City Issues Moratorium On New Yards

No new salvage yards will be allowed in the city of Detroit for one year—and reputable yard owners say that’s a good thing.

Detroit Mayor Mike Duggan signed an executive order putting a moratorium on new salvage businesses. The city will not accept applications to establish or expand salvage businesses from April 1, 2019 to March 31, 2020.  Affected businesses include auto dismantlers, used tire storage and sales, used auto sales, and scrap processors.

According to a press release from the mayor’s office, establishments that fail to obtain all necessary city approvals that allow them to legally operate by April 1 will have to close. In his executive order, Duggan gave a number of reasons for the moratorium. Most of them centered around recyclers who break the law.

“Regulation and enforcement of these businesses has been a challenge for the city of Detroit due to … lack of compliance with zoning, property maintenance, and licensing standards, in addition to evidence of criminal activity furthered or condoned by some of these operations,” he wrote. “Many businesses are currently operating without benefit of a permit, a certificate of compliance, or a business license.”

Ross Lewicki, ARM of Michigan president and owner of Highway Auto Parts in Detroit supports the moratorium and says other yard owners do, too.

“My understanding of the moratorium is that the city wants to get control of what’s going on,” he said. “In our industry, it’s easy to operate a stereotypical junkyard, a rundown place, and possibly break the law. Reputable salvage yard owners are happy about it.”

Duggan’s order also mentioned a recent and rapid increase in the establishment and expansion of salvage business, something that Lewicki has also noticed. Over the past few years, Lewicki has seen 15 new salvage businesses open within one block of his own yard.

“The mayor is correct in saying a lot of these businesses have been popping up like weeds,” he said. “Up until recently, the city wasn’t requiring much. It was easy for anyone to get a license. As long as they had a physical address, they could open a salvage yard.”

Lewicki said it can be difficult for law-abiding yard owners to compete with yards that operate illegally.

“The competition for the good guys is insanely high,” he said. “There’s a lot of things the good, reputable yards can’t do. They’re competing with yards that are selling parts dirt cheap, and who knows where they came from. I think it’s something our industry has always been plagued with. People operate outside the rules.”

Finally, Duggan mentioned the effect that improperly run or abandoned salvage yards can have on neighborhoods.

“(They) can leave vacant, blighted buildings and contaminated land on commercial corridors,” he wrote, “resulting in excessive blight, traffic, noise, crime, and environmental concerns.”

Lewicki agreed.

“As I understand it, the biggest problem is the look of them,” he said. “A lot of these businesses are stereotypical junkyards, and neighbors complained. The city is getting a lot of complaints that these businesses look like garbage.”

Lewicki says he has met with the mayor’s corporate council and given ideas for best practices for salvage yards.

“The city is taking a look at what reputable yards are doing,” he said. “They’re trying to do a better job of vetting licensees. What they’ll come up with, I’m not sure.”

According to the mayor’s office, the city will spend the year reviewing regulations that are already in place and making any necessary changes. Specifically, the city will look at ways to limit over-concentration, increase compliance with property maintenance, decrease crime, and end illegal business operations.

“These type of problems have plagued our industry for a while now, and it got to a point in the city of Detroit where the city is going to try to crack down on it,” Lewicki said. “Overall, the reputable yards are happy. If you’re going to have a business in our city, you have to operate within the law. It’s going to give us a better image.”

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