Urban Renewal and the Public Use Requirement

The takings issue has received much attention since the famous (or infamous) Kelo v. City of New London[1] decision. This blog post is intended to highlight the complexity behind a simple requirement, that the state appropriate land for a “public use.” What constitutes a “public use” is clear at the extremes, but can otherwise become quite confusing. Michigan is used as a template for the state law analysis portion of this post because of the expansive application that eminent domain doctrine will likely see in Detroit in light of large-scale renewal efforts.[2] Such urban renewal projects have been proposed both by wealthy individuals[3] and non-profit organizations.[4]

In a narrow sense, a public use can be understood as something that is literally used by the public, like railroads or dams, or more broadly as something that produces a public benefit, like blight remediation.[5] At one extreme, you have cases where private property is condemned for a rather obvious public use, like highways or post offices. Highways and post offices are open to everyone and are used extensively by the general public; taking land for such purposes satisfies the public use requirement.[6] At the other extreme, if the government condemns property “solely for the purpose of transferring it from one landowner to another, to be put to whatever use the second landowner wishes,” that transfer would not satisfy the public use requirement.[7] The challenge lies in the gray areas between these two extremes.

The takings issue is often encountered in the urban revitalization context where large tracts of land are needed for a particular project. Such projects may include renovating brownfields[8] or eradicating blight.[9] These endeavors have a nationwide significance, but in Michigan, and in Detroit especially, the issue pulls on a very delicate chord. As are brownfields, blight is common in Detroit, and the risk that blighted structures pose for the community are very real.[10] Blight has “[affected] crime, emergency resources, and property values.”[11] Many observes note that public-private partnerships are the solution because the government, with its strained resources, has not been able to tackle the issue efficiently on its own.[12]

The Public-Private contracting paradigm has gained traction, recently. For example, in early 2013, 616 First Street Partners, LLC was commissioned to renovate 70,000 square feet of industrial building in Grand Rapids, MI, as part of a project to address the brownfield issue.[13] In another case, Detroit’s Mayor, Dave Bing, partnered with a nonprofit group, Detroit Blight Authority, to tackle blight in the Eastern Market area.[14] These public-private partnerships seem to be the way forward; however, often times, there are individual property owners who are not willing to give up their land at any cost. [15]

As a result, the municipality is faced with the decision of abandoning the project or exercising eminent domain to secure the land. Often, in the context of urban revitalization projects, the city itself is not the party implementing the project but the private party in the partnership, like the “Baltimore Development Corporation.”[16] The private entity is thus receiving the land that the city “took” from another private party. Sometimes that “taken” land is held privately. Sometimes that land is held in a partnership entailing both public and private ownership elements. And sometimes the land is returned to the public arena. Can all of these situations fall within the “public use” exception?

The Supreme Court case, Kelo v. City of New London, examined this issue and determined in a 5-4 decision that, under certain circumstances, a taking and “giving” from one private party to another, can satisfy the public use exception. The Kelo Court gave an expansive interpretation to the public use exception and also gave a great deal of deference to the agency or municipality in determining the level of necessity behind the taking.[17]

State courts, like Michigan’s, have not been so deferential. It has been observed that, in comparison to federal courts, state courts are “generally . . . more willing to strike down attempts to use eminent domain for economic development based on the public use clauses of [their] relevant state constitutions.”[18] In Michigan, that court was the state Supreme Court in County of Wayne v. Hathcock.[19]

Before the Kelo decision, the Michigan Supreme court indicated that condemning private property and transferring it to other private parties must meet certain criteria beyond what the Kelo decision entailed. In County of Wayne v. Hathcock, the Court required Michigan’s constitutional ‘public use’ criteria, laid out below, to be satisfied before permitting the taking.[20] The Michigan Supreme Court’s decision in County of Wayne v. Hathcock is of great importance for two related reasons. First, because it interprets Michigan’s State Constitutional “public use” requirement.

The County of Wayne v. Hathcock Court read the Michigan State Constitution, Mich. Const. art. X, § 2, as requiring that an urban revitalization taking possess one of these three qualities –

(1)  The private land condemned and transferred to a private entity must entail a “public necessity of the extreme sort otherwise impracticable.” For example – Highways, railroads, canals and other instrumentalities of commerce.

(2)  The private entity must remain accountable to the public in its use of that property (i.e., elements of public oversight are needed).

