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RE-IMAGINING DETROIT EXPANDING OPPORTUNITIES TO RISE LIKE A PHOENIX Author: Bro. Stanley L. de Jongh, Esq. Gamma Tau Chapter, Michigan State May 22, 1980, Five Majestic Crusaders
AMERICA’S PARADISE TO PARADISE VALLEY
YOUR HOME IS YOUR CASTLE
BEAUTY IS IN THE EYES OF THE BEHOLDER
RE-CONFIGURATION OF DETROIT • LEGAL LANDSCAPE: Sources of Authority: “W A C w/ the Law” Written Law: 1. United States Constitution 2. Michigan Constitution 3. Uniform Condemnation Procedures Act Admin. Law: City Agencies (DEGC, DAH, DNR BSE, DEA) Case Law: U.S. Supreme Court Decisions Michigan Supreme Court Decisions
HISTORY OF EMINENT DOMAIN“TAKING PROPERTY” • 1. Term “Eminent Domain” was originally used in 1625 by Dutch Jurist Hugo Grotius who described the property of subjects is under the “dominium eminens” of the state. • 2. The First Case of E.D. in English law was the “Saltpeter Case” in which the English King, needed saltpeter for munitions and took a saltpeter mine from a private ind. Who sued the King and the Court Established the “Right of the Sovereign” to take private property for public use, without liability for trespass but requiring payment of compensation for the taken saltpeter.
EMINENT DOMAIN IN THE USA 1. The Fifth Amendment to the United States Constitution states: No person shall be…deprived of life, liberty or property, without due process of law; [n]or shall private property be taken for public use, without just compensation.”” 2. Typical Public Uses: E.D. has driven the dev. Of railroads, defense infrastructure during WWI and the Cold War; in the 1950s more than 42,000 miles of roads and highways, ports, airports, gov. buildings, and public utility facilities. 3. Expansive Interpretation Starting in 1954: Berman v. Parker, in which the U.S. Supreme Court permitted the District of Columbia to raze properties that were primarily---but not entirely, blighted, in order to transfer the sites to private redevelopers who would construct condos, private office buildings, and a shopping center. The S.Ct. ruled against the owners of the non-blighted property on the basis that the project should be judged on its plans as a whole, not on a parcel by parcel basis.
EMINENT DOMAIN IN THE 21ST CENTURY • Public Use: U.S. Supreme Court: Kelo v. City of London 545 U.S.469 (2005) allows the government in Connecticut to take private property and turn it over to a Private Developer to boost the City’s economic conditions. • BUT STATES MAY IMPOSE HIGHER RESTRICTIONS ON TAKING REAL PROPERTY:
GREATER RESTRICTIONS IN MICHIGAN“County Didn’t get the Bounty” • Public Use in MI: 2004 • MI Supreme Court Decision Wayne County v. Hatchcock reversed earlier precedents (ie. 1981 Poletown MI Supreme Ct. decision) by holding that the “Public Use” power could not encompass the taking of one person’s property for the purpose of giving it to another person, despite the argument by Wayne County that the project would serve the public good through jobs and economic prosperity.
ILLINOIS, MICHIGAN, OKLAHOMA, GEORGIA, NEW HAMPSHIRE, FLORIDA, OHIO, SOUTH CAROLINA & PENNSYLVANIA“All for One and One for All” • The Courts in the above states have taken the position and/or the citizens have passed Constitutional Amendments that: • 1. The Taking of Private Land for Economic Redevelopment; • 2. For the reconveyance of the Taken Land to Private Cos. ; • 3. For the Construction of private, profit-making enterprises such as shopping malls, factories, office bldgs., and even gambling casinos DOES NOT MEET THE “PUBLIC USE” LIMITATION UNDER THE RESPECTIVE STATE CONSTITUTIONS.
EMINENT DOMAIN PROCEDURE IN MICHIGAN“Meeting of the Minds or Meet You in Court” • Civil Procedure Relating to Eminent Domain. • Pre-Lawsuit Negotiations with the Property Owner. • Pre-Trial Procedures. • Payment of Estimated Good Faith Compensation. • Expert Fees and Attorney Fees.
