Phoenix-based Urban Communities bought all 21 multifamily buildings in Detroit’s Palmer Park Historic District over about a year beginning in late 2020, then collapsed financially — leaving every property in receivership, foreclosed, or severely distressed, according to court records and Wayne County property filings reviewed by Outlier Media.

The failure has hollowed out more than a third of the apartment buildings in a neighborhood that Detroit historian Amy Elliot Bragg called “a really one-of-a-kind collection that you don’t see anywhere else in the city.”

Urban Communities, led by CEO Maximiliano Palacio, accumulated more than $4.1 million in unpaid property taxes on its Detroit portfolio by 2025 and stopped paying contractors in early 2023. When Wayne County auctioned five buildings seized for back taxes, not one received a single bid.

A neighborhood unlike any other in Detroit

Palmer Park is unusual in a city of single-family homes. The Palmer Park Historic District is built almost entirely of apartment buildings — 57 of them, according to a report for Detroit’s Historic District Commission — in styles ranging from Moorish and Art Deco to Tudor-Revival and Modern, constructed across decades by architects including Albert Kahn.

“The density, the diversity and the beauty” of those buildings make them “a really one-of-a-kind collection that you don’t see anywhere else in the city,” said Amy Elliot Bragg, a Detroit historian. She said long-term abandonment threatens not only individual structures but the district’s cohesion as a whole.

“Each individual apartment building is historically, architecturally significant in its own way,” Bragg said. “But the district as a whole also benefits from the density and the continuity of the neighborhood.”

A rapid buying spree, a rapid collapse

Urban Communities went on a buying spree beginning in late 2020, acquiring all 21 properties in its portfolio over about a year, according to Outlier Media’s review of filings at the Wayne County Register of Deeds. The company did not list purchase prices on the deeds it filed.

It struggled from the outset. The company had persistently high vacancy rates and mounting repair bills. Court filings in Michigan’s 3rd Circuit Court detail missed mortgage payments and a lawsuit between Urban Communities, its lender CoreVest, and several trusts that transferred properties to the company in exchange for an ownership stake. A complaint filed by the John Secco Trust and other plaintiffs alleges the 15 properties covered by the lawsuit had less than 50% occupancy, more than $2 million in unpaid bills, and nearly $700,000 in unpaid taxes.

Urban Communities took out a $25 million loan on 15 properties in June 2022. It missed its first payment nine months later. By 2025, the tax debt for the entire 21-property portfolio had ballooned to more than $4.1 million, court records show.

Edward Lennon, the attorney for Urban Communities and CEO Maximiliano Palacio, blamed increased construction costs, nearby crime, and the 36th District Court’s “refusal to enforce evictions for non-payment” in an emailed statement to Outlier Media.

“Urban Communities and its investors were wiped out of their equity investment, rendering a loss in excess of $17 million,” Lennon said.

Frank Simon, a court-appointed receiver managing 14 of the buildings for sale, said he inherited a deeply troubled situation.

“(The portfolio) definitely was not in good shape at all,” Simon said. “It was not managed well and had much deferred maintenance.”

Contractors left unpaid, tenants left without recourse

Multiple contractors filed liens against Urban Communities for hundreds of thousands of dollars in unpaid work after the company stopped paying its bills in early 2023.

Suzanne Pierce, co-owner of Genesee County-based Cardinal Roofing, said her company completed around 10 roofing jobs for Urban Communities under a $214,000 contract. When the company stopped paying in May 2023, it still owed her company roughly half that amount.

“We’re a smaller company,” Pierce said. “My husband and I own it, and we have four salesmen and a crew for commercial work. So it was a huge hit for us.”

Tenants fared no better. Dayton Martindale rented an Urban Communities apartment for about seven months starting in June 2022. He said a broken stove and oven went unrepaired for more than a month after he moved in, despite work orders and follow-up emails. When he withheld a month’s rent because he could not cook, the company filed for eviction. After a break-in months later, he said he was promised emergency maintenance to fix his doorknob.

“It was never fixed,” Martindale said. “I moved out about a month later, and I did not have a working doorknob that whole time.”

Emma Greschak, who lived in her Urban Communities apartment for most of 2022, said the building’s back door would not lock, numerous windows were broken, and both heat and hot water went out for a week.

“They didn’t care about the tenants at all and didn’t update the building,” Greschak said.

Both Martindale and Greschak later took Urban Communities to small claims court to recover their security deposits. Urban Communities sent no representative to either hearing. Both tenants won default judgments. Neither got their money back.

“I had to pay money, do some digging and go to court to be told I was owed my security deposit, then I never got it back,” Martindale said. “One can only assume this happened to every single person who lived there.”

What comes next

Wayne County tried to market five of the buildings it seized for unpaid taxes in a special auction earlier this year. Inspection reports documented stripped electrical wiring and plumbing, fire-damaged units, unsecured stairs, and paint and plaster coming off walls throughout at least one property. Not one of the five buildings drew a bid.

Adam Abusalah, a spokesperson for the county treasurer’s office, said another auction will be held for the five properties at a later date. Urban Communities sold one property with more than $122,000 in tax delinquency in February, and a separate property that the company lost to tax foreclosure sold at auction in September for $35,000 to a bidder based in Naples, Florida.

Simon, the court-appointed receiver, said the lender has put a “substantial” amount of money into renovations, though he declined to specify the amount, and that several companies have submitted offers for the portfolio. People still live in some of the buildings involved in the lawsuit, he said.

Urban Communities today barely exists. Its website is offline, and emails to its general address bounce back.

This story was originally reported by Aaron Mondry of Outlier Media and distributed through a partnership with the Associated Press.