Category: Eminent Domain

Saginaw Trail Pipeline Offers Are Made

Consumers is making offers at the Saginaw County end of the pipeline project that will traverse from Clawson to Zilwaukee. This pipeline will affect over 700 parcels.
The quality and nature of the appraisals will vary greatly. There are some properties that may not be substantially affected by a replacement pipeline. However, others will have new pipelines, each which will have a specific effect on the needs of each individual owner.
Some of the offers seem to be within the range of reasonableness. Others simply do not take into context that every property is unique, with the appraiser completely failing to understand the nature of individual properties.
Without question, there will be disputes on just compensation. At the same time, Consumers seems to be making a good faith effort to ascertain the value needed to determine just compensation for at least some of the properties while missing an accurate estimate of just compensation on others.

The project timing has been accelerated!





If the government wants your property, what should it pay for it?

At a time when the State of Michigan is planning or moving forward on several high-profile construction or public works projects, the issue of eminent domain is once again in the public eye.

Eminent domain, the right of the government to seize private property (with compensation) from businesses or individuals, is a topic that never fails to raise eyebrows and emotions. One of the biggest issues surrounding eminent domain – and one of the common points of conflict that arises when the state moves to seize private property – is determining what constitutes fair compensation.

If your home, business or property stands in the way of an important government project like the Gordie Howe International Bridge, what level of compensation are you legally entitled to? How is that compensation calculated, and what additional factors need to be considered?

What constitutes fair market value when conditions of sale are pegged to a specific time in which the market is skewed – when it’s in a downturn like 2009, for instance? On a long-term basis, this isn’t a problem for those who aren’t immediately interested in divesting themselves of property. If you could wait until the market went up, periodic market fluctuations would be less of a concern. The market during the 2009 recession raised the issue of if and when the market would ever return to the numbers of only a few years before.

In some respects, we’re dealing with valuation challenges today based on circumstances that are 180 degrees different than in 2009. The question now is whether the market in certain areas can remain so high. Consider the housing market has increased in value by over 40 percent in the last four years. At the same time, Detroit’s vacancy rate has diminished by 65 percent or more in the last two years.

On the surface, this might seem like a good thing for property owners subject to an eminent domain proceeding. A healthy market leads to higher prices, but that isn’t the whole story.

Businesses and individuals who own property being acquired for the Gordie Howe International Bridge or the Saginaw Trail Pipeline, for example, are facing a new challenge: there are few similar commercial buildings available for them to move into. Owners (particularly those who own industrial or manufacturing facilities) who could find properties similar enough to modify and move into only six or eight months ago, now have no comparable locations to move to, which maintain necessary cranes, ceiling heights or zoning. The market has dramatically changed, owners simply don’t know what to do.

As recently as 15 months ago, many sales were priced at about 50 percent of present value. Realistically, individuals are not rushing out to buy property right now, given the premium placed upon storage and industrial warehouse facilities. Yet owners generally have between seven months and two years to move in today’s market. Given these time constraints, a substantial problem arises: How do you deal with owners who have nowhere to move?

It’s important to remember that the legal definition of market value includes stipulations that value should be determined based on “what the property would be reasonably worth on the market for a cash price, allowing a reasonable time within which to effect a sale.” Additionally, it presumes a “…prudent seller, at liberty to fix the time and conditions of sale” and an owner who is “not obliged to sell,” and a buyer who is “not obliged to buy.”

In other words, “the reality of an expedited dispossession of a property owner caused by accelerated acquisition schedule will destroy the viability of fair market value because fair market value contemplates allowing a reasonable time within which to affect the sale.”

The standard valuation process recognizes that real estate transactions include a willing buyer and seller, in a balanced market where both sides have the time required to voluntarily transact business over a reasonable time. Today, those conditions do not exist.

When buyers are compelled to buy and sellers are compelled to sell, it skews the market and creates dysfunction. The government should give subjects of seizures as much notice as possible to buy a replacement property, and should compensate them accordingly.

Property owners who receive notice of a seizure should immediately seek professional advice from an attorney who specializes in eminent domain matters.

It might seem as if eminent domain issues aren’t relevant in other settings. However, we are no longer in a down market, and similar issues will face anyone who is compelled (by a death, medical expenses, or other financial hardship) to relocate a residence or business on short notice. The notion of compulsion can change the market in an unfavorable fashion for the existing owner.

To read more, visit Bridge Magazine.