GOOD FAITH NEGOTIATIONSGood Faith & the Gov.? • Pre-Suit Negotiations with the Property Owner. • Michigan has adopted the Uniform Condemnation Procedures Act (““UCPA””). • The UCPA provides the framework for the civil procedure of eminent domain cases. The process begins with the government agency contacting the property owner with a ““good faith offer”” to purchase the property. Section 5 of the UCPA provides that a condemning agency must make a property owner a good-faith offer of just compensation for the property. M.C.L. §§ 213.55(1). • Section 5(1) of the UCPA provides that if an appraisal has been prepared, the agency must supply a copy to the property owner. The UCPA provides standards for an agency's acquisition of land, the conducting of condemnation actions, and the determination of just compensation. M.C.L. §§ 213.52(1).
BEFORE 2006 THE MICHIGAN CONSTITUTION • 1. The Michigan Constitution ORIGINALLY PROVIDED THAT, ““Private property shall not be taken for public use without just compensation therefor being first made or secured in a manner prescribed by law. Compensation shall be determined in proceedings in a court of record.”” Const. 1963, Art. 10, §§ 2. The purpose of requiring a government agency that is acquiring property to pay just compensation is to put the property owner in as good a position as it would have been had the taking not occurred. Miller Bros. v. Dep't of Natural Resources, 203 Mich App 674, 685; 513 NW2d 217 (1994).
2006 MICHIGAN CONSTITUTIONAL AMENDMENT(“Public Use is now Useless for Econ.Dev.”) • STATE CONSTITUTION (CONSTITUTION OF MICHIGAN OF 1963)§ 2 Eminent domain; compensation. Sec. 2. • Private property shall not be taken for public use without just compensation therefore being first made or secured in a manner prescribed by law. If private property consisting of an individual’s principal residence is taken for public use, the amount of compensation made and determined for that taking shall be not less than 125%of that property’s fair market value, in addition to any other reimbursement allowed by law. Compensation shall be determined in proceedings in a court of record. • “Public use” does not include the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenues. Private property otherwise may be taken for reasons of public use as that term is understood on the effective date of the amendment to this constitution that added this paragraph. • In a condemnation action, the burden of proof is on the condemning authority to demonstrate, by the preponderance of the evidence, that the taking of a private property is for a public use, unless the condemnation action involves a taking for the eradication of blight, in which case the burden of proof is on the condemning authority to demonstrate, by clear and convincing evidence, that the taking of that property is for a public use. (146) • Any existing right, grant, or benefit afforded to property owners as of November 1, 2005, whether provided by this section, by statute, or otherwise, shall be preserved and shall not be abrogated or impaired by the constitutional amendment that added this paragraph. • History: Const. 1963, Art. X, § 2, Eff. Jan. 1, 1964 ;-- Am. S.J.R. E, approved Nov. 7, 2006, Eff. Dec. 23, 2006
CONDEMNATION LAWSUIT“Keeping it Real” • Pre-Trial Procedures. • The UCPA details what must be included in the condemnation complaint. In addition to other allegations permitted or required by law, the complaint must include or have annexed to it: • · A plan showing the property to be taken; • · A statement of the purpose for which the property is being taken; • · The name of each known owner of the property being taken; • · A statement setting forth the time within which the defendants may contest the right of the condemning agency to take the property; • · The amount that will be paid and to whom it will be paid if there is a default; • · The arrangements which have been made regarding the escrow of the good faith compensation; and • · A declaration of taking describing the property to be taken, whether fluid or mineral rights are included and the sum of money estimated by the agency to be just compensation for each parcel of property being acquired. • MCLA 213.55(2).
