Chicago's Azzar

[arcturus]

'The Sad Saga of Chicago's Old Post Office Redevelopment'

Chicago invoked eminent domain.  Your turn next Grand Rapids.

http://chicago.curbed.com/2016/2/23/11099924/the-sad-saga-of-chicagos-old-post-office-redevelopment

[whitemice]

Huh?

[ctpgr34]

1 hour ago, whitemice said:

Huh?

56 N Division, Keeler Building

[RegalTDP]

I think a more apt comparison is "Chicago's Duane Faust."  Except they actually fell for it.

[discgrab21]

Eminent domain is tough in Michigan after the constitutional amendment about 10 years ago.  The property can't be taken to transfer it to another private party for development; there is a heightened burden of proof when the taking is for blight elimination; and the payment must be 125% of FMV.

[arcturus]

4 hours ago, discgrab21 said:

Eminent domain is tough in Michigan after the constitutional amendment about 10 years ago.  The property can't be taken to transfer it to another private party for development; there is a heightened burden of proof when the taking is for blight elimination; and the payment must be 125% of FMV.

From the article:  ' Bill Davies found himself receiving a crash course in Chicago-style politics when it was announced last weekend that the city would buy back the Post Office through invoking eminent domain. '

I'm no expert on eminent domain but it's hard to believe Michigan's laws can be any tougher than Illinois.  That said, the city of Chicago clearly has authority.  What's unclear is the role of the state, whether MI or IL.  Is this authority granted by the state?  Or are cities like Chicago or Grand Rapids free to do this autonomously, without state authority?

Keeler is a public hazard, eyesore, embarrassment, and arguably more neglected than the Post Office.  Why neuter a law which effectively gives owners carte blanche to continue neglecting their property?  Of any building begging for a ED invocation Keeler is certainly the one to cure its erection dysfunction.

[discgrab21]

Michigan's law is definitely more restrictive than Illinois.  In fact, Michigan's is one of the most strict in the country.   Illinois expressly provides for conditions for property to be taken (under certain circumstances) and immediately sold to private developers.  The Michigan Constitution expressly prohibits that practice.  Illinois also only requires the government to pay fair market value, whereas Michigan requires 125% of FMV as just compensation for the taking.  

In this case, the Eminent domain law likely emboldens Azzar.  He knows he is at very little risk of seizure.  What on earth would the city/state/county use for that building be that would justify 125% of FMV?  Maybe it could be converted to a parking garage...

[arcturus]

Are you an attorney and could you site the source of your information?

[ModSquad]

9 hours ago, arcturus said:

Are you an attorney and could you site the source of your information?

I am not an attorney but here you go.  I bolded and underlined the pertinent portions related to using eminent domain in response to a blighted property.

STATE CONSTITUTION (EXCERPT)
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.

[discgrab21]

I am an attorney.  Dave's post above does it for the Michigan law.  You could also google "Michigan Eminent Domain Amendment" and you can even see the ballot language from 2006 that was voted on to amend the constitution.

I got my information on Illinois law from the written materials from the Illinois Institute of Continuing Legal Education (IICLE) practice manual for eminent domain

http://www.lewisrice.com/content/uploads/2016/09/RJW_Eminent-Domain-Practice-2016.pdf

[x99]

The 125% thing is wrong.  Read it more carefully.  "If private property consisting of an individual's principal residence is taken for public use, the amount of compensation made ... shall be not less than 125%..."   While you cannot take a property for "economic development" or "enhancement of tax revenue", taking for the eradication of blight is not precluded.  So they could take the Keeler Building if they wanted to because it is arguably blighted due to the sidewalk non-repair.  However, fair market value would then have to be paid, which would be another lawsuit, plus there is already a lawsuit regarding whose responsibility the sidewalk/blight is.  

 

 

[discgrab21]

2 hours ago, x99 said:

The 125% thing is wrong.  Read it more carefully.  "If private property consisting of an individual's principal residence is taken for public use, the amount of compensation made ... shall be not less than 125%..."   While you cannot take a property for "economic development" or "enhancement of tax revenue", taking for the eradication of blight is not precluded.  So they could take the Keeler Building if they wanted to because it is arguably blighted due to the sidewalk non-repair.  However, fair market value would then have to be paid, which would be another lawsuit, plus there is already a lawsuit regarding whose responsibility the sidewalk/blight is.  

 

 

That is correct.  I didn't read the language closely (obviously) and just recalled from what I remembered of the '06 ballot initiative.  I also do not practice condemnation law, but it would be next to impossible it seems to take, and transfer to any private party. The city would have to prove, under a heightened burden, that the transfer to a private individual is not for economic development, because that is expressly not a public use.

Maybe the answer would be in a university buying it.   Maybe UofM could buy it to put metro offices in (i hear they are looking to invest billions in the area)?  In that sense, the City could act as a broker and force Azzar's hand.  But that would be a huge undertaking to come up with the money for the legal process and the purchase of the building itself.

[x99]

2 hours ago, discgrab21 said:

But that would be a huge undertaking to come up with the money for the legal process and the purchase of the building itself.

Exactly why it won't happen.  Besides that, there is no market for the Keeler building.  It has no parking and the city is very hostile to the idea of more parking.  The situation in Chicago is different.  I suspect it is also likely to wind up in protracted litigation if it happens.  The guy actually has plans on the table and plans to develop.  He is far and away from being "Chicago's Azzar".  His plans just aren't happening "fast enough" for the appetites of those in city hall.  At least in Kelo they were combining a bunch of parcel to create an "economic development" zone (which today is used as an $80 million trash dump).  Whether in Chicago or with Keeler, you're simply taking one parcel from one guy and handing it over to another guy.  That seems like a dumb idea destined to end in a lawsuit that will end badly unless the blight issues are legitimate.

[arcturus]

On 3/17/2017 at 6:38 AM, x99 said:

The 125% thing is wrong.  Read it more carefully.  "If private property consisting of an individual's principal residence is taken for public use, the amount of compensation made ... shall be not less than 125%..."  

That's why I asked for citation.  Couldn't find anything about 125% for anything other than principal residence.  

For sake of argument we'll call him Azzar Jr.  Here's to another 10 years of urban blight.

[Raildude's dad]

The 125% for a principal residence is also in the Federal Highway Administration regulations for purchasing property for a federal funded highway project. That may be where the idea came from for the constitution amendment.