Category: Real Estate

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.”

New pipeline to impact 961 acres of ag land

Jennifer Kiel/Michigan Farmer – Consumers Energy is seeking to secure rights-of-way across all private property it needs to construct a natural gas pipeline from Flint to Saginaw.

The pipeline will upgrade to 24-inch-diameter pipe from 12- to 16-inch diameter. The project replaces portions of the existing Saginaw Trail Pipeline, originally built in 1942 on what was primarily agricultural land.

However, due to residential and commercial growth around Flint and Saginaw, 25.8 miles of the existing pipeline will be abandoned in place, and 41.9 miles of new pipeline will be installed around Flint and Saginaw, impacting 961 acres of agricultural land and involving 650 landowners in Saginaw, Genesee and Oakland counties. The Saginaw Trail Pipeline, if approved as proposed, will span 94 miles.

Consumers Energy has been communicating with landowners, local government and related organizations, and safety officials along the pipeline route through several channels, including letters, postcards and face-to-face meetings.

The company filed an application and testimony Sept. 2 with the Michigan Public Service Commission, seeking a Certificate of Public Convenience and Necessity to construct and operate the proposed Saginaw Trail Pipeline.

According to Alan Ackerman, managing partner of Michigan-based Ackerman Ackerman & Dynkowski, more than 3,000 notices were sent out to government entities, businesses, landowners and those within 500 feet of the proposed pipeline. Ackerman specializes in representing landowners in eminent domain issues and has been an adjunct professor teaching eminent domain law at the University of Detroit Law School since 1983. He now serves as an adjunct professor at Michigan State University College of Law.

“This pipeline is most likely going through, as I don’t see anyone getting in their way on this,” he says. “Someone would have to prove that there is not a public need for it, but I don’t believe they would be very successful. The Attorney General’s Office can object, but I believe that is unlikely.”

An environmental assessment for the proposed pipeline concluded that construction would have no significant adverse impact on the environment.

5-year project
Consumer Energy plans to begin construction of the Saginaw Trail Pipeline this summer if the proposal is approved and finished in five years.

According to Consumer Energy, the current natural gas landscape favors growth in its demand. The company believes increasing the diameter of the pipeline to 24 inches is in the best interest of customers, because the current transmission system is approaching its pressure and capacity limits under design peak day conditions. The pipeline is also reaching the end of its operational life.

Debra Dodd, Consumers Energy senior public information director, says the project is necessary to enhance reliability and safety for the company’s natural gas customers.

Michigan contractors for goods and services are being used whenever possible for the $636 million project. According to statement from Consumers Energy about agricultural land, open-trench construction will be used where possible and permitted. Boring of the new pipeline will be done under most roadways and where required for environmental reasons. In agricultural and farm fields, the pipeline will be buried at a depth of 4 feet.

Crop damage relief
Consumers Energy will pay 250% of crop damage (to cover four years) to affected landowners.

All farm tiles will be relocated on affected properties. Consumers Energy will repair tiles should damage occur.

Within Consumers Energy’s application it says, “In active croplands, pastures and hayfields, topsoil will be stripped to a typical depth of 12 inches over the entire construction right-of-way. Topsoil will be segregated from the subsoil excavated from the trench to ensure preservation of topsoil. Following pipeline installation, the subsoil will be returned to the ditch, and the topsoil then replaced in the area from where it was stripped to facilitate vegetation growth and crop production.”

Farm disruption, the company says, will be limited to the growing season during the year of construction. Farmland along the project route is expected to return to agricultural use after completion of construction. Agreements will be made with individual property owners of agricultural land to provide compensation for crop damages or losses.

Construction of the pipeline will typically require a 120-foot-wide construction corridor or construction right-of-way, according to the application.

Ackerman says there may be some long-term effects on soils. “It’s possible that many of these landowners don’t understand the extent of the notification they got. No one really wants to be bothered, and it’s not always a question of money. Farmers who are to be impacted should watch this project closely so they are not taken advantage of,” he advises. “Landowners will be compensated on a per foot basis for damage, but each case is individualized.”

Woodland impact
The assessment corridor crosses about 688 acres of woodland. Construction will require the removal of trees to prepare the construction workspace, which is limited to 75 feet.

