I was pleased back in 2004 when the Michigan Supreme Court ruled that cities can no longer use eminent domain to take land for private development (County of Wayne v. Hathcock.) I had seen neighborhoods and elderly people in Hamtramck and Detroit devastated back in the early 1980s when eminent domain was used to give their homes and churches and little businesses to General Motors for the Poletown plant.
I thought this new ruling would protect homeowners from greedy corporations and their lackeys in government. But I was totally wrong.
John Mogk, a law professor at Wayne State University who has been deeply involved in urban affairs for half a century, persuaded me I was wrong several years ago. “What outlawing eminent domain means is that cities are held up by speculators who see a deal coming, buy up land and then hold the city up for exorbitant amounts,” he told me.
And if anyone needed proof, just look at the deal City Council approved yesterday to put together enough land to get Fiat Chrysler America, or FCA, to build a new plant on the city’s east side, one that will supposedly mean $2.5 billion in new investment and 5,000 jobs. There is no way Detroit could turn down that deal, and the sharpies knew it.
Unfortunately, it also meant a huge windfall for people like billionaire Anthony Soave, a heavy contributor to Mike Duggan’s campaigns, a creature named Michael Kelly, who has bragged about being a speculator and is behind on his taxes, and of course the infamous Matty Moroun. Detroit is giving this 92-year-old billionaire, slumlord, and chronic obstructionist $43 million in cash and a set of parcels of land he wants near his Ambassador Bridge, a deal worth at least $75 million.
In return, the city gets a parking lot and a partly demolished old industrial site which the city valued at less than $1.7 million for tax purposes. Moroun also gets title to several parcels of land he has been using for years, without paying taxes.
Nevertheless, experts say the city had no choice. If they still had the power to acquire land via eminent domain, the taxpayers would have saved millions on this deal and many others – and projects like the badly needed new Gordie Howe International Bridge wouldn’t have taken nearly so long to put together.
“Speculators, investors and large landowners are entitled to the fair market value of their land – and nothing more,” Mogk said.
“If eminent domain was available, there would be no need for excessive use of public funds and additional land swaps in distant neighborhoods,” he added.
What’s needed, Mogk believes, is an amendment to Michigan’s constitution that would allow governments to use of eminent domain for development – but with safeguards. He admits this was sometimes abused in the past — but says that could largely be prevented by exempting homeowners who have actually lived in their property at least a year. They would have the right to refuse or hold out for the price they want.
Unfortunately, no campaign to push for such an amendment is on the horizon. When I talked to Mayor Duggan about this a few years ago, he didn’t seem enthusiastic about the idea. But such an amendment could help revitalize Michigan’s aging cities, save them money — and free them from the power of speculators like Moroun.
