The city is having trouble locating the owners of these properties? I find that hard to believe. Whom do they send the property tax bill to? Besides, if it absolutely, positively must be destroyed overnight, call the Marines. Another solution (and fairly common) is to have the fire department set old abandoned houses ablaze for training purposes. In fact, the city could bring other departments in for training.
Actually you don't have to involve the fire dept. For years Detroit has experienced "Hell Night" which was the night before Halloween. People set abandoned buildings on fire all night and kept the fire dept. extremely busy. I don't know how this started, but it has gone on for years. It is rarely reported in the national news.
We have that same problem here in Lansing. I'm not in any way a fan of property seizure, but when a derelict building stands for years, without taxes being paid, without improvements being made, the property owner has forfeited their right of ownership. That's a really good idea you have, btw, using these properties as training locations. So good, in fact, I'll bet the powers that be in Detroit will never think of it.