(3)  The condemned land may be transferred to private entity when the selection of the land to be condemned is itself based on public concern. For example, the selection and condemning of the land is itself for the public’s own good (e.g., clearing slums for health reasons).[21]

The County of Wayne v. Hathcock court’s interpretation of Michigan State Constitution, Mich. Const. art. X, § 2 is also of great importance for a second reason. In 2006 a ballot proposal[22] was enacted into law as an Amendment to Article X, which effectively “[froze] the Michigan Constitution’s definition of ‘public use’ to how it was understood in 2006.”[23] Justice Young’s iteration of the Court’s understanding of art. X, § 2 in County of Wayne v. Hathcock is the clearest indication of how the term “public use” was understood at the time.[24]

The Kelo decision can be viewed as a larger framework into which a taking for public use must fall; Michigan’s state law is narrower, and limits the extent to which the public use doctrine can reach.[25] Therefore, in order to successfully “take” property for an urban revitalization project in Michigan, the “takers” are well advised not only satisfy the looser requirements set forth in Kelo, but also to satisfy one of Justice Young’s three criteria in County of Wayne v. Hathcock. Otherwise, the transaction will not comport with state law, and it will be invalid.

It is clear that a proposed urban revitalization project must satisfy Kelo – it must be for a “public use.” Michigan Statutory provision, MCL 213.23, reflect this concept. Per the Michigan State Constitution, this “public use” must involve certain levels of either direct generation of a public benefit, public control over the project, or the taking must itself be necessary for a public benefit, like eradication of brownfields for health purposes.[26]

It is possible that projects in Detroit, and Michigan, aimed at eradicating blight fall under County of Wayne v. Hathcock’s category #3, the land itself being a public concern. Indeed, if firefighters, other rescue personnel, and members of the general public are at risk of serious injury or death due to crumbling buildings,[27] then projects aimed at eliminating that risk are directly related to the publics own good. Similarly, if safety or health risks are posed by brownfields, County of Wayne v. Hathcock’s category #3 should apply as well to vindicate a taking for ‘public use.’

However, to be safe, the public-private urban revitalization project should also implement elements of public oversight to comport with County of Wayne v. Hathcock’s category #2. As I conclude below, such oversight is highly beneficial to the developer, regardless of Michigan’s state laws. The Urban Land Institute points out in its Stockton Report that “setting objectives that can be seen and measured by the development community and the general public, and creating a corporate culture that is aligned, responsive, and customer-driven” is a key component to the success of urban renewal projects, generally.[28] More specifically, it is in the private entity’s benefit to encourage public oversight and participation.  This way they can ensure that they are delivering a desired end product, one that other consumers will demand in the future. At the end of the day, the private entity is seeking to generate profits, and more business down the road means more profit.

-Kamal Al-Salihi is an Articles Editor on MJEAL.  He can be reached at kamalda@umich.edu.


The views and opinions expressed in this blog are those of the authors only and do not reflect the official policy or position of the Michigan Journal of Environmental and Administrative Law or the University of Michigan.

[1] Kelo v. City of New London, Conn, et al., 545 U.S. 469 (2005).

[2] Moses Harris, Graphic: Strategic renewal in the 21st century, Detroit Free Press (Feb. 9, 2013), http://www.freep.com/article/20130210/NEWS01/130210001/Graphic-Strategic-renewal-in-the-21st-century?odyssey=obinsite.

[3] Angela Guss, Detroit: “Farm City”, Health Wire (Nov. 22, 2010), http://health.wealthwire.com/news/food/183.

[4] Susan Saulny, Razing the City to Save the City, New York Times (June 20, 2010), http://www.nytimes.com/2010/06/21/us/21detroit.html?pagewanted=all.

[5] Lynda J. Oswald, The Role of Deference in Judicial Review of Public Use Determinations, 39 B.C. Envtl. Aff. L. Rev. 243, 251 (2012).

[6] James E. Krier & Christopher Serkin, Public Ruses, 2004 Mich. St. L. Rev. 859, 861 (2004).

[7] Lynn E. Blais, Urban Revitalization in the Post-Kelo Era, 34 Fordham Urb. L.J. 657, 662 (2007); Kelo v. City of New London, Conn, et al., 545 U.S. 469, 480 (2005).

[8] (abandoned or underused industrial facilities)

[9] Kaitlyn L. Piper, New York’s Fight over Blight: The Role of Economic Underutilization in Kaur, 37 Fordham Urb. L.J. 1149, 1150 (2010).

[10] Shaun Byron, Old GM properties are a tough sell in Genesee County, but not impossible, MLive (Mar. 3, 2013, 7:00AM), http://www.mlive.com/business/mid-michigan/index.ssf/2013/03/gm_properties.html (describing how blighted buildings pose a serious risk of injury or death when they crumble on rescue personnel.)

