One of Detroit’s largest private landowners who recently scored a land speculation win near the city’s municipal airport has had a bitter falling-out with his longtime business partner, and the drama is starting to play out in court.
Michael Kelly has, over the years, acquired hundreds of Detroit properties at Wayne County’s annual tax foreclosure auction, sometimes with his now-former business partner, Matthew Tatarian, who also is one of the city’s top landowners.
Last month, Detroit City Council approved a land condemnation settlement with Kelly that will pay him $444,135 in exchange for his bundle of 28 vacant parcels next to Coleman A. Young Municipal Airport that are needed for an airport expansion. Kelly bought some of those parcels at the tax auction in the mid-2010s for just $500.
Kelly and Tatarian had been partners in real estate since the late 1990s, and by Kelly’s recollection, together bought about 525 properties at the tax foreclosure auction over the years, splitting the ownership on each property 50/50 per handshake agreements.
But then came a rupture in their business relationship.
“They were partners and tight,” Kelly’s lawyer, Michael Balian, told the Free Press earlier in March. “I’m not sure what happened.”
What is clear is that warm feelings between the men are gone.
Kelly is now suing Tatarian in Wayne County Circuit Court, seeking monetary damages related to their fractured partnership and an injunction to prevent the sale of the remaining 125 or so properties that Kelly claims he and Tatarian still own together.
The lawsuit accuses Tatarian of sidelining Kelly in their joint venture — called Bimini Properties II — and denying Kelly his rightful co-ownership of the 125 properties, that, by Kelly’s estimation, have a market value of over $1.2 million.
Although Kelly’s lawsuit was filed on Dec. 4, it has not been previously reported, and the court papers weren’t officially served until this month, when they were delivered to a coffee shop tenant in one of Tatarian’s buildings. Tatarian had yet to file a response to Kelly’s suit as of Monday, March 16.
However, some of the lawsuit’s core claims could be addressed at a March 20 court hearing in a separate Wayne County case in which Tatarian’s and Kelly’s businesses are both defendants. Tatarian is expected to attend the hearing via Zoom and Kelly could attend in person.
Bimini Properties has long been associated with Tatarian and Tatarian’s name is on its corporate paperwork, although Kelly maintains that the company was in fact originated by Tatarian to facilitate their joint ventures.
Kelly’s lawsuit asks the judge to appoint a receiver to manage Bimini Properties and to perform a full accounting of all the properties.
“The depth and longevity of this partnership highlight the profound breach of trust and fiduciary duty at the heart of this dispute,” Kelly’s lawsuit says.
Reached by phone in early March, Tatarian told the Free Press that he has been on a sailing trip and was unaware of the lawsuit.
Nevertheless, Tatarian pushed back hard on the core claims Kelly is making.
He said he was indeed once a business partner with Kelly, but that they parted ways years ago. He insisted that Kelly has no ownership stakes in Bimini Properties or its property holdings.
Tatarian, who gave his age as the “late 60s,” said he ended his relationship with Kelly because he questioned his business practices.
“I thought he was a straight-up guy,” Tatarian said, “and as soon as I started realizing he wasn’t, I started backing away and backing away and backing away.”
Tatarian said he has sent letters to title companies advising them that Kelly doesn’t represent Bimini Properties and that they should not accept documents claiming otherwise.
“I don’t want to be associated with him. I don’t want nothing to do with him,” Tatarian said.
“Yeah, a lot of years with that guy,” he later added. “And he’s been nothing but a nightmare.”
Kelly’s lawyer, Michael Balian of Bloomfield Hills-based Balian Legal, said in an interview last week that Tatarian’s claims of shady dealings are false and defamatory. He said he was unaware of any instances involving Kelly and purported misrepresentations.
Balian insisted that the properties at the center of Kelly’s lawsuit are indeed co-owned by Kelly and Tatarian. Kelly’s own business is known as Detroit Property Exchange.
“They both know which properties belong to who,” Balian said. “The way they operated over the years was ‘We’ll buy this together and we’ll put it in Bimini or we’ll put it in Detroit Property Exchange and we’ll deal with it when we start selling.’ ”
What Kelly is attempting to do, Balian said, is unwind their partnership and divide up all of the properties they own together. He compared the situation to the dissolution of a marriage.
“It’s not just Bimini properties — it’s all the properties,” Balian said. “They have a whole Excel spreadsheet that lists all of the properties that they have together and how to divide them, and that’s what we’ve always been trying to work toward. And, for some reason, Matt always stops working toward dividing the properties — I don’t know why.”
A property-buying duo
Tatarian said he and Kelly first met in the late 1990s, when Kelly was in the tire business and Tatarian was running a warehouse and had trucks that needed tires.
From there they got into real estate investment and together started acquiring properties at the annual Wayne County tax foreclosure auction.
Kelly and Tatarian made headlines in the 2000s after buying in the auction a small parking lot that is across from the prominent Perfecting Church on Detroit’s east side. Although church-owned property is normally exempt from property taxes, an oversight or error resulted in the parcel getting seized for delinquent taxes and sold in the 2003 auction.