Obtaining Land for Trump’s Border Wall a Daunting Task, Experts Say

Joe Palazzolo/The Wall Street Journal – President Donald Trump wants to hire 20 lawyers to work on obtaining the land needed to build a wall along the Southwest border. He may need more.

The project will require a staggering amount of paperwork and research, eminent domain lawyers said. Moreover, uncooperative landowners could make the job difficult for government attorneys, slowing the president’s signature project, they said.

Mr. Trump’s 2018 budget request to Congress asks for the 20 additional Justice Department attorneys to “pursue federal efforts to obtain land and holdings necessary to secure the Southwest border.”

About 67% of the 2,000 miles of the U.S. border with Mexico represent private or state-owned land, most of it in Texas, according to the Government Accountability Office.

The federal government may take private land for public uses, but the Fifth Amendment to the Constitution mandates that property owners receive “just compensation.” Eminent domain lawyers said the government would have little trouble demonstrating public use in this case, but that is only one step in a process that can take years.

“Governments using eminent domain consistently underestimate how difficult it is to condemn property,” said Robert McNamara, senior attorney at the Institute for Justice, a libertarian group that represents property owners in eminent-domain cases.

Usually, the government negotiates with property owners before filing a case for their land. It could take months or even years for the Trump administration to bargain individually with the hundreds of private landowners along the border. Government lawyers sometimes must go to court just to gain access to property for appraisals, said Mr. McNamara.

The border fence authorized by Congress a decade ago was delayed because of problems acquiring land, the inspector general of the Department of Homeland Security said in a 2009 report. One landowner in New Mexico refused to give up his property, leaving a 1.2 mile gap in the fence for a time, though the agency later acquired the land through a settlement, the report said.

Customs and Border Protection set a goal of erecting 90% to 95% of the 670 miles of planned fencing by the end of 2008, according to the inspector general report. But the agency completed only half by then, attributing the delay to opposition from land owners.

Then-President Barack Obama pronounced the fence basically complete in 2011, though Republicans said that more double-fencing was needed. All told, the government sought 45 linear miles of land, using court orders and negotiations to acquire more than 480 properties from their owners. The government had to condemn hundreds more properties whose ownership couldn’t be established.

“Acquiring real property from non-federal owners is a costly, time-consuming process,” the report said.

When the government files an action in court seeking private property for public uses, it must notify anyone with an interest in the land, including banks or others with a lien against the property as well as easement holders. The Trump administration will have to identify and serve thousands of people with legal notices and enlist experts to estimate the value of each parcel, said Alan Ackerman, an eminent-domain lawyer in Michigan who represents landowners.

“It’s gonna take a force to get this done for all the paperwork they’ve got to file,” he said.

Property owners can file their own appraisals if they disagree with the government’s estimate, but they have to pay their own legal and expert fees. In such situations they often band together to oppose the government’s plans and to pool the fees. Property owners along the border who resist could find allies in their state governments.

Democratic state lawmakers in New Mexico have proposed legislation that would bar the federal government from acquiring land to build the border wall. In California, Lt. Gov. Gavin Newsom, also a Democrat, has discussed using state and federal environmental laws to fight the wall’s construction in his state.

Mr. Ackerman, managing partner of Ackerman Ackerman & Dynkowski PC in Bloomfield Hills, Mich., predicted that the U.S. government would file mass cases that each include hundreds of properties to be condemned. Federal judges in the past have appointed commissioners to oversee disputes over compensation for land, another likelihood in a project of the size, he said.

Courts can approve the transfer of land to the government even as the parties fight over compensation, but it could take years for the administration to gather all the land, said Mr. McNamara.

“Eminent domain is incredibly difficult,” he said.

Businesses in bridge’s path seek better deal

Chad Livengood/Crain’s Detroit Business – On a narrow and mostly deserted street in southwest Detroit’s Delray neighborhood, Gordy Ebsch has run a small machine shop since 1999, tailoring his services to nearby heavy industrial clients.

But the 20,000-square-foot building on South Post Street that houses Ebsch’s Delray Mechanical Corp. sits at the base of where the new Gordie Howe International Bridge is supposed to land in Michigan.

That puts Ebsch’s business in the crosshairs of the Michigan Department of Transportation, which is in the midst of a massive undertaking to buy up 634 parcels of residential and commercial land for the bridge, a plaza and connection to I-75.

For Ebsch, MDOT’s purchase offer for his building is not matching the cost of relocating his welding fabrication and custom machining business to another suitable production space in southwest Detroit near his clients in the cement, asphalt, aggregate, steel and railroad industries.