YOUR HOME IS YOUR CASTLE 3 • MICHIGAN v. DR. OSSIAN SWEET: Judge Frank Murphy, May 13, 1926: Dr. Sweet had the right, under the law, to purchase and occupy the dwelling house on Garland Avenue. Under the law, a man's house is his castle. It is his castle, whether he is white or black, and no man has the right to assault or invade it. The negro is, now by the Constitution of the United States, given full citizenship with the white man, and all the rights and privileges of citizenship attend him wherever he goes. Our Supreme Court has said, all citizens, whether white or black, are equal before the law. The white man can have no rights or privileges that are denied to the black. Socially, people may do as they please, if they do it within the law. The whites may associate together and exclude the blacks, or the blacks may associate together and exclude the whites, from their dwelling houses and private grounds, and from their own private activities. • RESTRICTIVE COVENANTS IN DEEDS PRECLUDING AFRICAN/BLACK OWNERSHIP WAS HELD TO BE UNCONSTITUTIONAL Shelley v. Kraemer: 5.3.1948: Court Declares discriminatory racially restrictive covenants in Chicago to be unconstitutional.
VALUATION IS A JURY QUESTION • Section 12 of the UCPA provides that either the government agency or the property owner is entitled to a jury trial over issue of just compensation. MCLA 213.62.
JURY INSTRUCTIONS TO DETERMINE VALUE“There are Lies, BAD Lies & Statistics” • The issue of just compensation for condemned property, IT IS QUESTION OF FACT FOR THE JURY, SO THE jurors are instructed that the following may be taken into consideration: • Was the transaction freely entered into in good faith? • If the transaction was on credit, how much should the price be discounted to reflect the amount which the property would have brought in cash? • How near is the date of the other transaction to the date of valuation in this case? • How near is the size and shape of the property to the size and shape of the owner's property? • How similar are the physical features, including both improvements and natural features? • How similar is the use to which the other property is, or may be, put, to the use which is, or may be, made of the owner's property? • How far is the other property from the owner's property, and is the distance important? • How similar is the neighborhood of the other property to the neighborhood of the owner's property? Is the zoning classification the same on both properties?SJI2d, 90.16.
JUST COMPENSATION • Expert appraisers base their determination of just compensation on the ““market value”” of the property at its ““highest and best use.”” Market value is the highest price the property would bring if exposed for sale on the open market, with a reasonable time allowed to find a purchaser with knowledge of all of the uses and purposes to which it is adapted and for which it is capable of being used. To determine market value, the cost approach, income approach or comparative market approach are used.
JURY INSTRUCTION ON JUST COMPENSATION • JURY INSTRUCTION ON Highest and Best Use. • In deciding the market value of the property, the jury must base its decision on the ““highest and best use”” of the property. Highest and best use means the most profitable and advantageous use the owner may make of the property even if the property is presently used for a different purpose or is vacant, so long as there is a market demand for such use. See, SJI2d 90.09. Under this definition, even if the property is zoned for one use, if there was a reasonable possibility, absent the threat of this condemnation case, that the zoning classification would have been changed, the jury is instructed to consider this possibility in arriving at the value of the property on the date of taking. SJI2d 90.10. • Because the value of a parcel of property may vary significantly based on its use (e.g., commercial v residential), the appraiser’’s assumptions regarding the zoning classification and whether it would be changed will have a significant impact on the outcome of the appraisal.
VALUATION HEARING“Show me the Money” • Because both the government and the property owner typically present the expert opinions of property appraisers to support their respective calculations of ““just compensation,”” the condemnation trial is likely to be a ““battle of the experts”” over the issue. • FORMULA: 125% x (PROP. VAL.) = $$$ • Jury ?
