Last year, the U.S. Supreme Court decided in a split 5-4 decision that government agencies could force homeowners and businesses to sell their privately-owned property for the purpose of economic development.
The court ruling, known as the Kelo Decision, was a case involving the city of New London, Conn., which condemned private property to be used as part of a redevelopment plan. The court saw the plan as a public benefit, therefore, a good reason to exercise eminent domain.
Michigan voters will decide how they feel on the issue on Nov. 7. Proposal 4 would amend the Michigan Constitution, restricting government's power to use eminent domain in purposes solely to promote economic growth.
According to William Nowling, director of media relations at Sterling Corp., a case in Lansing is still percolating where the state has declared an entire area as blighted. Many residents and businesses are concerned about their welfare including a 3-year-old McDonalds and a flower shop that has operated in the community for 50 years. Michigan's current law allows eminent domain to be used for blight removal.
If approved, the amendment will require the government to decide when to use eminent domain on a case-to-case basis using strict justification. Their authority to declare an entire area as blighted will be limited and determined individually. And only then, if the power of eminent domain is justified the government will be required to pay 125 percent of the fair market value to the owner, Nowling said.
According to Grand Haven City Manager Pat McGinnis, using eminent domain is sometimes necessary. Under a recent $100 million development plan the city exerted eminent domain when one of 20 owners of contaminated property refused to sell. The construction plan promised 600 jobs to a town of 11,000 people.
"It's not as harsh as it's made out to be. We're very sensitive to people's needs," McGinnis said. The city paid immensely for the property and also took responsibility for its relocating expenses.
Creating a large number of jobs in a small town is a public benefit and a compelling reason to use eminent domain, McGinnis said.
Nowling referred to the Poletown case of 1981, where the city condemned five square miles of land to build a new General Motors plant, which would extend across the borders of Detroit and Hamtramck. It was built in a path where about 1,500 homes, businesses, churches and a hospital once stood. Families and company owners were forced to sell their property in the government's robust effort to keep the automotive industry in Detroit.
Many times, eminent domain actions occur and go unnoticed to the public, according to Nowling.
"The threat is so daunting to homeowners that they usually just sell," Nowling said. The likelihood to prevail against government action is small and many choose not to dispute the administration, he added.
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