“It’s very difficult in Detroit to find property that matches what I have,” said Ebsch, who has operated his business in southwest Detroit since 1988. “There’s such a big gap here. I don’t know how it’s going to get solved.”

More likely than not, the gap between MDOT’s market-rate offer and the cost of Ebsch to uproot his small business will be decided by a Wayne County Circuit Court judge.

“We’re going to litigate that for the rest of our lives when they finally file it,” said Alan Ackerman, an eminent domain attorney who is representing Delray Mechanical and several other businesses in the pathway of the bridge.

MDOT’s land acquisition for the bridge — estimated to cost upward of $370 million — faces a big and final hurdle with the remaining viable businesses in Delray, a blight-ridden and isolated neighborhood that has been waiting for the bridge to come for more than a decade.

Ackerman declined to specify MDOT’s offer for Delray Mechanical but said it was less than $20 per square foot and Ebsch needs at least $75 per square foot to build new or rehab existing industrial space in Detroit.

Delray Mechanical Corp. sits at the base of where the proposed Gordie Howe International Bridge is supposed to land in Michigan.

“Their offer is a fraction of what they’re going to need to move anywhere,” Ackerman said. “And a fraction with a high denominator.”

Andrew Doctoroff, who is Gov. Rick Snyder’s top adviser for the bridge project, said the state is “very sensitive” to the impact the project is having on existing businesses in Delray.

“The governor for a whole host of reasons is very committed to making sure that the community is treated equitably and any adverse impacts are limited and fully mitigated,” he said.

As of last week, MDOT had purchased or taken control of 394 of the 634 parcels, 62 percent of the land needed for the project, said Matt DeLong, administrator of MDOT’s development services division.

MDOT has commenced condemnation proceedings against the owners of 30 commercial or industrial parcels and plans to file 30 more lawsuits within the next two weeks if property owners don’t accept the department’s purchase offers, DeLong said.

Condemnation is MDOT’s last resort to acquire land needed for a $4.5 billion bridge project that President Donald Trump and Canadian Prime Minister Justin Trudeau recently hailed as a “vital economic link between our two countries.”

“We think it’s very important for folks to appreciate that condemnation is a healthy part of the process, even though people think it’s adversarial,” Doctoroff said.

Inside the footprint of the bridge and customs and toll plaza, there are eight businesses of varying size still operating as most residents have relocated and MDOT’s contractors speed up housing demolitions this spring.

The most prominent business is a 42-acre Central Transport trucking terminal on Jefferson owned by Ambassador Bridge owner Manuel “Matty” Moroun, who has fought construction of a new publicly owned Detroit River crossing for more than a decade.

Up to one-third of Moroun’s 300-bay distribution center and a fueling station will likely have to be torn down to make way for the bridge landing and space for construction operations.

Moroun owns 21 mostly vacant parcels of land within the project’s boundaries, and the billionaire trucking mogul is using those properties to mount a multifaceted legal challenge to construction of the bridge.

Beyond biz

Businesses in Delray aren’t the only property owners butting heads with MDOT in court over the cost of relocating in Detroit.

Last October, MDOT used condemnation to take First Latin American Baptist Church at 6205 W. Fort St. after the church rejected the department’s $411,000 purchase offer, disagreeing with the appraisal.

The congregation is in the process of moving into a smaller church building at 2004 Scotten Ave. that has less classroom space and doesn’t have a gym like the Fort Street church, Pastor Kevin Casillas said.

“We’re not going to have what we currently have, facility-wise and capacity-wise,” Casillas said. “We don’t feel we’re being made whole.”

Ackerman, who also is representing the church, said that case will go to trial later this year.

Down the street from the 110-year-old church, the Detroit Friends Meeting are now going through a condemnation proceeding with MDOT over their building at 6227 W. Fort St. after the state offered the group of Quakers $105,000 for their property.

“For us to move someplace comparable is going to cost more money than what they’re offering,” said Peter Dale of Livonia, the 22-member Quaker congregation’s recording clerk.

The Detroit Friends Meeting building and Baptist church on Fort Street lie in the path of flyover bridges that will connect I-75 to the Gordie Howe plaza and Detroit River bridge.

Dale said the small group of Quakers was ready to move a decade ago when state officials first approached it about needing its land for the infrastructure project.

The Quakers had visions of moving into a space on John R Street, Cass Avenue or even Woodward Avenue — years before Midtown’s development boom sent real estate prices soaring.

“With all of this delay, our location has now become totally unaffordable,” Dale said. “We’re not trying to hold up the state — we just want to get something that’s functional now. But things are just expensive now.”

