valued at $400,000.

The case was complicated by a finding that the blaze was intentionally set and by an insurance company's refusal to pay for repairs.

The situation helps to illustrate the plague of vacant properties spreading across not only U.S. urban areas but suburbs as well.

It also highlights the circumstances that take some vacant houses to the point of no return.

Given the national housing value slump, it is not clear whether the condition of the Wind River Drive house has diminished nearby property values.

Figures from the U.S. Census Bureau show that 2.2 million vacant houses were for sale nationwide this past summer, up 100,000 from a year earlier. Vacant dwellings accounted for 2.8 percent of the nation's nonrental housing stock in the third quarter, up from 2.7 percent at the same time in 2007.

In Sylvania Township, neighbors are happy that the long fight to clean up the Wind River Drive property seems to be nearing an end.

"People have communicated with the board about this house," said Pamela Hanley, chairman of the township board.

Neighbors have attended board meetings and have spoken out about the situation.

In a report July 24, just minutes before township trustees condemned the property and ordered its demolition, administrator Hugh Thomas passed out photos showing the house's condition.

Mayer Morganroth, a lawyer in Southfield, Mich., who represents the owners, didn't return a call from The Blade seeking comment.

The four-bedroom dwelling, which was two years old at the time of the fire, sits on a high-profile lot next to busy King Road.

It is about a quarter-mile north of the township police department and is surrounded by houses with values approaching $1 million.

The blaze was reported about 9:30 in the evening of Nov. 2, 2006, by a township police officer patrolling the neighborhood. Just three days before, the Detroit-area owners had evicted the tenant.

By the time the fire was extinguished, the house was extensively damaged, including collapse of the roof over the great room and master bedroom, said John Walters, chief building official for Lucas County.

After the fire, investigators brought in a dog trained to detect fire-starting accelerants, said Tom Eisel, deputy fire chief in the township. No accelerants were found.

But other evidence, which he declined to discuss, led officials to conclude the blaze was intentionally set. No one was charged, however.

Lucas County building officials were called in to estimate the damage. "We ordered that the roof be covered and repaired," Mr. Walters said. Instead, the owners installed a blue tarp that was soon carried away by the wind.

"The place filled with water and ice," causing further damage, the county building official said.

A Toledo firm started to replace the roof in April, 2008, then abandoned the work about a week later, Mr. Walters said. The firm has since filed a lien against the house for $15,000.

"If somebody would have done something quickly after the fire, the house could have been repaired," the township administrator said. "It just went downhill."

The house was purchased for $399,000 in February, 2005, by Marshall S. Stillman, a 69-year-old real estate investor in the Detroit area. Six months later, he transferred it by quit-claim deed into the name of FNG Holdings LLC.

The house was insured by Fidelity National Insurance Co., Jacksonville, Fla.

Mr. Stillman filed a claim for $430,000 - the policy limit - with the insurer on Dec. 8, 2006, according to papers filed in a lawsuit in U.S. District Court in Toledo.

Four months later, the insurer notified him the claim was denied. Mr. Stillman and FNG filed suit two months ago, accusing Fidelity of breach of contract.

In a response, the insurer defended its actions, saying the fire "was intentionally set or procured to be set by the plaintiffs and/or by persons in privity with them and/or with their knowledge and consent for the purpose of obtaining insurance benefits."

As the first anniversary of the fire passed, township and county officials were beginning to conclude that the house was becoming unsalvagable and a hazard to the community.

But the effort to force demolition was complicated by the presence of a lien placed on the property for an undisclosed sum by the U.S. attorney's office in Detroit.

The lien was released in April, 2008, records show.

Another problem: the failure of the original mortgage holder.

Deutsche Bank National Trust Co. assumed the mortgage in November and quickly filed a foreclosure complaint in Lucas County Common Pleas Court. The case is pending.

At one point this summer, owners filed applications for permits to renovate the property. But county officials said the application was incomplete and the property had deteriorated too far.

FNG Holdings, which now lists an address in Warren, Mich., filed suit against the township Aug. 22 seeking to overturn the trustees' demolition order. Judge Linda Jennings backed the trustees' order Nov. 18.

They plan to select a demolition contractor as early as this week.

"This was not a typical house," township Trustee Dee Dee Liedel said.

"We had an insurance company that suspected there was arson and refused to pay out. We had a mortgage company that was in bankruptcy and no one from that side was pursuing it. And, at one time, we had a sealed federal lien against the property."

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.



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