Days before former Detroit Mayor Mike Duggan dropped his gubernatorial bid Thursday, the cloud over his 12-year neighborhood demolition campaign darkened, with testing and cleanup costs for toxic dirt mounting and a recently revealed FBI probe related to the program.
But at a May 21 news conference announcing the end of his campaign, Duggan denied any connection between his withdrawal from the race and tarnished cornerstone program, saying “that is not on voters’ minds.”
Duggan, a three-term Detroit mayor and longtime Democrat, announced in December 2024 that he was running to replace Gov. Gretchen Whitmer as an independent, a risky move that generated both enthusiasm and skepticism. At the news conference, the former mayor said internal polling and the changing national political climate led to his exit from the race.
The number of Detroit properties where contaminated backfill dirt is believed to have been used to fill basement holes has grown to more than 650 since Duggan announced in December that a demolition contractor and city-approved backfill dirt supplier had potentially contaminated more than 500 sites.
On May 19, Detroit city council members bristled over a $52,000 contract to remove and replace contaminated backfill at a single residential demolition site – twice the cost of a standard demolition and nearly three times the $18,000-per‑house cleanup cost Duggan projected in December. City officials told council members the contract was an outlier but declined to provide the Free Press with additional figures for recent backfill remediation, citing ongoing litigation and investigation, saying only that cleanup at 80 other properties cost less than the $50,000 threshold requiring council approval. Duggan previously said he expects the cleanup of the latest known contamination to cost up to $8 million.
The administration of Mayor Mary Sheffield, who replaced Duggan, is also requesting council approval for an additional $3.5 million for soil testing, in what one councilmember has called “a tough pill to swallow.”
At his news conference at Huntington Place, Duggan said that during town halls over the last month with a total of more than 2,000 people in attendance, “dirt did not come up at a single one of those.”
“That is not on voters’ minds,” he said, adding, “I am confident Mayor Sheffield will handle it appropriately and I am confident that the money left behind can take care of it.”
In December, Duggan said a $15 million reserve fund was in place to help cover backfill cleanup costs, but acknowledged the money was also set aside for additional demolition problems, like broken sidewalks and property damage.
The former mayor announced the latest wave of contamination in the program long plagued by toxic dirt approximately a week before he left office to campaign full-time for governor as an independent. At a Dec. 22 news conference, he said that, in September, he’d instructed Detroit police to open an investigation into Detroit-based contractor Gayanga Co. for potential fraud after the Detroit Office of the Inspector General found backfill contamination at dozens of properties where the company had conducted demolitions. Duggan also said that state environmental regulators were examining Iron Horse of Milford Township, a dirt supplier the city approved to work in the program despite the fact that its owner pleaded guilty to bid-rigging in the Kwame Kilpatrick era. Iron Horse, Duggan said, provided backfill to Gayanga and three other demolition firms who together used the fill at 424 more demolitions.
In late April, the Free Press reported the FBI had since taken over the Detroit police investigation, after the department said they contacted the agency due to the “complexity” of the Gayanga case, “just as we would in any other case where we identify a federal nexus.” Federal authorities took over the investigation in February, Detroit police said.
Both companies have denied wrongdoing. Gayanga has filed a $100 million defamation suit against the Detroit Office of the Inspector General, whose investigation paved the way for the company’s suspension from the demolition program. Gayanga has since shut down, it announced last week.
Duggan’s more than $515 million, 12-year blitz to knock down approximately 27,000 homes drew scrutiny from its inception, initially for questionable bidding practices and rising costs.
In 2019, federal prosecutors charged former Detroit Building Authority manager Aradondo Haskins and demolition contractor David Holman in a bid‑rigging and bribery case tied to the program. Both admitted to taking hundreds of thousands of dollars in bribes and rigging bids, prompting changes in how the city monitored the program.
At the time, the program was federally funded. Detroit taxpayers picked up the tab from 2021 through 2025, after voters approved a $250 million bond measure in 2020.
At a May 11 meeting of Council’s Public Health and Safety Committee first reported on by BridgeDetroit, Council Member Denzel McCampbell said the current costly cleanup is the result of an aggressive approach to razing houses, saying “the rush and the amount of demolition that occurred leads to something like this, in my view, happening and us now having to go back.”
“For $50,000, is that what we are going to be spending on each one of these sites that we find that the testing comes back that it is contaminated?” he said. “Because, at that point, that is a lot of money that we also have already paid to demolish and fill on these sites. And now we’re doing it again at $50,000 a pop. That adds even more concerns.”
Duggan defended the program while campaigning for governor, calling it a historic success that transformed neighborhoods and boosted property values. Just 240 houses were left to be razed as of December, Duggan said.
The latest known contamination is concentrated at properties where demolitions occurred in 2024 and 2025, city officials have said.
Early test results examined by the Free Press showed chemicals such as lead and arsenic in excess of state environmental limits at some of the properties. Experts say prolonged direct contact with soil laced with such heavy metals can harm residents, such as through gardening or children playing.
Whether contamination lives at the surface of the sites of concern is unknown; the city is limiting its inquiry to contamination buried more than a foot underground, the Free Press found, saying issues have only been raised with backfill, not topsoil.
Duggan has meanwhile stressed the need to remove contaminated backfill because it can jeopardize future development, saying building costs would “be far more expensive … if contaminated backfill is left behind.”
“I am trying to set the stage so that we can see houses re-emerge in these neighborhoods in as cost-effective a way as possible, which is why we go and investigate every single case where there’s a problem,” Duggan said Dec. 22.
City Council postponed voting Tuesday on a $3.5 million increase to the city’s $1 million backfill-testing contract with environmental consultant Mannik & Smith Group, saying more discussion was needed and that a closed session is expected to be held in two weeks.
Violet Ikonomova is an investigative reporter with the Detroit Free Press.
This article originally appeared on Detroit Free Press: Duggan drops bid for governor amid toxic dirt fallout in Detroit
Reporting by Violet Ikonomova, Detroit Free Press / Detroit Free Press
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