Changing costs

The $370 million in land acquisition costs in Delray is a moving target, MDOT officials say, and could change depending on the outcome of buying up the remaining property.

MDOT officials declined to comment on specific parcels that are clearly in the path of publicly disclosed plans for the bridge, which the Canadian government has pledged to finance through a public-private partnership.

State officials also would not address questions about whether land from the LaFarge North America cement plant and McCoig Concrete mixing plant on the Detroit River would be sought for the bridge. Design plans show the bridge passing over the air space of both properties en route to Moroun’s trucking terminal property along Jefferson Avenue.

Ackerman is representing most of the businesses located inside a 2-square-mile area where the bridge’s customs plaza and toll lanes will be located.

His clients include Peerless Metal Powders Inc. on South Military Street; Edward W. Duffy Co., a mechanical tubing and piping supplier on West Jefferson Avenue; Rye Gentry Trucking Inc. on Jefferson; and John Johnson Co., an automotive and industrial textiles manufacturer on Waterman Street.

The other owners declined to comment, said Ackerman, who is managing partner of Ackerman Ackerman & Dynkowski PC in Bloomfield Hills.

Ackerman also is representing Fort Iron & Metal, which operates a sprawling indoor scrap metal and salt storage facility between South Livernois and South Crawford streets.

That facility has 60-foot ceilings to accommodate raw materials storage, Ackerman said, making it difficult for the owner to find a comparable move-in-ready facility in Detroit.

“The offers that are coming are inhibiting the ability to move,” Ackerman said. “These people want to be in business.”

Under state law, MDOT’s purchase offers to commercial and industrial property owners are based on comparable sales. The department also reimburses business owners for reasonable and necessary moving expenses and pays up to $25,000 for a company to re-establish its operations elsewhere.

“If your property is worth $500,000 … in Delray, that’s how much you’re going to get paid,” DeLong said. “If it costs you $700,000 to buy a property somewhere else, we’re still only going to pay you $500,000.”

“That’s what the statute says and we follow the statute,” DeLong added.

Ackerman is not working for Moroun, who has hired former Attorney General Mike Cox to wage his legal battles.

Because of Moroun’s litigation fighting condemnation of his trucking terminal and 21 other parcels within the bridge footprint, MDOT officials are guarded about specific acquisitions, declining to discuss why certain business properties have received purchase offers and others have not.

Ackerman’s practice has focused solely on condemnation since 1973. He has been involved in some of the state’s largest eminent domain cases, including General Motors’ leveling of the Poletown neighborhood for construction of the Detroit-Hamtramck plant in the early 1980s.

In Delray, Ackerman said MDOT’s purchasing strategy is “more cold, calculating” than he’s ever seen before.

“If they want to protect people and make them whole, it can be done,” Ackerman said. “I don’t get a sense right now that they give a hoot. I’m hoping I’m wrong.”

Natural gas pipeline construction will compensate property owners

ABC 12, WJRT – Earlier this week, we told you about plans by Consumers Energy to build a new natural gas pipeline from Zilwaukee to Oakland County. Before they do that, they’re going to have to compensate 650 property owners where the pipes will be installed.

It’s called eminent domain. When authorized by the Michigan Public Service Commission, Consumers Energy will be able to dig the path for the pipeline across private property – but not before paying the land owners.

The work will start this summer in Saginaw County. Consumers will be replacing about 78 miles of pipe and rerouting 16 miles of pipeline on a new path, which has not been finalized.

“Consumers Energy representatives are talking to potentially affected customers at the time and we expect those final decisions to be made in a couple of weeks,” said Kevin Keane, of Consumers Energy.

An attorney with 45 years of experience in eminent domain issues says property owners need to be aware of their rights before signing any agreements.

“Before Consumers Energy meets with an owner about how much they will get paid, Consumers will have to prepare an appraisal on what’s being taken and make an offer not less than that appraisal value,” said Alan Ackerman.

The pipeline will cut a 60 foot wide swath along the new route and Consumers Energy will own that easement. Property owners will have a lot to think about when receiving the appraisal.

“Then each owner can choose whether to hire a lawyer at that time or can hire one earlier, but there’s a limit to what Consumers can do. They have to give people fair value,” Ackerman said.

For those who own property where the old pipeline will be dug up, depending on what the deed says, they may not get much compensation.

“The agreement for the people who already have the pipeline in place may very well say they get paid a dollar a foot,” Ackerman said.

Consumers Energy says the bigger pipeline is needed to meet natural gas demands of the future.

