Herman Kiefer developer gets until August 2027 to find a buyer under proposed Detroit settlement

Under the proposal, both the buyer and its redevelopment plan would need the city's approval, the Detroit Free Press reported. If no buyer emerges, Castellano's limited liability companies would hand the 38-acre campus and the former Hutchins and Crosman schools back to the city, which would refund the $925,000 he paid in 2018. Castellano would also dismiss every claim he has filed against the city and the Detroit Land Bank Authority. Deputy corporation counsel James Noseda said the deal ends costly litigation and keeps the city in control of what happens to the site. A lawyer for Castellano did not respond to the Free Press.

The settlement reached the full council without a recommendation. The council's Internal Operations committee sent it to formal session on Nov. 4 at the Law Department's request, according to Gratiot Labs, which summarizes city meetings.

The campus, including a seven-story hospital designed by Albert Kahn and finished in 1928, has been empty since the city health department left in 2013. Castellano marketed it as the Creative Commerce Campus Detroit but did not find office or institutional tenants after the pandemic. He did not meet a spring 2025 deadline to demonstrate progress, and his LLCs filed for bankruptcy in June 2025; the city says that came only days before he had to return the title. In June 2026 he sued the city and the land bank, alleging they obstructed the project by withholding approvals and piling on code citations; those claims have not been tested in court. The land bank took back 44 of the 115 nearby houses in the deal in 2024.

The council's decision and the names of any interested buyers were not public when the Free Press published.