Herman Kiefer settlement approved by Detroit council, putting the former hospital campus up for sale

Council members approved the deal on Nov. 10, several of them openly unhappy about it, The Detroit News reported. It settles litigation that grew out of the bankruptcy of Castellano's companies, which filed in June 2025 as the city moved to take the property back. Under the terms the Detroit Free Press reported before the vote, Castellano drops the claims he filed in June against the Detroit Land Bank Authority and the city.

The sale covers the hospital complex, the former Hutchins and Crosman schools plus an old nursing school: over 755,500 square feet of buildings, according to city documents cited by the News. The city has to approve any buyer and its redevelopment plan, the Free Press reported. If nobody buys by Aug. 1, 2027, title returns to Detroit and the city repays the $925,000 Castellano paid for the campus and schools in 2018.

Councilwoman Angela Whitfield Calloway voted yes but said the city would "more than likely" end up holding the deed again. James Noseda, the city's deputy corporation counsel, told the council the deal leaves two outcomes: a developer picked by the city, or city ownership. In a written statement, Castellano called the vote "a welcome step" and said his group put $14 million into stabilizing the campus and the blocks around it.

City officials could not say how many of the nearby houses and vacant lots tied to Castellano's land bank deals would be part of a sale, the News reported. The campus, including a seven-story Albert Kahn hospital building from 1928, has stood empty since 2013, when the city health department left.