[11] Henry Payne, The One Percent solution to Detroit blight, Detroit News (Mar. 7, 2013), http://blogs.detroitnews.com/politics/2013/03/07/the-one-percent-solution-to-detroit-blight/

[12] Henry Payne, The One Percent solution to Detroit blight, Detroit News (Mar. 7, 2013), http://blogs.detroitnews.com/politics/2013/03/07/the-one-percent-solution-to-detroit-blight/ (noting how public-private contracting is the way to go in Detroit’s battle against blight); Shaun Byron, Old GM properties are a tough sell in Genesee County, but not impossible, MLive (Mar. 3, 2013, 7:00AM), http://www.mlive.com/business/mid-michigan/index.ssf/2013/03/gm_properties.html (noting how public-private contracting is increasingly necessary in Detroit’s battle against brownfields.)

[13] Matt Roush, Business Expansions, Community Projects, Entrepreneur Program Get State Support, CBSDetroit (Feb. 27, 2013), (http://detroit.cbslocal.com/2013/02/27/business-expansions-community-projects-entrepreneur-program-get-state-support/).

[14] David Runk, In Detroit, a nonprofit fights urban blight, The Christian Science Monitor (Feb. 19, 2013), http://www.csmonitor.com/World/Making-a-difference/Change-Agent/2013/0219/In-Detroit-a-nonprofit-fights-urban-blight

[15] See, JC Reindi, Detroit planners try a softer approach to urban renewal, Detrot Free Press (Feb. 10, 2013), http://www.freep.com/article/20130210/NEWS01/302100118/Detroit-planners-try-a-softer-approach-to-urban-renewal (describing how some property owners in Detroit value their right to their property sufficiently more than they do an objectively reasonable buyout amount, making it difficult for centralized coordination efforts of urban renewal projects).

[16] Baltimore Development Corporation, http://www.baltimoredevelopment.com/urban-renewal-plans (last visited Mar. 11, 2013).

[17] Kelo v. City of New London, Conn, et al., 545 U.S. 469 (2005).

[18] Lynn E. Blais, Urban Revitalization in the Post-Kelo Era, 34 Fordham Urb. L.J. 657, 666 (2007) (describing how Thomas Merrill’s mid 1980s survey, in Thomas W. Merrill, The Economics of Public Use, 72 Cornell L. Rev. 61, 109 (1986), revealed how state court’s are scrutinizing public use claims ‘increasingly closely.’)

[19] County of Wayne v. Hathcock, 684 N.W.2d 765 (Mich. 2004) (overruling the Poletown decision, which applied an extremely expansive understanding to the term “public use”; see Poletown Neighborhood Council v. City of Detroit, 304 N.W.2d 455, 458 (Mich. 1981) overruled by County of Wayne v. Hathcock, 684 N.W.2d 765 (Mich. 2004).

[20] County of Wayne v. Hathcock, 684 N.W.2d 765, 769 (Mich. 2004).

[21] See In re Slum Clearance In City of Detroit, 50 N.W.2d 340 (Mich. 1951).

[22] Mitchell Bean, Ballot Proposal #4 of 2006, House Fiscal Agency (10-20-2006), http://house.michigan.gov/hfa/PDFs/Ballot%20Prop4_2006.pdf.

[23] Peter J. Domas, Eminent Domain: Detroit’s Struggle to Downsize, 89 U. Det. Mercy L. Rev. 61, 66 (2011).

[24] Peter J. Domas, Eminent Domain: Detroit’s Struggle to Downsize, 89 U. Det. Mercy L. Rev. 61, 66 (2011).

[25] See David Schultz, What’s Yours Can Be Mine: Are There Any Private Takings After Kelo v. City of New London?, 24 UCLA J. Envtl. L. & Pol’y 195, 224, 232 (2006) (describing how some state courts reacted to the Kelo decision, interpreting their constitutions more narrowly so as to limit Kelo’s application to property within their states.)

[26] County of Wayne v. Hathcock, 684 N.W.2d 765, 769 (2004).

[27] Shaun Byron, Old GM properties are a tough sell in Genesee County, but not impossible, MLive (Mar. 3, 2013, 7:00AM), http://www.mlive.com/business/mid-michigan/index.ssf/2013/03/gm_properties.html.

[28] A ULI Advisory Services Panel Report, Stockton California (Feb. 5-10, 2012), http://www.uli.org/wp-content/uploads/ULI-Documents/ULI_Stockton_Report.pdf.