Kelly and Tatarian reportedly offered to sell the land back to the church, which led to the church filing a lawsuit.
Later it emerged that a recording error in the county treasurer’s office caused the church to never receive notice about a pending tax foreclosure on the parcel. The case made it all the way to the Michigan Supreme Court, which in 2007 sided with Perfecting Church and gave the parking lot back.
Bro helps out
In 2010, Tatarian appeared to extend some help to Kelly after Kelly was hit with three court judgments that put him on the hook for over $380,000, according to court filings.
Kelly asked Tatarian for assistance in negotiating post-judgment settlements with each of the creditors. Tatarian was able to purchase the three judgment debts at a discounted rate, with the money for the purchases actually coming from Kelly, according to filings by Kelly’s attorneys.
Tatarian’s assistance in the matter came up years later in 2019, when Tatarian sued Kelly to get payment on those three judgments.
Kelly’s lawyer argued that Kelly had long assumed he didn’t owe Tatarian any money, as he was the one who provided the funds for the debt purchases and years had gone by while Tatarian never mentioned anything about it.
In a May 2020 affidavit that was part of Kelly’s defense, he said that he and Tatarian had known each other for 23 years, been business partners for over 20 years and had continued their relationship until as recently as 2018.
Over the course of their partnership they bought about 525 properties at the tax auction, the affidavit says, splitting the ownership in each property.
A Wayne County judge ultimately sided with Kelly and dismissed Tatarian’s lawsuit.
Land contract case ongoing
Although Kelly and Tatarian are no longer business partners, their respective businesses are codefendants in an ongoing legal dispute that concerns commercial property on the 19300 block of West Grand River in Detroit’s Grandmont Rosedale neighborhood.
A lawsuit was brought in 2023 by businesswoman Jennifer Sherman, who says she entered into a $60,000 land contract back in 2011 with Bimini Properties II to eventually buy the property.
She made a $2,000 down payment on the contract and then regular $650 monthly installments, which were processed through Kelly’s Detroit Property Exchange, court documents say.
Sherman’s management company eventually found two storefront tenants to lease the property — a hair salon and a media services business — and the tenants each paid her $1,000 to $1,250 per month in rent.
But about a year before Sherman was to make the final monthly installment on the land contract and gain title to the property, Bimini Properties transferred ownership of it to Tatarian’s daughter, Cindy Anderson, for $1, court documents show.
Sherman went on to sue, claiming that her land contract wasn’t being honored and that she is the rightful owner.
The West Grand River property also is one of the 125 properties at issue in Kelly’s recent lawsuit.
In last week’s phone interview, Tatarian said he and his daughter were unaware of Sherman’s land contract when Bimini Properties transferred the property to Anderson via quit claim deed in January 2022.
Court records show that the 2011 land contract was not formally recorded until several weeks after the deed transfer to Anderson.
“There was no land contract that we’re aware of at (that) point, because there’s nothing on record,” Tatarian recalled.
What’s more, Tatarian said, the individual who executed the land contract on behalf of Bimini Properties back in 2011 was in fact not an agent of Bimini Properties, and therefore lacked authority to enter the deal.
But Sherman’s attorney, Travis Payson of LeVasseur Dyer & Associates, is skeptical of that claim that the individual was only posing as a Bimini Properties agent and that they knew nothing about the land contract’s existence for more than a decade.
“Our client fulfilled the terms of the land contract and the deed should rightfully transfer to her,” Payson said.
In recent court filings on March 9, a lawyer for Bimini Properties and Anderson backed Tatarian’s account, and went so far as to suggest that there was fraud involved in the 2011 land contract deal that led Sherman to make a decade of monthly payments to Kelly’s Detroit Property Exchange for the building.
The lawyer insisted that the individual who originally signed the contract on behalf of Bimini Properties wasn’t affiliated with the firm, and that none of the payments Sherman made to Detroit Property Exchange were ever shared with Bimini Properties.
Not until early January 2022, when it undertook an inventory of all its properties, did Bimini Properties discover it actually owned the West Grand River building, according to the lawyer, who portrayed Sherman as also being a victim “of the foul play that was afoot.”
“Through no fault of her own, (Sherman) believes she was dealing with people and entities authorized to sell and accept funds for her purchase of the property,” the lawyer, James Austin, wrote. “Such is not the case.”
Austin asked the judge for one of two resolutions: Either confirm that the building’s title belongs to Anderson and make Detroit Property Exchange repay Sherman for the many land contract payments she made, or award title to Sherman, but require Detroit Property Exchange to disgorge all of Sherman’s past land contract payments and give them to Bimini Properties, with interest.
The case is still pending in Wayne County Circuit Court with the second part of an evidentiary hearing set for March 20 that would continue a hearing that happened last week. Tatarian is expected to attend the hearing via Zoom and Kelly could appear in person.
The two storefront tenants on the West Grand River property have since closed and appeared empty last week.
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @JCReindl
This article originally appeared on Detroit Free Press: Detroit land mogul sues former partner, sparking major property fight
Reporting by JC Reindl, Detroit Free Press / Detroit Free Press
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