GOVERNMENT’S FAILURE TO PROVIDE SERVICES HAS CONSEQUENCES“Stop Services Defend a Lawsuit” • An Inverse condemnation may also occur even if there is not a physical taking of the property where a governmental regulation effectively prevents use of a landowner's property for any profitable purpose. Id. Stated differently, "In the regulatory context, a compensable taking occurs when the government uses its power to so restrict the use of property that its owner has been deprived of all economically viable use." Miller Brothers v DNR, 203 Mich App 674, 679 (1994), citing Electrotec, Inc v H F Campbell Co, 433 Mich 57, 68-69 (1989)
DOWNSIZE TO RIGHT-SIZE 16 • DETROIT HAS: Population is spread across some 140 Square Miles of: Streets (1438 Miles) Police Services Sidewalks Garbage Services Light Poles Fire Services Bus Routes EMS Services
1. PHILADELPHIA, PA 2. BALTIMORE, MD 3. MEMPHIS, TN 4. FLINT, MI 5. PITTSBURGH, PA GLOBALLY: CITIES THROUGHOUT GERMANY CITIES ACROSS U.S.A.THAT ARE SHRINKING“Ground Zero has a lot of Company”
SURVIVE & DOWNSIZE 18 • 1. Detroit is losing its population. • 2. Consolidate Resources and Target Successful Communities with the Resources. • 3. Voluntary Relocations • 4. Involuntary Relocations: Use of Eminent Domain to Non-Profit or Green Space activities WHAT WILL THE WORLD LOOK LIKE IN DETROIT?
TASTE OF GREEN SPACE 19 • Non-Profit Or Green Space Endeavors: 1. Urban Farming (Non-Profit Entity) 2. Urban Parks, Urban Gardening, Bike Paths (RIVERWALK, DEQUINDRE CUT) 3. Co-operative Town-Housing 4. Loft Style Apt. Housing WHAT WILL DETROIT LOOK LIKE IN 25 YEARS
GREENING OF DETROIT • 1. ARSENAL OF THE DEMOCRACY • 2. MOTOR CITY • 3. MOTOWN • 4. RENAISSANCE CITY
DESTINY IS NOT WRITTEN FOR US, IT IS WRITTEN BY US !!!!!!! (President Obama 2010)
PURSUIT OF REAL PROPERTY 4 • The value of Reducing Economic Inequality is in Conflict with the Right To Own Private Property • Reducing Economic Inequality typically involves the transfer of Property (usually in the form of $ or real estate) from Some People(Haves) to Others (Have Nots) • SOME HAVE EVERYTHING
WHILE OTHERS CARRY EVERYTHING THAT THEY HAVE!
CAPITALISM IS BASED ON PRIVATE PROPERTY RIGHTS 5 • For Many, Life, Liberty, Property and the Pursuit of Happiness are all tied together. • Under Capitalism: Property consists of: 1. Personal Possessions and 2. Wealth Building Assets (such as Factory Assembly Lines)
REGULATING REAL PROPERTY 9 • 1. Zoning: Building Safety Engineering Department for Inspections, Permits etc… • 2. Environmental Issues: a. Detroit Dept. of Environmental Affairs b. Michigan Dept. of Environmental Quality/ Department of Natural Resources 3. Blight: Department of Administrative Hearings 4. Demolition: Building Safety Engineering (Open and Dangerous
“ It’s not what you got that counts, it’s what you do with what you have, that counts” • The Renaissance City can start to Rise from the Ashes like a Phoenix through the: • DETROIT LAND BANK AUTHORITY: 1. Allows a municipality to create a Land Bank for Tax Reverted Properties. 2. Approx. 38000 Tax Reverted Properties in the ashes. Start the Process with this portfolio.
URBAN RENEWAL PROJECTS “It’s Not Always Cheaper to Keep Her”17 • 1. Urban Renewal Projects have a Great Impact upon the Community. • Examples: a. Urban Renewal by constructing a Freeway (I-75) through Black Bottom/Paradise Valley b. Years Later: Elmwood Park/Lafayette Park c. Removal of Projects replaced by Private Developments like: Woodbridge Estates
CAPITALISM IS BASED ON THE CORPORATE FORMATION 6 • Investor Owned Corporations are in many ways the Pre-eminent Capitalistic Institution. • Funds invested by the Owners of the Corporation are known as Capital • Capitalism is meeting the Egalitarian Movement (Property should be distributed Equally) in the formation of more Green Spaces in Our Community