Trees cleared within the temporary workspace areas will be allowed to regenerate following construction. However, Consumers Energy is required to maintain its pipeline easement to allow visual inspection of its pipeline and to facilitate pipeline repairs, if required. The new pipeline easement will permanently impact about 23.6 acres of woodland.

$134 million project
The project will cost about $134 million and will be completed in time for the winter heating season.

Construction will begin at a Consumers Energy 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.

GO WIDE: The pipeline will upgrade to 24-inch-diameter pipe from 12- to 16-inch diameter.

About 20 miles of pipeline will be replaced, as well as the rebuilding of three existing city gate facilities. City gates reduce the pressure of natural gas flow necessary to transport it through the pipeline system, so it can be safely delivered via smaller distribution lines to farms, homes and businesses.

A field office for this project is located in Thetford Township at the northwest corner of North Genesee and East Dodge roads on land owned by Consumers Energy. This will allow construction crews to easily make their way north or south to perform work on the pipeline.

A copy of Consumers Energy’s application may be reviewed on the commission’s website or at the office of Consumers Energy Company. For more information on how to participate in a case, contact the commission at 517-284-8090. Additional questions about the project can be directed to Consumers Energy at 844-502-9014.

MDOT sues to seize southwest Detroit church and make way for new bridge to Canada

WXYZ Detroit – A Detroit church says they’re being short changed by the state of Michigan and it looks like a court battle will be needed to figure it out. The state needs the church’s land in southwest Detroit to make way for the new Gordie Howe International Bridge to Canada.

This week, the state filed a lawsuit in their effort to claim the land of the First Latin American Baptist Church on Fort Street in Detroit’s Delray neighborhood.

It’s an iconic place of worship that’s been in the neighborhood for eight decades, but church leaders say they are not being offered enough money to relocate.

The lawsuit shows that the church was offered $411,000 by MDOT. That’s part of any effort to purchase a number of parcels for the bridge project – purchases that are estimated to cost about $370 million.

Under the state’s eminent domain law, a court can now decide how much is paid for the church.

To view the full video, visit WXYZ.

MDOT files to take church for Gordie Howe Bridge project

John Gallagher/The Detroit Free Press – The State of Michigan has filed what appears to be the first lawsuit against a large property owner in southwest Detroit’s Delray district to acquire land for the planned Gordie Howe International Bridge.

The so-called condemnation lawsuit filed this week revealed that the Michigan Department of Transportation offered $411,000 to buy the First Latin American Baptist Church at 6205 W. Fort St. in a “good faith offer” on July 25.

Alan Ackerman, a Bloomfield Hills attorney representing the church, said the offer was too low because the church needs at least $2 million to relocate to a new site nearby and improve it to the same condition as its current location.

Since the church refused the MDOT offer, the State of Michigan filed suit this week to take the property. Under the state’s eminent domain law, the amount to be paid will now be determined in court.

“MDOT is working with the church to provide ample time for relocation prior to the state taking possession of the property,” said MDOT spokesman Jeff Cranson in an e-mail. “MDOT will continue discussions with the church on acquisition issues in hopes of reaching agreement.”

The condemnation lawsuit marks the first of what is expected to potentially be a rash of such legal squabbles over how much MDOT must pay for land in Delray for the Gordie Howe Bridge and its approaches, a U.S. Customs and Border Protection inspection plaza, and connections to I-75.

State officials have said they need to purchase an estimated 673 parcels in Delray for the bridge project at a projected cost of about $370 million. Good faith offers have already been made to a majority of the property owners, many of whom own small residential parcels.

But one of the biggest battles may still lie ahead. The state needs to acquire some portion of a 42-acre trucking terminal at 7701 W. Jefferson that is owned by Ambassador Bridge owner Manuel (Matty) Moroun and his family. Moroun’s son, Matthew, said recently the company would fight any attempt by MDOT to take its property for the Gordie Howe Bridge that will compete with the family’s Ambassador Bridge.

The Gordie Howe International Bridge remains in planning stages. Canadian authorities in charge of the massive project estimate it will open to traffic in late 2020. But delays in moving forward may push that completion date out beyond that.