To see the full video, visit ABC 12.

Proposed pipeline involves 650 landowners in Saginaw, Genesee, Oakland counties

Heather Jordan/MLive – Consumers Energy Co. is seeking approval to construct and operate a $636 million 24-inch natural gas pipeline that would span 94 miles and involve hundreds of landowners in Saginaw, Genesee and Oakland counties.

The proposed Saginaw Trail Pipeline would replace approximately 78 miles of 12- and 16-inch gas transmission pipeline that company officials say is nearing the end of its operational life.

Consumers Energy officials in September requested that the Michigan Public Service Commission approve the project. Should the Commission approve it, project permits will also be required from the Michigan Department of Environmental Quality, Michigan Department of Transportation and those required by local municipalities.

According to Consumers Energy’s application, the proposed pipeline would replace the existing Line 2800 Pipeline between the company’s Zilwaukee Junction in Saginaw County’s Tittabawassee Township and its Clawson Control Station in Oakland County’s Milford Township.

Company officials say the proposed pipeline and related facilities “are necessary for the safe and efficient conduct of the company’s public utility business and will serve the public interest.”

Read the filing here.

Company officials aim to begin construction of the proposed Saginaw Trail Pipeline this summer and to conclude construction by 2021. Construction would happen in five phases, beginning at Consumers Energy’s valve site in Saginaw County south of Evon Road and continue south to a natural gas city gate facility near Vienna Road in Genesee County, according to Consumers Energy spokeswoman Debra Dodd. About 20 miles of pipeline would be replaced and three existing city gate facilities would be rebuilt.

A city gate is equipment strategically located along pipelines designed to lower the pressure of gas so it can be safely delivered to homes and businesses, Dodd said.

The proposed pipeline would largely be located on the existing pipeline rights-of-way. However, Consumers Energy plans to reroute the proposed pipeline around the urban areas west of Saginaw and east of Flint, according to the filing.

“Consumers Energy is committed to ensuring pipeline integrity and the ability to continue providing safe and reliable natural gas delivery to customers,” a statement provided by Dodd reads.

“As part of this commitment we will replace approximately 78 miles of 12- and 16-inch gas transmission pipeline that is reaching the end of its operational life with a new 24-inch pipeline (called the Saginaw Trail Pipeline project). Including re-routes around urban areas, the new 24-inch pipeline will be 94 miles in length.”

The statement continues, “In some areas the pipeline is being rerouted to avoid proximity to residential backyards and areas of environmental sensitivity, and in other areas it will follow the existing route. When the pipeline was originally built in 1942 much of the current developed land was primarily agricultural.

“Wherever possible Consumers Energy is following its utility easements, and then has tried to determine the route of least impact on customers and the environment.”

Company officials say an environmental assessment for the proposed pipeline concluded construction of the pipeline would “have no significant adverse impact on the environment.”

In addition, company officials say they will “work with all applicable federal, state and local agencies to ensure any environmental concerns are taken into consideration. An onsite environmental monitor will be present throughout construction.”

Judy Palnau, media and public information specialist with the Michigan Agency for Energy/Michigan Public Service Commission said Consumers Energy filed its application with the Michigan Public Service Commission seeking a Certificate of Public Convenience and Necessity to construct and operate the Saginaw Trail Pipeline on Sept. 2.

The proceeding is being held before an administrative law judge and the target date for the judge’s decision is May 10. After that, the MPSC commissioners will issue an order on the utility’s request, Palnau said.

Those interested in this proposed project may email comments to the MPSC, she said. Comments should reference Case No. U-18166 and be emailed to

All information submitted to the Commission will become public information available on the Commission’s website and subject to disclosure.

Consumers Energy officials say they have been proactively communicating with landowners, local government and related organizations and safety officials along the pipeline route. Construction would involve about 650 landowners in Saginaw, Genesee and Oakland counties, according to Dodd.

Alan Ackerman, managing partner of Ackerman Ackerman & Dynkowski P.C., says he wants to make sure affected property owners are compensated fairly. He is representing two of them. A lawsuit has not been filed.

“They’re going to have their properties ripped up. They may or may not be compensated according to what the original easement says,” Ackerman explained.

Ackerman said some of the affected property owners do not currently have pipeline on their property and adding it could have a negative affect on their property values.

“The pipeline company has some pretty good justification for doing this. They really need to get gas to market,” Ackerman said. “But when people lose their property they should be treated fairly.”

He added, “Property is a great privilege in America as well as a right.”